The Rise of Socialized Medicine

Justin Haskins Heartland Institute
Published March 30, 2016

Consumer Power Report #500

In August 2007, then-Sen. Barack Obama expressed his hope for the growth of socialized medicine in the United States. “[Health care] is a $2 trillion part of our economy, and it is my belief that it’s not just politically, but economically, it is better for us to start getting a system in place – a universal health care system signed into law by the end of my first term as president and build off that system to further to make it more rational … By the way, Canada did not start immediately with a single-payer system. They had a similar transition step.”

Despite claims to the contrary, the Affordable Care Act (ACA) is that “transition step” toward a single-payer socialized medical system in the United States. Based on available data, it appears medical socialism is now closer than ever.

In 1995, 41.6 million American adults and children were enrolled in Medicaid, and there were about 37.6 million people in Medicare. Together, Medicaid and Medicare beneficiaries represented about 29 percent of the total U.S. population.

Today, Medicaid enrollment, including enrollment in the Children’s Health Insurance Program (CHIP), is about 72 million, a 72 percent increase since 1995. The growth in the number of older Americans has led to a large increase in Medicare enrollment, which now stands at 55.5 million.

The total percentage of the U.S. population receiving all or nearly all of its medical coverage from the government through Medicaid, CHIP, and Medicare is now close to 40 percent. At current growth rates, figured conservatively, that figure should surpass the 50 percent mark by 2035. If the number of people not enrolled in Obamacare but who receive ACA subsidies to offset health insurance costs are counted – about 18 million are projected to fall into this category in 2017, according to the Congressional Budget Office – more than half the nation will likely rely on government for health care within the next decade.

The United States is clearly moving rapidly toward European-style socialism, and the costs are already beginning to pile up. Not only are health insurance premiums and wait times for primary care doctors on the rise, the 2016 federal deficit is expected to grow for the first time since 2009, coming in at around $544 billion, an increase of more than 20 percent from 2015.

How can a government steeped in debt continue to pay health care bills for a growing number of Americans? Socialism offers only three options: cut benefits, reduce quality of care, or both. Many doctors are now refusing to take on additional Medicaid patients because of low reimbursement rates. Obamacare’s $716 billion cut to Medicare payments, scheduled to occur from 2013 to 2022, is greatly reducing access for many seniors, as Alyene Senger, a research associate with The Heritage Foundation, reports in a new Issue Brief.

“Despite the constant political rhetoric that Medicare payment reductions affect only providers and not beneficiaries, funding cuts for Medicare services will directly affect those who depend on those services,” wrote Senger. “If Obamacare’s major reductions are implemented by Congress over the coming decade, seniors’ ability to access Medicare services will surely diminish. In fact, the Medicare Trustees project that the lower Medicare payment rates would cause 15 percent of hospitals, skilled nursing facilities, and home health agencies to become unprofitable by 2019, and this percentage would reach roughly 25 percent in 2030 and 40 percent by 2050.”

Obamacare continues to expand health insurance coverage, but it’s also driving health care providers and insurers out of the marketplace. If everyone is insured, but obtaining quality health care services becomes increasingly more difficult, what’s the point of expanding coverage at all? As more people enroll in Medicare, Medicaid, and CHIP, government agents and elected officials will be empowered and compelled to take even greater control of the health care marketplace – both to limit costs and to force health care providers to offer services at a loss.

The only way to save the U.S. medical system is to completely reverse course on Obamacare and enact in its place a variety of pro-liberty, free-market reforms. The Affordable Care Act should be repealed; federal Medicaid funds should be block-granted to the states so that each may formulate policies specifically designed for its own unique population; health insurance companies should be allowed to compete across state lines; direct primary care should be legalized and embraced; and tax-free health savings accounts should be made available to every American, with a guarantee the funds will remain secure and can be rolled over year-to-year.

It’s not too late to stop the rise of socialism in the U.S. health care system, but time is running out.

— Justin Haskins



Showdown in the Legislature.

Debate will begin Tuesday on a health care reform bill designed to access federal Medicaid funding to extend coverage to an estimated 97,000 Nebraskans, most of whom fit the definition of the working poor.

Proponents and opponents geared up Monday in advance of the legislative clash.

Nebraska Appleseed dispatched email messages urging its supporters to contact their state senators, arguing that the measure would “return $1.8 billion of our federal tax dollars back home over the next three years to grow Nebraska’s economy” while addressing unmet health care needs. …

Meanwhile, the Platte Institute for Economic Research argued that Medicaid expansion in other states has “resulted in reduced workforce participation,” creating a new federal entitlement program that takes resources away from vulnerable Medicaid recipients.

SOURCE: By Don Walton, Lincoln Star Journal


In the latest report to undercut President Obama’s “If you like your health care plan, you can keep it” promise, the Congressional Budget Office projects millions of workers will leave employer-sponsored health plans over the next decade because of ObamaCare.

Some will opt to go on Medicaid, but others will be kicked off their company plans by employers who decide not to offer coverage anymore, according to a new CBO report titled, “Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026.”

“As a result of the ACA, between 4 million and 9 million fewer people are projected to have employment-based coverage each year from 2017 through 2026 than would have had such coverage if the ACA had never been enacted,” the report, released Thursday, said.

Employers now cover some 155 million people, about 57 percent of those under 65. That’s expected to decline to 152 million people in 2019. Ten years from now, employers will be covering about 54 percent of those under 65.

CBO said part of the shrinkage is attributable to the health care law: some workers may qualify for Medicaid, which is virtually free to them, and certain employers may decide not to offer coverage because a government-subsidized alternative is available.

Larger employers would face fines if they take that route.

But the agency also noted that employer coverage had been declining due to rising medical costs well before the health care law was passed, and that the trend continues.



The cost of Obamacare is expected to rise as millions of low-income people unexpectedly enrolled in public health care coverage rather than private insurance, according to a new government report.

These runoff costs, detailed in a report released Thursday, over the next decade are projected to be $146 billion higher than expected for the publicly funded Medicaid program, in spite of the fact that 19 states refuse to participate in the program at this time. The numbers indicate that the federal government fell far short in estimating how many people would enroll in government coverage rather than tax-subsidized but private health insurance.

According to the report, Medicaid and Children’s Health Insurance Program enrollees will total 68 million people in 2016 – or 16 million more people than anticipated six years ago, when the law passed. In 2015, Medicaid enrollees increased by 3 million, and by 2026 an additional 6 million are expected to enroll.

The projections were conducted by the Congressional Budget Office, a nonpartisan agency that estimates the economic effect of a bill’s passage. They do not include spending on adults 65 and older, who are enrolled in the government’s Medicare program, and some of whom also receive Medicaid to help pay for nursing home costs and other needs.

The number of Medicaid enrollees are particularly remarkable because under Obamacare the expansion program was expected to be significantly larger. The health care law, formally known as the Affordable Care Act, made it mandatory for all states to expand Medicaid’s eligibility to people making less than $16,243 a year. Several governors contested the law, however, and in 2012 the Supreme Court ruled that states could decide whether they wanted to participate in the program.

So far, 31 states and the District of Columbia have enacted the expansion, but even so the number of Medicaid enrollees is higher than budget analysts predicted in 2010, before they knew the provision would be changed by the Supreme Court.

SOURCE: By Kimberly Leonard, U.S. News & World Report


The web portal used by millions of consumers to get health insurance under President Barack Obama’s law has logged more than 300 cybersecurity incidents and remains vulnerable to hackers, nonpartisan congressional investigators said Wednesday.

The Government Accountability Office said none of the 316 security incidents appeared to have led to the release of sensitive data on, such as names, birth dates, addresses, Social Security numbers, financial information, or other personal information.

Most of the incidents over nearly 18 months seemed to have involved electronic probing by hackers. offers subsidized private health insurance for people who don’t have access to workplace coverage.

Although GAO said the administration is making progress, its report concluded that security flaws “will likely continue to jeopardize the confidentiality, integrity and availability of”

Investigators identified weaknesses protecting sensitive information that flows through a key part of the system, called the data services hub. Operating behind the scenes, the hub pings federal agencies such as Social Security, IRS and Homeland Security to verify the personal details of consumers.

The report also found “significant weaknesses” in health insurance sites operated by states, which connect to the data hub. Currently, 12 states and Washington, D.C., run their own websites.

SOURCE: Associated Press