No. 123 Obama Health Plan: Rationing, Higher Taxes, and Lower Quality Care

Published August 6, 2009

President Barack Obama and Congressional Democrats are rushing to enact legislation that would overhaul the way health care is financed and delivered in the United States. It would dramatically increase the role of government in virtually all aspects of health care. Such an initiative should be carefully studied to determine whether it actually solves problems in the health care arena or makes them worse.

National health plans similar to what President Obama is proposing have been adopted in other countries. They always start out promising universal access and free or reduced-price health care. But they end up with massive institutional bureaucracies whose purpose and function are to deny health care and medical services. Often they fail to control spending despite resorting to withholding care to politically weak groups.

President Obama insists that his plan to fundamentally restructure health care is needed to reduce costs. He has touted a report from his Council of Economic Advisors that specifies exactly how that would be done. That report, however, elaborates a policy of thorough government health care rationing achieved through government control of the financing and delivery of care.

This study will explain how the health policy changes President Obama and Congressional Democrats support would cause millions of Americans to lose their choice of doctors and insurance coverage, require that access to care be strictly rationed, and cause the quality of care to deteriorate. Despite all this sacrifice, nationalizing health insurance in America would require major tax increases, slow economic growth, and increase the national debt.

Part 2 of this study describes the Obama health plan as it is presented in legislation being debated in Congress. Part 3 explains how the Obama health plan would result in the loss of freedom of choice. In particular, it shows how you would not be free under President Obama’s plan to keep your current health insurance because employers would “dump”millions of people into a one-size-fits-all government-run program. Part 4 explains how the Obama plan would give government the power to ration health care, including the power to deny access to the elderly, who need it the most.

Part 5 explains how, despite rationing, the Obama health plan would increase health costs. Part 6 describes the intractable entitlement crisis America already faces based on the undeliverable promises made for Social Security, Medicare, and Medicaid. The Obama health plan would recklessly add yet another unfunded middle-class entitlement program, this one giving subsidies for families earning $88,000 per year and more.

Part 7 discusses the health policy reforms America should adopt, based on expanding patient power and choice in a market-based health care system. These reforms would provide a true health care safety net that would ensure no one suffers without essential health care while reducing costs and preserving those parts of the current health care system that work. Part 8 presents a brief summary and concluding remarks.

Today, Americans enjoy the best health care and medical services in the world, an important part of our high standard of living. President Obama has said “my view is that health care reform should be guided by a simple principle: fix what’s broken and build on what works.” But that is not what his plan would do. Instead, he would tear down what is good about the current system and replace it with old-fashioned and outdated socialized medicine policies adopted by other countries, reflecting their lower living standards. It would be a terrible mistake.