by Joel Skousen, World Affairs Brief
Rep. Joe Wilson of South Carolina said it all when he yelled openly, “You lie!” at President Obama during his speech to Congress on health reform. Later he apologized for his “lack of civility,” but he shouldn’t have. There were several really big whoppers that Obama told, which I will cover in detail. Wilson’s rebuff came specifically after the President labeled critics of his bill liars for arguing that illegal aliens would be covered under the plan. While not specifically true, it is effectively true since the bill lacks any provision for checking on legal status. This week I’ll explain why the fundamentals of health care economics totally contradict Obama’s claim that this huge expansion of the healthcare system will pay for itself, and that he can guarantee no one will have to give up any coverage they now have.
Sure, almost everyone wants cheaper health care and universal access, especially those with major health problems or who know they are heading for major health problems. The current system is a form of socialism because insurance companies pool the costs of treating everyone and come up with one premium to fit all subscribers. The unhealthy ones have their expensive medical procedures subsidized by the healthy ones. The healthy stay in the system because their employer is paying and they fear it is inevitable that they will join the ranks of the unhealthy someday.
Insurance systems jockey for position and profits relative to the competition by restricting unnecessary services, eliminating coverage for pre_existing conditions, and negotiating fixed contracts for doctor’s services where possible. They also steer away from states that mandate certain universal coverages that add to the cost of servicing their pool of members.
Here is an analysis of the nutritional and economic fundamentals that no amount of wishful thinking is going to change:
1) The average American’s eating habits are horrible and getting worse. The small increase in adding “organic” foods to the diet for a small percentage of Americans is not even coming close to counterbalancing the big negative factors: excessive food quantity, not enough raw foods, way too much sugar, too much meat, too much nutrient deficient processed food, and high quantities of damaging chemical additives including preservatives, msg, imitation sugars, and environmental pollutants (including chlorinated and fluoridated waters supplies). All of this ensures that American health problems will continue to rise.
2) The establishment health care system’s total reliance on drugs and surgery cannot fix most of America’s health problems __it can only mask and ameliorate the symptoms and deal with the massive side effects of drugs. Surgery is wonderful in repairing damage from accidents, but most surgery deals with organ failure that is preventable. The overall system, including government regulators, medical boards, medical colleges, pharmacies, and even insurance companies is controlled by protocols dictated by or suborned by drug company money. These protocols, especially those related to internal medicine, are hostile in the extreme to natural health practitioner methods that are cheaper and more effective in the long term. Medically trained doctors give lip service to prevention but don’t really have a good understanding of nutrition and endocrine health that is the key to good health and longevity.
3) The insurance system does not give enough incentives for people to stay out of the system and take responsibility for their own health, much less pay the price necessary to induce them to avoid junk food and overeating. No system will work or be affordable without forcing people to avoid bad habits and be more careful. The blame lies mostly with Congress and Big Pharma for crafting the tax incentives of making corporation health insurance for employees deductible. When health insurance is paid for mostly by business (passing the cost on to consumers) it distances the cost of health care significantly from the responsible individual__allowing people to think they are getting a freebee__that their health problems can be fixed without much cost, hence, or little incentive to stay healthy. People need to fear the cost of bad habits if they are going to change behavior.
Currently, they only fear the cost of having no insurance __which doesn’t cause them to eat better, but rather to demand cheap “universal access” from government__which Obama is taking advantage of. Health care economists fail to realize that the dramatic rise in health care costs is not only because of bad eating habits, but lack of consumer resistance to cost increases and unnecessary and expensive tests since “the insurance company pays__not the user.” Costs only stabilize when the consumer resistance is high, and when cheaper natural alternatives are allowed. The current system, and every current reform proposal refuses to address these core issues.
The Republican response by Rep. Charles Boustany (R_La), a doctor, had some good ideas that followed the recommendations by Whole Foods CEO John Mackey:
1) “Individuals, small businesses and other groups should be able to join together to get health insurance at lower prices, the same way large businesses and labor unions do [and have the same tax advantages].
2) “Insurers should be able to offer incentives for wellness care and prevention (but you have to break the establishment medical monopoly over state regulatory boards to allow for natural alternatives). That’s something particularly important to me. I operated on too many people who could have avoided surgery if they’d made simply __ simply made healthier choices earlier in life.
3) “We need to establish tough liability reform standards, encourage speedy resolution of claims, and deter junk lawsuits that drive up the cost of care.
4) “Let’s also talk about letting families and businesses buy insurance across state lines. I and many other Republicans believe that that will provide real choice and competition to lower the cost of health insurance. Unfortunately, the president disagrees.”
Boustany and the Republicans who vetted his speech also had some very bad ideas:
1) “All individuals should have access to coverage regardless of pre_existing conditions.” Forcing the pool of insured to accept high maintenance people into the system will raise costs dramatically for those that are healthy. No one has the “right” to force others to pay for or subsidize their health problems. If the government picks up the extra cost, huge deficits will result.
2) He pandered to several issues just like the Democrats: “It’s clear, the American people want health care reform… This Congress can pass meaningful reform soon to reduce some of the fear and anxiety families are feeling in these very difficult times… Working together in a bipartisan way, we can truly lower the cost of health care while improving quality for the American people.” No one can lower the costs and increase quality by simply expanding coverage and including the 36 million unhealthy people who presently can’t get insurance because they are bad risks. With few exceptions, those same people are responsible for having become bad risks.
LIES AND FALSE PROMISES
Ed Rogers wrote in the Washington Post that, “Obama’s eloquent speech tonight was a sugar cube that may produce a 48_hour high. The speech was a net plus, but nothing substantive was resolved. The rhetoric and the facts still don’t match. The call for a public plan is alive and well. The left and the unions are happy, and the vulnerable democrats facing reelection in 2010 are still worried. Nothing in the speech suggested that the plan will do anything other than add to Americans’ debt. Nothing in the speech makes seniors believe that they will not face Medicare cuts. The emotions that drove the summer town_hall confrontations are still as intense as before the speech.”
Here is my review and commentary [in brackets] of Obama’s most egregious distortions. First, Obama misrepresented the blame for rising costs. “We spend one_and_a_half times more per person on health care than any other country, but we aren’t any healthier for it [and never will be by shielding the end user from the cost consequences of his bad eating habits]. This is one of the reasons that insurance premiums have gone up three times faster than wages [no, it's because of no resistance to the cost and price increases because insurance pays]. It’s why so many employers _ especially small businesses _ are forcing their employees to pay more for insurance, or are dropping their coverage entirely [this is actually a sound market response that would eventually help to make people change their habits].
Second, he said, “$1000 per year (per person) pays for somebody else’s emergency room and charitable care.” But what he fails to say is that almost 2/3rds of that cost is for illegal aliens. Even absorbing those costs into the system is less than half of what economists estimate it would cost for a public subsidized option to bring them into the insurance system.
Third, Obama made the huge leap of complaining about the current Medicare system being an “unsustainable burden on taxpayers… If we do nothing to slow these skyrocketing costs,” he said, “we will eventually be spending more on Medicare and Medicaid than every other government program combined.” Yes, indeed, and expanding the system to include all the people with pre_existing conditions will only increase these costs. Yet, Obama has the audacity to claim, “First, I will not sign a plan that adds one dime to our deficits _ either now or in the future. Period. [This is a massive lie and a virtual impossibility]. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize.” I can guarantee that Congress won’t follow through on that anymore than balancing the budget annually. They will simply employ magic accounting tricks like they do now to hide current deficits. I’ll show the real cost figures later.
Fourth, Obama promised that “First, if you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have.” This is a typical socialist ploy__promise the beneficiaries all the benefits while forcing the providers of the benefits to shoulder all the costs. What Obama doesn’t say is that forcing existing insurers to accept millions of unhealthy users into the pool without raising costs will drive them to ration care, cut salaries or go out of business. In the end, as with all price controls, when there is no more profit, insurance companies will quit and THEN people will lose their coverage. You want proof? Obama admitted, “As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out_of_pocket expenses… And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies _ because there’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse.” If you think your existing plan will stay in business under these and other provisions that will surely be added, you’re kidding yourself.
Fifth, Obama claims that his new market for insurance exchanges will provide voluntary incentives for insurance companies to compete, by joining forces in pools. “This is how large companies and government employees get affordable insurance. It’s how everyone in this Congress gets affordable insurance [not at all. Congressmen get cradle to grave protection at zero cost to themselves. No private company can offer that].
And all insurance companies that want access to this new marketplace will have to abide by the consumer protections I already mentioned [ certainly not voluntary, and will add huge costs]. This exchange will take effect in four years [meaning it becomes mandatory in four years__which will cause people's existing plans to change and become more expensive, or go out of business].
Sixth, Obama claims the public option will not destroy the private market. “For those Americans who can’t get insurance today [in the private market] because they have pre_existing medical conditions, we will immediately offer low_cost coverage [the Public Option] that will protect you against financial ruin if you become seriously ill.” And who will pay? The taxpayer will pay.
“An additional step we can take to keep insurance companies honest is by making a not_for_profit public option available in the insurance exchange. Let me be clear _ it would only be an option for those who don’t have insurance. No one would be forced to choose it [but the low subsidized price would guarantee it] and it would not impact those of you who already have insurance [except for the fact that the lower price would cause many to switch over leaving existing companies with a shrinking pool of payers].
“Insurance companies and their allies don’t like this idea. They argue that these private companies can’t fairly compete with the government. And they’d be right if taxpayers were subsidizing this public insurance option. But they won’t be [REALLY? Every government medical program runs in the red eventually. A subsidy is politically certain once people get used to the cheap benefits]. I have insisted that like any private insurance company, the public insurance option would have to be self_sufficient and rely on the premiums it collects [Like the Post Office? The "self_sufficient" Post Office is running higher and higher deficits and is already being bailed out by the taxpayer]. But by avoiding some of the overhead that gets eaten up at private companies by profits, excessive administrative costs and executive salaries, it could provide a good deal for consumers [This is a socialist pipe dream. Government companies have never saved on costs compared to for_profit companies].”
Seventh, Obama lied in his campaign about being against mandatory participation. As Politico.com noted, “He proposed during the campaign _ as he does now _ that larger businesses be required to offer insurance to workers or else pay into a fund. But he rejected the idea of requiring individuals to obtain insurance. He said people would get insurance without being forced to do so by the law, if coverage were made affordable. And he repeatedly criticized his Democratic primary rival, Hillary Rodham Clinton, for proposing to mandate coverage.”
Yet, now the great demagog says, “There may still be companies that refuse to do right by their workers [as if healthcare were a free "right"]. The problem is, such irresponsible behavior costs all the rest of us money. If there are affordable options and people still don’t sign up for health insurance, it means we pay for those people’s expensive emergency room visits.” This is a pervasive and spurious argument. Just because the government and the courts force hospitals to treat indigent people (mostly illegals) doesn’t give them the right to force everyone else to buy insurance or control their choices. That would be like someone coming into your house and saying he was going to guarantee your home against damage and then use that one_sided contract (never legal) to control what you do in your home.
Obama continues, “That’s why under my plan, individuals will be required to carry basic health insurance _ just as most states require you to carry auto insurance.” This is defective logic. Auto insurance or financial responsibility laws are justifiable only because driving a vehicle causes occasional damage to others or other’s property. Lack of health insurance, in contrast, has no direct affect on other’s rights. Just because government unilaterally pays (or forces others to pay) for the uninsured does not give them the right to force everyone into the system. In fact, just like public education, Obama wants to force those of us who don’t use the establishment system to help others pay for the extravagant buildings and systems that we don’t use or believe in. I realize I speak for a tiny minority, but it’s a matter of principle and right.
Lastly, Obama says that “Improving our health care system only works if everybody does their part.” Yes, but one’s portion or responsibility has to be justly allocated, with healthy people not being forced to pay the same as unhealthy people__otherwise there is no incentive to avoid costing the system more money. The current system only does this in part, and such discriminatory judgments and advantages would be totally outlawed under ObamaCare.
THE REAL COSTS OF OBAMACARE
If the bankrupt Social Security System, Medicare System, and Postal System are any indications of future performance the cost of universal health coverage under the monopoly of establishment medical protocols will be a financial disaster. Everyone will lose in this game except government bureaucrats. This proposal creates 53 new government bureaucracies, adds hundreds of billions to the national debt and raises taxes on business by $600 billion.
For people like me, who are self_insured through personal savings and sound nutrition, this will be a huge tax increase__having to pay thousands per year in health insurance premiums or tax penalties for something I don’t use. For people in the health care industry, you will eventually become government regulated employees and your salaries will be capped. Those of you who work for private insurance companies may eventually lose your jobs. Those that survive will be run in lock step with the public option. If you are on Medicare, this program makes cuts of $500 billion, while doing virtually nothing to make the program better for our seniors. Expect further rationing of care as in virtually all other socialist systems. For those who rely on private insurance, you policy, benefits and costs will change__and it will not be for the better. Only government employees, especially Congressmen and high officials, will be better off.
Yet Obama persists, “The plan will not add to our deficit. The middle_class will realize greater security, not higher taxes. And if we are able to slow the growth of health care costs by just one_tenth of one percent each year, it will actually reduce the deficit by $4 trillion over the long term.” Absolute bald_faced lies. Even the Fact Checker at the Associated Press took Obama to task:
“President Barack Obama used only_in_Washington accounting Wednesday when he promised to overhaul the nation’s health care system without adding ‘one dime’ to the deficit. THE FACTS: By conventional arithmetic, Democratic plans would drive up the deficit by billions of dollars. The president’s speech to Congress contained a variety of oversimplifications and omissions in laying out what he wants to do about health insurance… House Democrats offered a bill that the Congressional Budget Office said would add $220 billion to the deficit over 10 years [always and grossly underestimated]. But Democrats and Obama administration officials claimed the bill actually was deficit_neutral. They said they simply didn’t have to count $245 billion of it _ the cost of adjusting Medicare reimbursement rates so physicians don’t face big annual pay cuts.
“Obama said, ‘Don’t pay attention to those scary stories about how your benefits will be cut. … That will never happen on my watch. I will protect Medicare.’ THE FACTS: Obama and congressional Democrats want to pay for their health care plans in part by reducing Medicare payments to providers by more than $500 billion over 10 years [the current deficit in Medicare would require much deeper cuts sooner]. The cuts would largely hit hospitals and Medicare Advantage, the part of the Medicare program operated through private insurance companies. Although wasteful spending in Medicare is widely acknowledged, many experts believe some seniors almost certainly would see reduced benefits from the cuts.
“Obama said, requiring insurance companies to cover preventive care like mammograms and colonoscopies ‘makes sense, it saves money, and it saves lives.’ THE FACTS: Studies have shown that much preventive care _ particularly tests like the ones Obama mentions _ actually costs money instead of saving it. That’s because detecting acute diseases like breast cancer in their early stages involves testing many people who would never end up developing the disease. The costs of a large number of tests, even if they’re relatively cheap, will outweigh the costs of caring for the minority of people who would have ended up getting sick without the testing.”
