THERE IS NO SECOND PLACE

Every one has an opinion on how to save health care.

           

                      Looming Entitlement Tsunami Threatens America's Health Care Freedom
By John Boehner
Thursday, October 4, 2007

Every day millions of Americans reap the benefits of having the best health system in the world. We have the most skilled specialists, doctors, nurses, and medical technicians available to us, usually within a short distance. Americans are living longer, healthier lives as a result of the sophisticated, patient-focused, competition-based health system that has emerged in our country since the advent of medical science and technology. Yet with all of its success, there are clear threats to the system’s long term financial sustainability and the health care freedom Americans enjoy. The federal government faces a tsunami of debt and deficit caused by the explosion of promised benefits that—if left unchecked—will swallow up all other government spending. The time for dealing with these threats is upon us. The solutions need to start now.

The Medicare ‘Entitlement’

A quarter of health spending in the United States, about $420 billion this year, is by the Medicare program established by the government in 1965 to ensure people 65 years old and older have access to health care. Medicare is an entitlement covering 44 million older Americans (or 14 percent of all Americans) and pays hospitals, doctors, suppliers, drug plans, and a variety of other providers. Medicare is financed by a mix of premium payments by beneficiaries, payments directly from federal revenues, and a payroll tax on workers and employers.

Entitlement programs, usually established by Washington policy makers with noble intentions, are programs literally on auto-pilot. Like all entitlement programs, Medicare spending automatically increases by significant amounts every year. The yearly increases for Medicare have been skyrocketing for many years, averaging 8 percent every year from 2000 to 2005, well ahead of the pace of overall economic growth.

Medicare spending has doubled since the mid-1990s and is expected to continue growing at about 8 percent every year for the next decade. According to the nonpartisan Congressional Budget Office (CBO), by 2017, Medicare spending is projected to more than double to $853 billion. As a share of the total economy, Medicare expenditures currently stand at 3 percent, growing to 6.5 percent by 2030. As a comparison, we will spend 4 percent of the economy this year on national defense.

These shocking rates of increase for Medicare spending would be of little consequence if money grew on trees. But absent any commonsense reforms by Congress and combined with the imminent explosion of Social Security entitlements, these increases are simply unsustainable. They constitute a gathering fiscal tsunami for America’s taxpayers. Three simple and unavoidable demographic realities are certain to push Medicare to the breaking point.

Disturbing Trends

The first of these realities is the retirement of the Baby Boom generation beginning next year, as the first Boomers born in 1946 start collecting early, partial Social Security checks. The trend accelerates in January 2011 as the ’46 Boomers retire at age 65 and become eligible for full Social Security and Medicare benefits. Put simply: the population moving into Medicare is set to explode in less than four years.

The second reality is the dramatic narrowing of the ratio of workers to retirees. According to estimates, there are roughly 3.5 workers today for every retiree. By 2020, the ratio will narrow to about 2.5 workers, and by 2040 there will be 2 workers for every retiree. To give some perspective on this: in 1945, the ratio was 40-to-1. By the 1960s, the ratio had slipped to 5-to-1.

The third reality is the rise in American life expectancy. On September 12, the Center for Disease Control and Prevention reported that life expectancy in the United States has reached 78 years, the highest ever. In the 1950s, life expectancy in the U.S. was less than 70 years. The typical American citizen now lives nearly a decade longer than the typical American citizen a half-century ago. This is good news, of course—but it also puts upward pressure on entitlement programs that have been put on autopilot by Congress.

There is another factor that has to be taken into account, and that is the on-going surge of health care costs in the United States. Unlike the three demographic changes, this trend is not inevitable. Maintaining the best health care system in the world can’t be done on the cheap, but there are many factors within our control as a society that drive up costs or infringe on health care freedom. Two examples are over-regulation and predatory litigation, which are tremendous cost drivers in health care.

The cumulative impact of all these trends on the current health system is clear and dramatic. It means an ever-increasing number of longer-living retirees moving into a Medicare program financed, proportionately, by a shrinking number of working Americans. Put succinctly, it means Medicare is locked on a collision course with massive, certain, catastrophic bankruptcy.

The impact of a Medicare bankruptcy will have an enormous impact on the personal lives of virtually every American, from the young and healthy to the aged and needy. If policy makers in Congress do not begin to alter Medicare’s path now, Washington will eventually be forced to decide between three punishing options: dramatic tax increases on all Americans, including working families; dramatic cuts in non-entitlement spending, eliminating programs Americans regard as vital, like defense or education; or, a combination of both.

A colleague of mine, Congressman Paul Ryan of Wisconsin, recently warned on the House floor: “We have a system today where all the fiscal experts in Washington and across America from the left and the right are telling us health care’s unsustainable; the entitlements in this country are bankrupting America; that our children and grandchildren simply won’t be able to pay for the government of tomorrow because of the cost of health care today and the trajectory it’s on.”

Trustees Pull Medicare ‘Trigger’

The 2007 Social Security and Medicare Trustees report, issued the past April, underscores the perilous condition of Medicare’s finances. “Social Security and Medicare both present daunting fiscal challenges,” the Trustees say, adding “their fiscal problems are driven by inexorable demographic change and, in the case of Medicare, relentless increases in health care costs, and are not likely to be greatly ameliorated by economic growth or mere tinkering with program financing.”

Medicare’s financial position is so severe is that the Trustees this year issued the first ever “Medicare funding warning.” The “trigger” for this warning is that, within the next seven years, the Trustees estimate that more than 45 percent of Medicare’s funding will come from the government’s general revenues as opposed to premiums and fees.

Retired Federal Reserve Chairman Alan Greenspan is also among those who have recently warned of the need to do something about Medicare’s ongoing march toward fiscal disaster. In a September 17 interview with Fortune Magazine, Greenspan said the most urgent economic problem facing America is addressing Medicare. “[W]hat’s at stake here is the fiscal stability of the American government…the problem is that the arithmetic is inexorable,” Greenspan said, adding “it’s unethical and immoral for a government, when confronted with these types of events, not to take action. What do we elect people for?”

Commonsense Reforms

Greenspan is correct. Action must begin today to avert a catastrophic collision between Medicare and bankruptcy tomorrow. Today’s elected leaders have a moral obligation to current and future generations of Americans to begin to confront the challenge.

As the senior Republican on the House Budget Committee, Congressman Ryan crafted an alternative budget for Fiscal Year 2008 that balances by 2012, addresses the runaway growth of entitlement spending, demands accountability in other government spending, and helps maintain a strong economy. Unfortunately the Ryan plan was ignored by the majority in Congress in favor of a budget that does nothing to acknowledge the increasingly dire condition of Medicare’s finances.

Some positive steps have been taken by Congress in recent years, however, that may present a foundation for future progress. In 2003, a Republican-led Congress passed the Medicare Modernization Act (MMA) to start the process of addressing Medicare’s troubling trends by emphasizing prevention and personal choice and utilizing the health care market place. The MMA created a prescription drug plan designed to lower out of pocket costs for Medicare beneficiaries and ease financial pressures on the parts of Medicare supporting hospitals and doctors.

The reforms implemented in 2003 recognized an important fact: in the long run, investing in the technological advancements of modern medicine to keep beneficiaries healthy saves money and resources that would have been used when a beneficiary becomes ill. It’s more efficient to support preventative drugs than long hospital stays. While criticized for its high cost projections at the time, the program is now expected to cost significantly less than originally estimated by Washington’s static-minded budget forecasters who rarely take into account the positive impact of markets when making their calculations.

Last year, the premium for the drug plan, originally expected to average $37 a month, averaged only $24 per month. The reason? Competition and freedom. Seniors can chose from a variety of drug plans to meet their specific health care needs. The declining costs were recently noted in the annual Medicare Trustees report.

The other reform passed in 2003 was Medicare Advantage, private health plans which provide greater flexibility and choice—beyond traditional Medicare—for things like specialized care and preventative medicines. Medicare Advantage now has 8.3 million beneficiaries enrolled, the majority of which are urban poor seniors, rural seniors, and minorities. One of the most notable achievements of Medicare Advantage is its success in coordinating care for seniors with chronic illnesses like diabetes, which is a huge driver of Medicare’s cost.

Regrettably, instead of being emulated, these effective reforms have been under attack in Congress this year. The House, in fact, targeted Medicare Advantage at one point with $157 billion in cuts that would have left 3 million seniors without coverage. Fortunately that plan has at least temporarily been abandoned.

Republicans recognize more government control will do nothing to head off the financial tsunami that looms on the horizon for the entire health system. Rather, solutions must be found that emphasize individual choice, competition, greater access and flexibility—a more patient-centered health care system, rather than a one-size-fits-all government program. We believe reforms should put each American at the center of his or her health care decisions, maximizing personal freedom and control and keeping the heavy hand of government intervention to a minimum.

As Congressman Ryan puts it:

“Do you trust Washington with your money to make personal decisions for you or do you trust individuals to make them for themselves? I would argue, and I think the evidence is clear, that when individuals make the decisions for themselves, when they’re spending their own money, when they’re talking to their doctor and making decisions on their own treatments, with affordable insurance, that the system’s going to be far better, people are going to be much more satisfied, and we’re going to save a lot more money and we'll have healthier outcomes.”

In their report, the Medicare Trustees concluded with this lucid piece of advice: “Prudence dictates action sooner rather than later to address these fiscal challenges.”

Let’s hope decision makers in Congress start listening soon. For Medicare and future generations of Americans, the work must begin today.

There is nothing more to say. Health care

Is There a Trial Lawyer in the House?

by Ann Coulter

Posted: 09/19/2007

The only "crisis" in health care in this country is that doctors are paid too little. (Also they've come up with nothing to help that poor Dennis Kucinich.)

But the Democratic Party treats doctors like they're Klan members. They wail about how much doctors are paid and celebrate the trial lawyers who do absolutely nothing to make society better, but swoop in and steal from the most valuable members of society.

Maybe doctors could get the Democrats to like them if they started suing their patients.It's only a matter of time before the best and brightest students forget about medical school and go to law school instead. How long can a society based on suing the productive last?

You can make 30 times as much money as doctors by becoming a trial lawyer suing doctors. You need no skills, no superior board scores, no decade of training and no sleepless residency. But you must have the morals of a drug dealer. (And the bank wire transfer number to the Democratic National Committee.)

The editors of The New York Times have been engaging in a spirited debate with their readers over whether doctors are wildly overpaid or just hugely overpaid. The results of this debate are available on TimeSelect, for just $49.95.

"Many health care economists," the Times editorialized, say the partisan wrangling over health care masks a bigger problem: "the relatively high salaries paid to American doctors."

Citing the Rand Corp., the Times noted that doctors in the U.S. "earn two to three times as much as they do in other industrialized countries." American doctors earn about $200,000 to $300,000 a year, while European doctors make $60,000 to $120,000. Why, that's barely enough for Muslim doctors in Britain to buy plastic explosives to blow up airplanes!

How much does Pinch Sulzberger make for driving The New York Times stock to an all-time low? Probably a lot more than your podiatrist.

In college, my roommate was in the chemistry lab Friday and Saturday nights while I was dancing on tables at the Chapter House. A few years later, she was working 20-hour days as a resident at Mount Sinai doing liver transplants while I was frequenting popular Upper East Side drinking establishments. She was going to Johns Hopkins for yet more medical training while I was skiing and following the Grateful Dead. Now she vacations in places like Rwanda and Darfur with Doctors Without Borders while I'm going to Paris.

Has anyone else noticed the nonexistence of a charitable organization known as "Lawyers Without Borders"?

She makes $380 for an emergency appendectomy, or one-ten-thousandth of what John Edwards made suing doctors like her, and one-fourth of what John Edwards' hairdresser makes for a single shag cut.

Edwards made $30 million bringing nonsense lawsuits based on junk science against doctors. To defend themselves from parasites like Edwards, doctors now pay hundreds of thousands of dollars in medical malpractice insurance every year.

But as the Times would note, doctors in Burkina Faso only get $25 and one goat per year.
As long as we're studying the health care systems of various socialist countries, are we allowed to notice that doctors in these other countries aren't constantly being sued by bottom-feeding trial lawyers stealing one-third of the income of people performing useful work like saving lives?

But the Democrats (and Fred Thompson) refuse to enact tort reform legislation to rein in these charlatans. After teachers and welfare recipients, the Democrats' most prized constituency is trial lawyers. The ultimate Democrat constituent would be a public schoolteacher on welfare who needed an abortion and was suing her doctor.

Doctors graduate at the top of their classes at college and then spend nearly a decade in grueling work at medical schools. Most doctors don't make a dime until they're in their early 30s, just in time to start paying off their six-figure student loans by saving people's lives. They have 10 times the IQ of trial lawyers and 1,000 times the character.

Yeah, let's go after those guys. On to nuns next!

But Times' readers responded to the editorial about doctors being overpaid with a slew of indignant letters -- not at the Times for making such an idiotic argument, but at doctors who earn an average of $200,000 per year. Letter writers praised the free medical care in places like Spain. ("Nightmare" in the Ann Coulter dictionary is defined as "having a medical emergency in Spain.")

One letter-writer proposed helping doctors by having the government take over another aspect of the economy -- the cost of medical education:

"If we are to restructure the system by which we pay doctors to match Europe, which seems prudent as well as inevitable, we must also finance education as Europeans do, by using state dollars to finance the full or majority cost of higher education, including professional school."

And then to reduce the cost of medical school, the government could finance "the full or majority cost" of construction costs of medical schools, and "the full or majority cost" of the trucks that bring the cement to the construction site and the "the full or majority cost" of coffee that the truck drivers drink while hauling the cement and ... it makes my head hurt.

I may have to see a doctor about this. I should probably get on the waiting list now in case Hillary gets elected.

That's how liberals think: To fix an industry bedeviled by government controls, we'll spread the coercion to yet more industries!

The only sane letter on the matter, I'm happy to report, came from the charming town of New Canaan, Conn., which means that I am not the only normal person who still reads the Times. Ray Groves wrote:

"Last week, I had the annual checkup for my 2000 Taurus. I paid $95 per hour for much needed body work. Next month, when I have my own annual physical, I expect and hope to pay a much higher rate to my primary care internist, who has spent a significant portion of his life training to achieve his position of responsibility."

There is nothing more to say.

Hillary Clinton's health care

Read Hillary's Lips: 'No New Bureaucracy'
The return of 'HillaryCare' leaves many questions unanswered, while journalists paint her plan as an innovative, mature solution.

By Amy Menefee
Business & Media Institute
9/19/2007 5:01:19 PM The lead story in the media should be how much Hillary Clinton is not telling us about her $110-billion-a-year health care plan.

 The New York senator and Democratic presidential candidate isn’t answering any questions she doesn’t want to answer – like how to enforce a nationwide mandate for health insurance. And in coverage of her newly-announced health care plan, the media let Clinton’s vagueness go unchallenged.

 “The Hillary Clinton health plan: too hot? Too cold? Or just right? We’ll check in with all sides in our ‘Reality Check.’”

 That Goldilocks introduction came from CNN’s Heidi Collins on the September 18 “CNN Newsroom.” But for the story that followed, “all sides” consisted of Mitt Romney, former governor of Massachusetts and architect of that state’s individual health insurance mandate, and Linda Blumberg of the liberal Urban Institute.

CNN’s William Schneider closed out the Goldilocks story theme with the bedtime story of “choice” and the idea that Clinton’s plan was somehow moderate.

 “But middle income Americans who felt threatened in 1994 are now being promised greater choice, including the choice to keep what they have,” Schneider said. “Critics on the right complain her plan goes too far. Critics on the left complain it doesn’t go far enough. The Clinton campaign says she feels perfectly comfortable in the middle.”

 Media coverage of Clinton’s plan thus far has focused on how much the former First Lady has “learned” since her earlier attempt at nationwide health insurance in 1993-94. Now she is an older Hillary Clinton, with “the scars” to show her expertise, she told interviewers.

But in reality, it is the return of “HillaryCare” – a plan for massive government expansion and regulation, even though Clinton ironically promised in her announcement that there would be “no new bureaucracies.”

 “It’s like one of the monsters in a grade-B slasher flick,” said Michael Tanner, director of health and welfare studies at the Cato Institute, in a podcast. “No matter how many times you think it’s dead, it keeps rising up.”

 Journalists turned to other presidential candidates as Clinton’s “critics,” leaving out representatives of the insurance, pharmaceutical and health care industries that would be affected by her sweeping government expansion. And Clinton got away with telling them only generalities of this mandate that would affect every American.

  “This IS a big-government, bureaucratic solution to health care,” explained Tanner. “Essentially, this is a government takeover of the health care system.”

 Nevertheless, the plan received good press even before it was released. The September 17 issue of Newsweek declared Clinton’s health care proposal “is expected to be bold, but hardly radical” and that was before the proposal was even public.

Semi-Tough Questioning

 As Clinton made the rounds on four different morning shows – at the same time – September 18, journalists gave her an open platform to speak.

  “Under the plan, everyone would be required to have health insurance, much as we're all required to have car insurance,” said Diane Sawyer on the September 18 “Good Morning America.”

 A mandate just like car insurance? According to data compiled by the Insurance Research Institute and the Employee Benefit Research Institute, at least 15 states and the District of Columbia have more people driving without auto insurance than they do people without health insurance.

 Sawyer asked Clinton, “How would you enforce it?” Clinton did not answer, but instead talked around the question. Sawyer didn’t pursue it further.

 John Roberts made another attempt on CNN’s “American Morning”: “how do you know that you’re not just going to develop and create here another huge entitlement that is going to grow at double-digit inflation?” Clinton assured him she had cost-cutting measures in mind, and touted her idea for electronic medical records.

 Others in the media didn’t try as hard. Dr. Timothy Johnson, medical contributor for ABC “World News,” used his time on that show September 17 to defend government’s role in health care.

 “In fact, the government programs that Hillary will offer … have a lot of private choice,” he said. So it’s not “socialized medicine”?

 “They’re obviously using that word to scare people,” he said, and extolled Clinton’s ideas: “Every industrialized country in this world that is successful with health care – often more successful than we are – has a partnership between government and the private sector, and that’s what I think we have to have in this case.”

 Johnson missed the irony in his statement that “The government has a role in providing guidelines – maybe regulations, but leaving free choice.”

 Clinton’s plan would stringently regulate the insurance and pharmaceutical industries, while forcing everyone to buy health insurance. Her offer of “free choice” after all those government mandates includes a new government health insurance plan, which would be paid for by taxpayers – not exactly something taxpayers can opt out of.

 The key to the media’s portrayal of her plan as moderate – which attempts to borrow from free-market language – is “managed competition,” Cato’s Tanner said. The plan would “leave insurance to be privately owned, but we’ll regulate it sort of like a public utility and let it exist in kind of an artificial marketplace.”

 The result? It lets the government decide how much coverage is enough – how much each person is required to have – and “the government starts designing insurance policies,” Tanner said.

What Can I Buy with That?

 Clinton said she would finance her $110-billion-per-year plan partly through tax hikes, also known as “rolling back” the tax cuts for the top two earnings brackets.

 The Wall Street Journal, however, wasn’t convinced further tax hikes wouldn’t be needed: “That $110 billion is a back-of-the-envelope calculation, and Team Hillary is keeping the specifics in its pocket,” said a September 19 editorial.

 How much is $110 billion? And how does that compare to the other top Democratic candidates’ plans? That amount of money works out to an extra $367 chipped in per year for every man, woman and child in the United States.

 For starters, Sen. Barack Obama’s (D-Ill.) plan is estimated between $50 billion and $65 billion. That’s about the same as the combined gross domestic product (GDP) of Honduras, Panama and Nicaragua, according to the CIA World Factbook.

 To achieve Clinton’s $110 billion plan, take Obama’s (Honduras, Panama and Nicaragua) and add El Salvador and Belize. Her plan would cost the equivalent of five countries’ GDP – every year.

 The upper end of John Edwards’ plan, which reportedly ranges from $90 billion to $125 billion, takes all those countries and adds Jamaica.

 For some perspective on how the U.S. federal government stacks up to Clinton’s plan: at least six whole federal departments could fit inside that $110 billion, depending on which ones you select. Try adding together the Department of Education ($68 billion) + the Department of Energy ($22 billion) + the Environmental Protection Agency ($8.03 billion) + the Corps of Engineers ($7.77 billion) + the Executive Office of the President ($2.68 billion) + the Small Business Administration ($675 million). (Numbers according to the Office of Management and Budget for 2007, “Federal Government Outlays by Agency.”)

Save U.S. health care

Price Controls Wrong Prescription for Low-Cost Drugs, Economist Warns
By Fred Lucas
CNSNews.com Staff Writer
August 16, 2007

(CNSNews.com) - Democratic contenders for the 2008 presidential election want to use the federal government to lower the cost of prescription drugs, but while the move may be well-intentioned it could end up costing lives, an economist argued during an event in Washington, D.C.

"All Democratic presidential candidates agree on pharmaceutical price controls, which means people will die," John R. Lott, Jr., a senior research scientist at the University of Maryland, told a gathering Tuesday at the Cato Institute, a libertarian think tank.

Leading Democratic contenders rarely if ever use the words "price controls," which are prominent in socialized European economies and Canada, Lott observed.

At the same time, however, New York Sen. Hillary Clinton, Illinois Sen. Barack Obama and former North Carolina Sen. John Edwards have all advocated the purchase of drugs from other countries that have price controls, and want Medicare to be able to negotiate the price of drugs.

Second-tier Democratic candidates have made similar proposals.

Lott said the implications could be very serious.

"If there is a 100 percent chance that Democrats will win the presidency and in two to three years there will be price controls on drugs, there will not be much sense in developing new drugs because the pharmaceutical companies will not be able to pay for it," he asserted.

Such proposals are based on misguided altruism, Lott said.

The economist and author was speaking about his new book, "Freedomnomics," which argues for free markets and minimal government intrusion. In the book, he discusses such issues as the economic effect of divorce, abortion, the government's assistance of certain industries and free trade.

His assertions did not go unchallenged.

Jared Bernstein, senior economist with the Economics Policy Institute, a think tank that favors more government intervention in the economy, said he did not disagree with the core argument of Lott's book -- that free markets are "less imperfect" than government control.

But he told the Cato audience that America needs a strong public sector, and singled out health care in particular.

On the question of drug prices, he said: "It's a strong statement to say price controls kill people."

"You could easily argue that the current approach by pharmaceutical companies kills people," Bernstein told Cybercast News Service after the event.

"They spend more on marketing than on research," he argued. "They spend more on 'me-too' drugs and lifestyle drugs to enhance sexual performance or diminish hair loss than on drugs to treat malaria, which kills millions of people."

The federal government already invests heavily in drug research, so "it's wrong to say this is entirely the free market at play," Bernstein said.

Lott said the bottom line is if the government restricts the profit potential for a drug company, that company will have fewer incentives to produce life-saving medicines.

Health care and free markets

           

                      Health Insurance Blues: Give Choice a Chance
By Chuck Muth
Monday, August 6, 2007

The nation’s largest health insurer, UnitedHealth Group, wants to buy up Sierra Health Services in Nevada. The merger would give the new company a virtual monopoly over health insurance in the Silver State, reducing competition, which usually means increasing costs. Supporters, however, say the merger will actually reduce costs and improve service due to the efficiencies of scale the giant conglomerate will enjoy.

Nevertheless, being a free-market kinda guy I haven’t yet heard any compelling reason for the government to block this merger of two private companies. And the fact that the self-serving Culinary Union is now in open opposition to the takeover tends to weather-vane me in the opposite direction.

   

       
                    
        Democratic presidential hopeful Sen. Barack Obama, D-Ill., talks about the influence of health care lobbyists in crafting health care legislation during the Yearly Kos Convention's Presidential Leadership Forum in Chicago, Saturday, Aug. 4, 2007. (AP Photo/Charles Rex Arbogast)

   

       

Related Media:

VIDEO:                 Simon Says: Save for long-term care

VIDEO:                 Drink to Your Health

       

No, the answer to legitimate concerns about giving UnitedHealth a virtual monopoly over the health insurance market in Nevada isn’t to block the takeover of Sierra Health Services, but to open Nevada’s market to interstate competition. In this age of Amazon and eBay, it makes no sense whatsoever that Nevadans are prohibited from buying health insurance from a company located in another state.

And yet, thanks to an anachronistic law passed in 1945, the McCarran-Ferguson Act, combined with the lobbying power of Big Insurance, there is no competitive interstate insurance market similar to the highly competitive interstate banking market. For example, Nevadans can deal with a relatively small local bank or choose to deal with a big interstate bank such as Bank of America or Wells Fargo. Both entities thrive in Nevada and consumers, armed with market choice, benefit greatly.

Not so when it comes to health insurance companies.  Why not?

Because state legislators want to retain the ability to force insurance companies to foot the bill and cover expensive benefits which they don’t have the guts to sock directly to taxpayers. These are called “mandates” - as in, the legislature makes it mandatory that the insurance company cover them or the insurance company doesn’t get to operate in Nevada. Yes, legal extortion.

Around the country, many states force insurance companies to cover benefits ranging from acupuncture to marriage counseling; from contraceptives to hearing aids to hairpieces; from podiatry to osteopathy; from chiropractors to even massage therapy. All in all, there are over 1,800 such mandates found across the country. And these mandates jack up the cost of insurance, creating a huge difference in premium costs between some states.

For example, a recent e-HealthInsurance.com study showed that a healthy 25-year-old male could pick up a basic health insurance policy in Kentucky for $960 a year. That same policy in New Jersey, however, would set the lad back a staggering $5,880 a year.

And the Wall Street Journal noted that the same study “found that a typical insurance policy - $2,000 deductible, 20% co-insurance – for a family of four could be had for as little as $172 per month in a reasonably regulated locality like Kansas City, Missouri. But in New York that family’s only option – managed care – would run $840 per month, and in New Jersey family policies run a whopping $1,200-plus.”

Why shouldn’t a family in New York be able to purchase that far less expensive policy from the Missouri company?

If you want to shrink the ranks of the uninsured, perhaps it’s time to open the market and reduce the cost so that average people can afford basic coverage without all the government mandated frills. Instead of blocking the mergers of health insurance companies in one state, perhaps it’s time to open up the competition among all 50 states?

Rep. John Shadegg, Arizona Republican, has proposed just such legislation in Congress; however, Congress in the hands of pro-union/anti-free market Democrats and is unlikely to act favorably on such a common-sense, cost-free solution to the health care insurance problem. Which is why state legislatures should take the lead and open up their own markets without waiting for the feds.

Let’s give choice a chance.

Health care reform

           

                                        

Lessons from Massachusetts
By Sally C. Pipes
Thursday, August 23, 2007

Health care reform is hot this election season and presidential hopefuls from both parties appear weekly with promises of reforms that will supposedly solve our system's problems with universal coverage at affordable costs. A recent overhaul in Massachusetts that expanded taxpayer-funded health insurance and requires individuals to purchase government-approved policies is proving particularly compelling to many, not the least because its architect, Mitt Romney, is a leading Republican candidate.

In reality, the Massachusetts mandate provides a poor model for the rest of the country—unless we are looking for an expensive expansion of government. It won’t achieve universal care. It has increased government spending, bureaucracy, and regulation. It most certainly will prompt increased taxes.

   

       
                    
        Republican presidential hopeful, former Massachusetts Gov. Mitt Romney, shakes hands with Mary C. Holmes during a campaign stop at the Heritage-Heights Assisted Living Community in Concord, N.H., Wednesday, July 25, 2007. (AP Photo/Jim Cole)

   

       

Related Media:

Rudy's Sanctuary City

VIDEO:                 Presidential Hopeful Mitt Romney in Florida

VIDEO:                 Romney: America Calling

Mitt Romney, Presidential Canidate

VIDEO:                 Romney: Dems Down the Wrong Path

       

The outline of the Massachusetts law is politically seductive: Require people to purchase health insurance, render it affordable, or at least tax-deductible, and fine those who don’t comply. An increased insurance pool, it is argued, will make insurance more affordable, and costs will come down as people who rely on charity care at emergency rooms will be redirected to more cost-effective venues.

If this could work anywhere, Massachusetts is the place. The Bay State started with a high level of the population insured--more than 90 percent. It had already spent substantial sums reimbursing hospitals for uncompensated care from state coffers. It already had a guaranteed issue law, so anyone applying for insurance and able to pay the tab could be accepted. If universal coverage was achievable by government command, Mitt Romney’s Massachusetts was the place to issue it.

It's one thing for politicians to promise that their mandates will decrease costs, it’s quite another when it comes to implementing the plan. In Massachusetts, the initial costs came in higher than expected. Faced with this reality, the bureaucrats in charge of the implementation at the Commonwealth Connector Board decided that universal coverage didn't need to be universal after all, and it promptly exempted 20 percent or one in five uninsured from having to comply with the mandate.

The Connector Board also bowed to political pressure and agreed to reduce the premiums, a move that boosted program costs by $13 million. Some plans are totally free--and have therefore been popular. Other subsidized plans for people earning between 150 and 300 percent of the poverty line will cost people as much as 9 percent of income for just the premium. Not surprisingly, these plans have proven less popular. Of the 79,800 people who've enrolled in the health plans as of June 1 of this year, 59,816 signed up for the totally free plans.

This structure will produce a fiscal disaster. Considering the high premiums for those who have to pay, many will opt to remain uninsured. The fine of $216 will be more attractive than the premium. Politicians will face strong pressure not to enforce the mandate if the fines increase. Indeed, before the program started they exempted 20 percent of the target population.

At the same time, the premium subsidy makes the plans a bargain for individuals who expect to consume large quantities of health care. The insured will be older and less healthy than the average citizen. Spending will skyrocket. The taxpayer will be forced to pay or services will be rationed.

So far, this downward spiral appears to be well underway. The average age for those enrolled in the free plans is far younger than that of the plans for which a contribution is required. Not surprisingly, usage is higher for the paid plans as well.

And the doctors, they may like the plan in the short run as they will receive higher reimbursement rates for seeing Medicaid patients but in the long run, the picture is not as bright. As costs rise, they will be faced with payments being limited, rationed care, more bureaucracy, and less freedom on how they want to practice medicine.

Massachusetts may be able to limp its plan along for a few years with a combination of tax increases on employers, restrictions on enrollees, and price cuts to providers. It will not, however, achieve universal health insurance or a meaningful structure for cost control. Its most likely legacy will be to have created another government health bureaucracy, ratcheted up taxpayer health spending, and bolstered calls for a complete government takeover of health care.

Health Insurance

Health care is one of the main problems that we have to solve.  Here are some questions and maybe some answers.

Health Insurance Blues: Give Choice a Chance
By Chuck Muth
CNSNews.com Commentary
August 06, 2007

The nation's largest health insurer, UnitedHealth Group, wants to buy Sierra Health Services in Nevada. The merger would give the new company a virtual monopoly over health insurance in the Silver State, reducing competition, which usually means increasing costs.

Supporters, however, say the merger will actually reduce costs and improve service due to the efficiencies of scale the giant conglomerate will enjoy.

Hmm.  That doesn't exactly seem to be the case when it comes to the publik skools now, does it?

Nevertheless, being a free-market kinda guy I haven't yet heard any compelling reason for the government to block this merger of two private companies. And the fact that the self-serving Culinary Union is now in open opposition to the takeover tends to weather-vane me in the opposite direction.

No, the answer to legitimate concerns about giving UnitedHealth a virtual monopoly over the health insurance market in Nevada isn't to block the takeover of Sierra Health Services, but to open Nevada's market to interstate competition. In this age of Amazon and eBay, it makes no sense whatsoever that Nevadans are prohibited from buying health insurance from a company located in another state.

And yet, thanks to an anachronistic law passed in 1945, the McCarran-Ferguson Act, combined with the lobbying power of Big Insurance, there is no competitive interstate insurance market similar to the highly competitive interstate banking market. For example, Nevadans can deal with a relatively small local bank or choose to deal with a big interstate bank such as Bank of America or Wells Fargo. Both entities thrive in Nevada and consumers, armed with market choice, benefit greatly.

Not so when it comes to health insurance companies.  Why not?

Because state legislators want to retain the ability to force insurance companies to foot the bill and cover expensive benefits which they don't have the guts to sock directly to taxpayers. These are called "mandates" - as in, the legislature makes it mandatory that the insurance company cover them or the insurance company doesn't get to operate in Nevada. Yes, legal extortion.

Around the country, many states force insurance companies to cover benefits ranging from acupuncture to marriage counseling; from contraceptives to hearing aids to hairpieces; from podiatry to osteopathy; from chiropractors to even massage therapy. All in all, there are over 1,800 such mandates found across the country. And these mandates jack up the cost of insurance, creating a huge difference in premium costs between some states.

For example, a recent e-HealthInsurance.com study showed that a healthy 25-year-old male could pick up a basic health insurance policy in Kentucky for $960 a year. That same policy in New Jersey, however, would set the lad back a staggering $5,880 a year.

And the Wall Street Journal noted that the same study "found that a typical insurance policy - $2,000 deductible, 20% co-insurance - for a family of four could be had for as little as $172 per month in a reasonably regulated locality like Kansas City, Missouri. But in New York that family's only option - managed care - would run $840 per month, and in New Jersey family policies run a whopping $1,200-plus."

Why shouldn't a family in New York be able to purchase that far less expensive policy from the Missouri company?

If you want to shrink the ranks of the uninsured, perhaps it's time to open the market and reduce the cost so that average people can afford basic coverage without all the government mandated frills. Instead of blocking the mergers of health insurance companies in one state, perhaps it's time to open up the competition among all 50 states?

Rep. John Shadegg, Arizona Republican, has proposed just such legislation in Congress; however, Congress in the hands of pro-union/anti-free market Democrats and is unlikely to act favorably on such a common-sense, cost-free solution to the health care insurance problem. Which is why state legislatures should take the lead and open up their own markets without waiting for the feds.

Let's give choice a chance.

Giuliani wants to reduce the regulation of health insurance and change federal tax law that pushes people into expensive, all-inclusive plans.

Republicans need to fix health care, education, tax reform and re examine drug policy.

The GOP Debate Over Health-Care Reform
By Michael Tanner
CNSNews.com Commentary
July 30, 2007

The long-simmering battle for the soul of the Republican Party may be about to erupt, not over immigration or Iraq, but over the unlikeliest of issues: health care.

As I wrote about in my book, "Leviathan on the Right," Republicans have been increasingly split between traditional Reagan-Goldwater small-government conservatives and a new breed of "big-government conservatives" who believe in using an activist government to achieve conservative ends -- even if it means increasing the size, cost and power of government in the process.

The difference in the two camps is as clear as the difference between Ronald Reagan saying that "government is not the solution to our problem; government is the problem," and George W. Bush saying: "we have a responsibility that when somebody hurts, government has got to move."

Bush's brand of big-government conservatism brought us No Child Left Behind, the Medicare prescription drug benefit and a 23 percent increase in domestic discretionary spending. It may well have cost Republicans control of Congress. After all, on election night 2006, 55 percent of voters said that they thought the Republican Party was the party of big government.

Now, the Republican primary campaign raises the question of whether the party will continue down the Bush path or will return to its Reagan-Goldwater roots. And the coming debate over health-care reform may clearly expose the split.

Former Massachusetts Governor Mitt Romney has embraced the big-government approach. He has joined Democrats in calling for universal health coverage. The plan he supported in Massachusetts is a variation of "HillaryCare." It has received most of its attention for its unprecedented individual mandate, a requirement that every Massachusetts citizen purchase health insurance or face legal penalties. This represents the first time that a state has said that a citizen, simply by virtue of living in a state, must purchase a specific government designated and designed product.

But even more significantly, Romney's plan also created a managed competition-style regulatory authority called the Massachusetts Health Care Connector. This new regulatory body has already mandated that every health-care policy sold in the state must cover prescription drugs and has outlawed policies with deductibles of more than $2,000.

And Romney has joined Democrats in spending more to subsidize health care for the poor and middle class. In Massachusetts, he significantly increased Medicaid eligibility and provided taxpayer-funded subsidies for families of four earning as much as $62,000 a year, effectively extending welfare well into the middle class.

It is very hard to reconcile Romney's vision of health-care reform with traditional small-government conservatism.

In contrast, the traditional conservative approach to health care so far is being carried by former New York Mayor Rudy Giuliani. Giuliani, who will release a detailed health-care plan later this summer, believes that the biggest problem facing American health care is not a lack of universal coverage, but a lack of consumer choice. "It's your health; you should own your own insurance," he said in Tuesday's debate. "The reality is that we need a free market."

Giuliani wants to reduce the regulation of health insurance and change federal tax law that pushes people into expensive, all-inclusive plans. He says health insurance should be more like car insurance, where people pay out of pocket for minor repairs and maintenance but are protected against catastrophic costs. In pursuit of this goal, he has called for calling for expansion of Health Savings Accounts and replacing the current tax exclusion for employer-provided health care with a standard deduction for health insurance.

This is not a question of the merits of either candidate but a fundamental question about the direction of the Republican Party and the conservative movement in general. Being a conservative Republican should be about more than abortion policy and the War on Terror. The candidates should have to tell voters whether they still believe in traditional principles of limited government, federalism and individual liberty.

The debate over health care reform may offer voters the first opportunity to ask this question.

What to do about healthcare? Mitt Romney led the charge to overhaul the state’s healthcare system.

                                                        

Market-driven health care is best
By Doug Wilson
Sunday, February 4, 2007

Few issues pique the interest of the American people like healthcare. Politicians know this and nobly attempt to solve America’s health care problem.

Once in a while good ideas emerge from this sausage factory: Health Savings Accounts, for example. But most of the time we’re left with little more than campaign bromides that never amount to much. Such inactivity is sometimes good, particularly when it prevents the implementation of a fatally-flawed single-payer health care plan; other times bad, particularly when inactivity results from an unwillingness to deregulate the insurance industry, a move that would precipitate a dramatic fall in the price of premiums.

   

       
                    
        Republican presidential contender Mitt Romney addresses supporters during a campaign stop at the Republican Party of Kentucky's Lincoln Day Dinner at the Louisville International Convention Center in Louisville, Kentucky, February 3, 2007. REUTERS/John Sommers II (UNITED STATES)

           

When we consider recent healthcare developments in Massachusetts and California, however, one can’t help but wonder if the time of inactivity is drawing to a close. The question: Is this a good thing?

The first sign of action came from Massachusetts in April 2006 where then-Governor Mitt Romney led the charge to overhaul the state’s healthcare system. With the help of the conservative Heritage Foundation, Romney devised a plan that would drastically reduce the amount of “free-care” provided in the state by requiring all Massachusetts citizens to have health insurance.

Romney’s plan harnessed free-market principles to create an “insurance exchange” that provided citizens with a one stop-shop to purchase health insurance. According to Heritage’s Ed Haislmaier, one of the architects of the plan, the exchange works like a “stock or commodity exchange” and serves as a “clearinghouse” (but never a “product regulator”) from which individuals can choose affordable healthcare plans.

The plan requires all Massachusetts citizens to purchase health insurance from this marketplace of private insurers or from another source. Employers must provide employees with the option to purchase healthcare plans with pre-tax dollars. Those who can afford to but elect not to purchase health insurance face wage withholdings and the loss of tax exemptions. Those unable to afford insurance premiums receive government assistance to purchase insurance; the assistance is made possible thanks to Romney’s plan to redirect funds earmarked for hospitals to cover uninsured patients to help individuals purchase their own insurance.

Having uninsured “people show up when they get sick and expect someone else to pay—that’s a Democratic approach,” Romney told Fox News’ Neil Cavuto last April. “The Republican approach is to say…everybody should have health insurance. If they need help we’ll be there to help them—but no more free ride.”

The second sign of action came from my home state of California where Governor Arnold Schwarzenegger recently announced plans for a $12 billion universal health care system.

The plan seeks to insure all California residents (including illegal aliens) by taxing hospitals 4 percent and doctors 2 percent of their gross revenues. Furthermore, the plan calls for employers of 10 or more who do not provide coverage to pay an “in-lieu fee” of 4 percent of payroll.

On top of all this, the plan is sneaky. California requires any new tax measure to pass both houses of the legislature by two-thirds majorities, but since Schwarzenegger is calling his new taxes “fees” or “dividends” he hopes to avoid such a requirement. As the Wall Street Journal so brilliantly put it, Schwarzenegger wants to “call the elephant in the room a hippo and hope the public buys it.”

But the public isn’t buying. In fact, California voters defeated measures in 2003 and 2004 that would have required businesses to provide health insurance to their employees. Doctors pegged as the funding source for the plan aren’t buying either. Medgadget, a popular medical blog written by doctors, likened the plan to a declaration of “war on physicians” and said that Schwarzenegger’s action comes at a time when the medical industry is “already experiencing unprecedented levels of loss of economic liberties and…ever increasing regulation.”

Whereas Romney’s plan focused on creating an environment in which the free-market thrives, Schwarzenegger’s plan seems determined to expand government authority, create a vast new bureaucracy, and punish doctors and other businesses. Unfortunately, there’s little reason to believe that such a plan would do anything other than reduce innovation, increase costs, drive doctors and/or other employers out of state, and ultimately leave us Californians with the same (or worse) problems we face today.

Thus we encounter one of the great dangers of healthcare “reform”: we can make things worse, much worse. To avoid such calamitous situations, conservatives should follow Governor Romney’s example and embrace a free-market approach that emphasizes personal responsibility and consumer choice. In the end, the market is our best hope to make healthcare reform a good thing for America.

We need to fix the health care system.

                                                        

The tax-code quirk and the health care mess
By Jeff Jacoby
Monday, January 29, 2007

Wading into the fraught issue of health care during his State of the Union address, President Bush noted that for most Americans, "private health insurance is the best way to meet their needs. But many Americans cannot afford a health insurance policy."

Why is health insurance so expensive? One explanation is that the extraordinary gains medical science has made over the last few decades come with hefty price tags. The revolution in cardiac care, the myriad new drugs, the invention of CAT scanners and MRIs, the ability to transplant organs -- these and so many other lifesaving medical miracles didn't come cheap. It stands to reason that insurance covering the cost of such miracles doesn't come cheap either.

But wait -- *does* it stand to reason? Information technology has exploded in recent decades too, yet computers have never been as affordable as they are now. Agriculture is far more advanced, and the quality and variety of food available to consumers far greater, than they were 50 years ago, yet the real cost of food has plummeted. The price of a primitive color television in 1954 was equal to three months' wages for an average American worker; today that worker gets a sparkling picture on a 25-inch screen for just three days of work.

"Why is it," asks David Gratzer, a physician and scholar at the Manhattan Institute, "that in every other field where enormous technological strides have been made, total costs have fallen over time, but in health care they have increased?" The answer, he writes in The Cure, a lively and engrossing new book on the American health care mess, is simple: Health care costs so much because most of us pay so little for it. And we pay so little -- out-of-pocket expenses amount to just 14 cents of every health dollar spent in this country -- because a third party nearly always picks up the tab. For most working Americans, that third party is an insurance company paid by their employers. (For the poor and elderly who rely on programs such as Medicare and Medicaid, it's the government.)

Why does it matter whether Americans pay for medical care directly or let insurers cover their bills? Because thrift and price awareness usually go out the window when we're spending other people's money. Under the present setup, most Americans have little incentive to be economical consumers of health care. As a result, health care expenditures -- and insurance premiums -- have been racing ahead at three and four times the rate of inflation.

All of this is due to a quirk in tax policy dating to World War II, when employers looking for a way to enhance workers' salaries without running afoul of federal wage controls hit on the idea of providing medical benefits. When the IRS agreed not to treat such benefits as taxable income, it triggered a far-reaching change in the way Americans paid for health care.

What had been a relatively free market in medical services, with patients transacting directly with doctors and hospitals, gave way to a third-party system, in which employers paid the insurance companies, and insurance companies paid the bills. Americans increasingly used insurance to cover routine medical expenses, not just major unexpected costs like hospitalization or surgery. Imagine what automobile insurance would cost, writes Gratzer, "if people insisted on plans that had [low] deductibles . . . or policies that included not just major body work, but also oil changes and gas."

To properly disentangle this snarl, Congress ought to end the tax exclusion that causes it. Employers don't generally provide workers with homeowner's or auto insurance, or for that matter with food, clothing, or housing. Ideally, medical treatment would be handled no differently, and Americans would benefit from a far more robust and competitive healthcare market than they do now.

But after 60 years, it's probably infeasible to simply eliminate the tax deduction altogether, so the president has proposed a second-best alternative: eliminating the bias for employer-provided health insurance by giving every family with health insurance a $15,000 deduction ($7,500 for individuals) -- no matter where their insurance comes from or how little it costs. Employer-sponsored insurance would become taxable income -- but since most insurance policies cost less than $15,000, most employees would enjoy a significant tax break.

Under the Bush plan, the tax code would no longer penalize Americans who don't get health insurance through their employers, since they too would be eligible for the $15,000 tax deduction. Millions of others would have an incentive to shop around for a health plan less pricey than the one available through work, since cheaper insurance would end up meaning a bigger tax break. That would put pressure on insurers to develop more high-deductible, low-premium plans -- and on health care consumers to start paying attention to prices.

Bush's prescription won't cure everything that ails American health care. But there's no question it would make an excellent start.