health care

Promoted by Matt Moon: Bob Carroll of the Tax Foundation explains McCain's health credit better than McCain does in today's WSJ. Health care is one of those issues that the next conservative movement must provide new ideas for.

As the election hoopla crescendos, Hawaii is giving the rest of us a little preview of what health care mandates could do in the next presidency.

Barack Obama's only mandate is that all children have health insurance. Hawaii tried to accomplish this through its government, and sadly, revealed the problems.

Grace-Marie Turner, president of the Galen Institute, writes in the New York Post:

"Hawaii just had a vivid lesson in health-care economics, learning that if you offer people insurance for free - surprise, surprise - they'll quickly drop other coverage to enroll.

"As a result, Hawaii is ending the only state universal child health-care program in the country after just seven months.

"The program, called the Keiki (Child) Care Plan, was designed to provide coverage to children whose parents can't afford private insurance but who make too much to qualify for other public programs (such as Medicaid and Hawaii's State Children's Health Insurance Program). Keiki Care was free for these gap kids, except for a $7 office-visit fee.

"But then state officials found that families were dropping private coverage to enroll their children in the plan. 'People who were already able to afford health care began to stop paying for it so they could get it for free,' said Dr. Kenny Fink of Hawaii's Department of Human Services."

A lesson in human nature and government we can't soon forget.

Spent the weekend in Pennsylvania and could not escape Obama health care commericals accusing McCain of planning to impose the first ever tax on health care benefits.

Obama is running at least two commercials on this issue with white women bemoaning the threat from McCain. McCain's failure to answer this attack will be devestating.

The only fight back I saw was a Republican National Committee ad accusing Obama of b8ing a big spender. It charges Obama with wanting to spend a trillion dollars!!

Having just watched a Republican President (supported by McCain) ram through a $700 billion bail out on top of a $300 billion package the RNC ad is clearly barking up the wrong tree. No one believes McCain or any politican will cut spending.

It's important for conservatives to know where McCain stands on health care, because his policy positions are under attack. For example, do you know how to respond if someone issues this challenge: "McCain wants to tax your health benefits"?

Kudos to CBS reporter Wyatt Andrews, who dug a little deeper into Obama's No. 1 scare line about McCain's health plan. (text and video available here.)

Yes, health benefits would be taxed -- right before people are given a tax credit to offset that tax.

People who currently get health insurance through their jobs are already getting a tax break -- it's just invisible because their employers are the ones paying the insurance premiums. The average tax break for a family under the current system for job-based insurance is $4,200 per year.

McCain would offer families a $5,000 tax credit. They could keep their job-based insurance if they want, but they could also shop around -- across state lines, even, under his proposal -- for a deal that suits them.

Andrews consulted Len Burman of the Tax Policy Center, who said, "Families at all income levels would pay lower taxes, at least on average. On average, it is about a $1,200 tax cut in 2009."

While I'm still skeptical of any large strategic effect the #dontGo movement had, the energy issue overall, as well as McCain's selection of Gov. Sarah Palin, has spurred new policy messages on a wide range of economic, middle class issues. Two days ago, Congressman Eric Cantor (R-VA 7th District) spoke to the Conservative Bloggers' Briefing at the Heritage Foundation, introducing a "Middle Class Bill of Rights." The components are:

• Energy: As everybody knows by now, the rational approach is to have an "all of the above" strategy which includes production of non-renewable and renewable resources (including nuclear), as well as initiatives that increase conservation and efficiency. Cantor mentioned that the selection of Palin gives the GOP in the expertise edge of energy solutions.
• Health Care: Cantor explained that individuals worry more today than a generation ago about losing their jobs because of the subsequent loss in health care coverage. Consumer-based health care programs and the expansion of Health Savings Accounts (HSAs) are the way to proceed.
• Making Paychecks Go Further: Another way of saying "tax cuts." But Cantor also mentioned that French President Nicolas Sarkozy is proposing making overtime wages tax-exempt to fuel more productivity at the micro-level.
• Job Creation: Cantor correctly points out that the best stimulus for any economy is job creation. This means Congress has to start being concerned about competitiveness and corporate taxes. Back in January, Cantor introduced the "Middle Class Job Protection Act," which would, among other things, cut the corporate tax rate from 35% to 25%. While it is speculative to link corporate taxes to job loss/creation, the ultimate burden of corporate taxes does fall on individuals through lower wages, higher costs at goods and services, etc. (The Tax Foundation has started a campaign called CompeteUSA, showing that corporate taxes in America are increasingly out-of-line with the rest of the world.)

While I like the combination of issues and the focus on the middle class, I'm not so sure I like the branding. Middle Class Bill of Rights? I've never been a fan of economic "rights." But maybe it is this type of messaging that the Right needs for this and future elections cycles in order to successfully court the middle class. And now that McCain and Republicans are making headway on economic and energy issues, as Sean points out, Cantor is definitely headed in the right direction.

Forty-seven million uninsured. An HMO withholding approval to save a dying young woman. One in six dollars spent in America going to health care (1) (notes below), which is 4.3 times more what America spends on national defense (1). Despite that, one in four Americans saying health care is a serious national problem in 2008 (2). Not less than 81% of Americans "dissatisfied" with health care in America (3). The specter of socialism looming as 64% of Americans recently polled say it is the federal government's responsibility to make sure all Americans have health care coverage (3).

Let's not exaggerate the problem. The number of uninsured grew from 12 millon in 1989 to where it stands today mostly because of legal and illegal immigration (4), making the uninsured a one-time problem. We all know how Michael Moore gets hysterical. His last movie made much of the fact that Cuba's health care system has a lower infant mortality rate than America's, but undeniably America still leads the world in health care, with the finest hospitals, doctors, professionals, and innovations in the practice of medicine.

Yet it is clear that something must be done. If the trend keeps up, the middle class will have to make extraordinarily difficult kitchen table decisions: cut back on health insurance or food or education. Some large American companies increasingly feel at a disadvantage. They feel they have to pay for their employees' health care, when their foreign competitors do not. Obama supports "single-payer," which is a soft way of talking about socialized medicine (5). An Obama presidency coupled with a Democratic congress would likely mean the end of free market health care in America.

In these shaky times, the political tide in 2008 is dredging up a leftist economic policy. The tide is strongest in health care. Our goal must be to ride this wave to the extent we must, while steering the country into the safe cove of market economics. The free market will not stay free without a fight.

Socialism does not work. I speak as an ex-socialist. It took me years to shake off the blinders and see the light. Socialism could only work if human beings were infinitely flexible, so that if you could imagine it theoretically, it could work in real life. That's where socialism's problem starts. Human nature is not something we can change, as I eventually came to realize. People like to buy and sell what they want. People want to take risks. They want to own a tiny little bit of the world and have it as their own. People want to control their own destiny, and not be told what to do in every aspect of their lives. People want wealth, even just a little wealth, but socialism does not deliver the goods. Socialism has been tried. It has failed. Most dramatically, East Berliners voted with their feet, turning the monicker of "democratic socialism" into a bad joke. With the sole exception of the starvation state of North Korea, every former socialist country in the world now looks to China as their model. The China model, love it or hate it, has nothing to do with state ownership of private property. It has at its core the private ownership of property, and the freedom to buy and sell as you please. Socialism's inevitable failures are costly. Over 100 million lie dead from communist rule. There is no faster way to stifle innovation and destroy the quality of people's lives than to rip people's freedom away from them. The government must let people live their own lives. Socialism slices away human freedom, and so is unacceptable.

The experience of Britain's National Health System, with a country of rotting teeth, antiquated care, and long lines, and of Canada's national system, with the long waits for basic care and Canadians hopping the border for simple medical procedures, tells us more than we need to know.

Socialized medicine, or "single payer," would wreak an untold disaster upon the health and quality of life of Americans. Our country has led the way forward against disease, disability, and injury. Smallpox and polio are all but wiped out. The art of medicine has advanced to an unbelievable degree, with much thanks to Americans. Great institutions of American health care are renowned throughout the world: names like Sloan-Kettering, Mayo, and Johns Hopkins. Socialized medicine will take decisions out of doctors' hands, and prevent them from innovating and providing the best care. Socialism would take the art out of medicine and turn clinics and hospitals into factories. The quality of health care in America depends on patients, doctors, and nurses all being free to be at their best. Expanding government will increase taxes, hurt the economy, and take the freedom out of health care.

Take a look at the list of the Nobel Laureates in Medicine and you will see that there is one country that has dominated that famous prize, especially since World War II, and that country has a free market medical system. Of course, it is the United States of America (6). If we allow socialism to take root in America, there is no telling what damage will eventually be done to medicine and the American way of life. Even if we cast out socialized medicine after only a few years, those years will be lost, and whatever is lost will have to be rebuilt. Our institutions are so valuable and vulnerable, we can't risk throwing it all away for the pipe dream of socialism.

Our health care problem today is a case of market failure. Disease and injury being what they are, people will always need health care, and they won't be in a position to bargain much over the price. The markets for health insurance and health care have broken down. Health care costs have spiraled out of control, and are heading north. The price of health care has grown disproportionately to the quality of care. We must find a way forward to uphold our free market system, resolve this market failure, and keep America great.

This blog will focus exclusively on health care policy. It will argue for a market-oriented approach to health care reform. Free market basics will be stressed like being able to choose whatever doctor you would like no matter what your insurance is, and being able to get health insurance for your family at a decent price. Common sense also matters. Health insurance companies are private companies. They need to have the incentive to minimize costs while maximizing the health and well-being of their insurance customers.

The pressure to adopt socialized medicine is already large, and will grow larger. Obama has hinged his campaign on a promise he can't keep: he says will make our health care system perfect. Americans just might be desperate enough to believe he has a miracle under his sleeve. The trouble is, people don't understand why he is wrong. The voters don't understand the most basic principles of economics: scarcity, and the law of supply and demand. 

McCain must have a savvy response to the health care crisis. The first part of the response is that Republicans care about health care, deeply want all Americans to have access to good health care, and will work hard to achieve that. This is emotional, and comes out of human compassion. The second part of the response is a smart, market-oriented policy to get us there. That's where this blog comes in.

Thank you to TheNextRight.com for the opportunity to start this blog. I am taking the name of Xenophon here to honor that figure who is associated with a long and successful struggle to survive against great odds.

(1) http://www.nchc.org/facts/coverage.shtml

(2) http://www.health08.org/polls.cfm

(3) http://www.gallup.com/poll/4708/Healthcare-System.aspx

(4) http://www.cis.org/articles/2005/back1405.html

(5) http://blogs.wsj.com/washwire/2008/08/19/obama-touts-single-payer-system/

(6) http://en.wikipedia.org/wiki/Nobel_Prize_in_Physiology_or_Medicine

Ryan Ellis is the Tax Policy Director at Americans for Tax Reform

The liberals are setting us up for a tax increase, and they’re using health care to do it.  They want to double federal taxes as a percent of the economy from roughly 20% today to 40% over the next half-century.  Most of these new taxes would go toward socialized medicine.

That’s their game plan—what’s ours? 

Let’s start with principles, and move toward policy goals.

Principle 1: Conservative health care reform should neither raise taxes nor increase the size of government.  You’d think this would be a no-brainer, but trust me that it isn’t.

Principle 2: Health insurance should have nothing to do with your job unless you want it to.  In any event, health insurance should be 100% portable.

Principle 3: Shopping for health care should look more like currently shopping for prescription drugs, dental, vision, and cosmetic surgery, and less like going to the hospital or getting a checkup.  The former is price transparent and market-responsive.  The latter is bureaucratic and doesn’t work

So what’s in the conservative package?  Thankfully, someone has already put that together—the Health Care Freedom Coalition (full disclosure—ATR is a charter member).

This is quite literally the free market package of health care reforms.  It doesn’t raise taxes—it cuts them.  It doesn’t grow the size of government—it shrinks it.  It doesn’t curtail the consumer—it liberates him.  If this plan were passed, the size of government wouldn’t just stay at 20% of GDP—it would shrink to 10% over time.

So here’s the question: what do you think of the policy list?  Anything missing?  Anything which should be tossed?  Anything need tweaking?  Unless we get positively engaged in the details of the healthcare debate, the Left (who knows this stuff far better than most of us) will eat our lunch.

Paul Krugman makes an argument that we're going to see again and again in the health care debate...

The politics of guaranteed care are also easy, at least in one sense: if the Democrats do manage to establish a system of universal coverage, the nation will love it.

I know that’s not what everyone says; some pundits claim that the United States has a uniquely individualistic culture, and that Americans won’t accept any system that makes health care a collective responsibility. Those who say this, however, seem to forget that we already have a program — you may have heard of it — called Medicare. It’s a program that collects money from every worker’s paycheck and uses it to pay the medical bills of everyone 65 and older. And it’s immensely popular.

I suspect this argument isn't entirely wrong.  OECD countries who have universal health care generally do like their health care systems.  And since we're dealing with taking away some of the visible, tangible costs from consumers and replacing them with less visible secondary costs or moving them into the unseen future, it's not at all implausible that the public would like it.

After all, we are not choosing between government-managed health care and free market health care, but between government-managed health care and...a different form of government-managed health care.  The Right would  love to defend free markets in health care for various good philosophical and economics reasons.  Instead, we end up defending the status quo, which has rather less to recommend it.  That's not a good place for us.

However, there are three problems with what Krugman claims about Medicare being "immensely popular"...

1. The recipients of Medicare get it, basically, for free.  Since they're not paying for it at the point of purchase, it's not surprising that they think it's quite a nice thing.
2. Indeed, a lot of the real costs of Medicare lie in the future.  And they are enormous.   The costs are being hidden for now, while voters mostly approve of the more tangible benefits.   Should voters ever have a chance to make a real cost/benefit trade-off, we'll see just how much they actually value it.  
3. But, you might argue, polls show that 76% of Americans approve of Medicare.  And so they do.  But look what else those polls show about public approval of Medicare...

Rating the Performance of Nine Government Services

Q: "How would you rate each of the following government programs and services?"

October 2005 results

Base: All Adults

73% of adults rate the performance of Medicare negatively.  That's a remarkable number.

Of course, Paul Krugman and the Left have a remedy for that.   It involves astronomical increases in your taxes.  In 2005, Paul Krugman said the US "should be getting 28% of GDP [gross domestic product] in revenue. We are only collecting 17%."

That's around a 50% increase in taxes.  How will the public like that part of the equation? 

[Promoted - Conn Carroll shows just how wasteful and perverse goverment health care spending is; the eventual fiscal crisis from this will dwarf anything we've seen before - Jon Henke]

The exploding costs of Medicare are already killing the future of this country. If current trends continue, Social Security and Medicare spending will jump from 7.5% of GDP today to 13% by 2030. The Democrats solution to this problem: Medicare for all. The left actually believes they can control sky rocketing medical costs through government control of the health care industry. They are truly blinded by their love for big government.

Just look at the battle on Capitol Hill this week over Medicare. In 2003, conservatives passed a law requiring HHS to use completive bidding when purchasing medical equipment instead of using the price controlled fee schedule they do now. Under the current system, in some parts of the country taxpayers are paying $1,825 for a hospital bed anyone else can buy online for $754. If HHS went to competitive bidding they could save $1 billion a year annually.

So who could be against such a common sense move? Democrats. Sen. Max Baucus (D-MT) introduced a bill that would delay the implementation of competitive bidding for another 18 months. The reason? He doesn't want to hurt the businesses that currently make profits by overcharging US taxpayers.

And that is why government will never be able to reduce health care costs. Politicians are incapable of turning off the federal spending spigot when their constituents could be harmed. The better solution for controlling health care costs is a conservative pro-market  approach like consumer-driven health care.

Open Left's Chris Bowers provides some insight into the progressive's perception of the likely Democratic agenda for 2009...

In our attempts to build a large Democratic trifecta in Washington, D.C., what, exactly, are we fighting for? To answer that question, here is a comprehensive list of legislation that is certain to pass if Obama wins the White House, we pick up 20 more seats in the House, and 8 more seats in the Senate...

You can find the full list at his post.  Suffice it to say, from legislation that puts a thumb on the scale for Labor Unions to government price controls for health care to massive regulatory expansion, there's something there to worry everybody.....including elements of the Democratic coalition. 

But this point from Bowers should raise the most concern.

The most exciting bits are the positive, progressive feedback loops around increasing unionization (the employee free choice act) and election reform (D.C. voting rights, verified paper trails). These are laws that will make the country itself more progressive, thus building a progressive majority down the road. If we can get more of these, including sweeping media reform (about which we should be optimistic), real immigration reform, (about which I am not optimistic) and the progressive budget (which might just happen by 2011, if all goes well), then we will be on our way to a progressive majority in America that will last for an entire generation.

Policies that redistribute the media to liberal interests, make the public more dependent on liberal institutions and give the government more largesse to distribute to the public.  Policies that entrench Democratic power.

That's the agenda. 

If you have liberal friends, by now you've probably gotten this video emailed to you.

In it, a professional actor playing the role of a doctor explains his reason for voting Republican: "I don't want a cure for AIDS or breast cancer."

The liner notes helpfully explain:

The Bush administration has been more interested in promoting AIDS treatment in Africa (for the benefit of American pharmaceutical companies) than in assisting American citizens who have AIDS.  The administration has also withheld money from organizations in Africa that distribute condoms in attempts to control the spread of HIV/AIDS.

Because treating AIDS in Africa couldn't possibly be important or anything. An estimated 22.5 million people are HIV positive in Sub-Saharan Africa, and nearly 100 times more people died of AIDS-related illnesses in Africa than died in North America last year.