Heritage Foundation Launches Heritage Action
Health Care Reform Compromise is Nearly Impossible
People often accuse libertarians of being radical idealogues, of abstracting a generally appropriate principle of freedom to unacceptable extremes. Hayek complained in the Road to Serfdom that, “Probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all the principle of laissez faire.” Practical, reasonable people will shy away from extremes. But often there is no middle ground between defending ones principles and abandoning them completely
This, I suggest, is what many people discover when they try to compromise in health care policy. The Patient Protection and Affordable Care Act, otherwise known as “Obamacare” contains 5 important provisions
- Subsidies for the poor
- An individual mandate to buy insurance
- Community Rating for premiums
- Guaranteed Issue of insurance
- The pre-existing conditions fix
To many practical, reasonable people, this program all together looks like a serious government invasion of the health care sector. The individual mandate is an obvious affront to freedom and subsidies may seem to unjustly redistribute wealth. But many people would like to compromise and pick the most carefully targeted of the five previous reforms. They will likely pick the pre-existing conditions fix.
Insurers usually refuse to cover illnesses that began before a person purchased his insurance – so called pre-existing conditions. This creates a serious problem for the uninsured sick. Many illnesses, such as cancer, require extremely expensive treatment. Most people cannot pay for treatment on their own, and if they are not treated, the illness will kill them. The fix, forcing insurers to cover pre-existing conditions, seems like a narrowly targeted reform that will help the neediest people without significantly infringing on the liberties of others.
But once insurers are forced to cover pre-existing conditions they will change their behavior. Instead of selling sick people insurance only for future illnesses, they will refuse to sell them insurance at all. So a reasonable legislator trying to pass a targeted fix must pass a second reform – Guaranteed Issue. This reform forces insurers to “guarantee” that they will offer to sell insurance to anyone who asks for it.
This still does not fix the problem. Insurers may simply offer sick people insurance at premiums they can’t afford – say, $10 million dollars a year. If legislators are unwilling to allow the uninsured sick to simply remain uninsured, they must lower prices. So they must support community rating, which forces insurers to sell insurance to all comers at the same price.
Now, legislators have passed drastic reforms that will affect all people – this is not merely targeted legislation affecting only the uninsured sick. But they still cannot stop here. There is a new problem that must be solved. If the community rating is passed, healthy people know they will be able to purchase insurance at the average rate of the insurance. They will drop out of the market, and only sick people will remain. The price of insurance will rise.
To prevent people from “gaming the system” legislators must pass the individual mandate – which forces the healthy back into the market with everyone else. Although each of the previous reforms limited freedom, an individual mandate does so in a much more conspicuous way. And it isn’t the end.
If you order people to buy insurance, you must decide how to treat the poor. It is unreasonable to order people with no income to pay premiums of thousands of dollars a year. The health care of poor people must be paid for, either by programs like Medicaid, or by subsidies of private insurance purchases.
The reasonable person who insists on helping the uninsured sick finds himself forced to embrace the whole set of reforms. This has been hard to understand for people as highly placed as Barack Obama, who attacked Hillary Clinton for including an individual mandate in her health care plan in the Presidential primary campaign before adopting it himself. It was probably hard to understand for Mitt Romney and The Heritage Foundation when they tried to craft a middle ground in Massachusetts and ended up with a nearly identical bill. And it may still be hard for Republicans to understand, some of whom have already promised not to overturn the pre-existing conditions fix, and I predict therefore, will not – and cannot – overturn any of the legislation. Sometimes, there is no middle ground, and compromise is more harmful than a radical defense of principle in extreme circumstances.
Reid’s Bill Could be the End of Private Insurance
The following was originally published and is the sole property of FrumForum.com
The left blogosphere is denouncing Obamacare as a triumph for private insurers. But Robert Book of the Heritage Foundation argues that it is much more plausible the operations of the plan will extinguish the private insurance industry.
The Senate bill would force private plans to spend a minimum amount on paying medical claims and tax excessive premiums.? The tax on those premiums however would not count towards the limits.
As Robert Book explains:
It would be very easy for regulators to become to develop a plan ?with a minimum benefit package that is high enough (say, above $8972 in average claims) that makes it literally impossible for health plans to break even, let alone make a profit.
Sam K. Theodosopoulos is the Editor of the GW YAF Blog.
Krauthammer: Historic Day Dems Will Regret
Health Care Officially Passes Senate
It passed on a party-line vote, too. However, do not despair yet:
1. The White House is outright lying about President Obama’s campaigning on the public option. Desperation?
2. According to Politico, the White House is admitting negotiations over the bill may go past the State of the Union address in late January or very early February. Given that there have been multiple passed deadlines already, and primary season hits full stride in May, will vulnerable Democrats like Senator Blanche Lincoln (D-AR) be willing to pass this monstrosity in the final vote? Their constituents will be (and are) paying attention, and 2010 is going to be a Republican year anyway, so conservative Democrats are going to continue to be very careful.
3. Democrats in the House have felt ignored and trampled for much of the health care debate, and The Heritage Foundation has compiled a number of issues the House and Senate will have to overcome to get a final bill passed. Question: will the House be willing to cave? That verdict is uncertain.
4. Politically influential conservatives, liberals and moderates are against the Senate bill. Polls show Americans are increasingly against the so-called “ObamaCare” version of health care reform. Again, will vulnerable Democrats risk voting for the bill?
5. The designed-to-be-a-pain federal legislation process is in America’s favor.
It’s Christmas- let’s enjoy the day, thank God for sending us His son and enjoy our time with family and friends. Let’s also pray for the guidance and ability to prevent this bill from gravely harming Americans by not letting it pass.
