Overreaching on health care reform

America does not face a healthcare crisis. America faces a manageable challenge: how to help a relatively small share of the population purchase health insurance. ObamaCare is too big a solution chasing too small a problem — like hunting quail with a howitzer.

Rather than endorse such big-government overkill, pro-freedom members of Congress should promote a simple concept: Let every American own and control an individual health insurance policy that can be transported among jobs, self-employment, graduate school, and life’s other twists and turns.

ObamaCare is propelled by the oft-repeated Census Bureau statistic that 45.7 million Americans lack health insurance. Even if that number were accurate, why should Washington turn the healthcare industry upside down for all 300 million Americans in order to help 45.7 million? In fact, as Pacific Research Institute president Sally Pipes demonstrates, public policy should concentrate on a far smaller group of hard cases.

From those 45.7 million uninsured, subtract 17.5 million who earn more than $50,000 annually. Though they can afford coverage, they evidently have other priorities. Of the remaining 28.2 million uninsured, some 14 million are eligible for, yet have not enrolled in, the Medicaid and S-CHIP programs. Meanwhile, as many as 10 million uninsured may be illegal aliens. All told, Pipes estimates that only about 8 million Americans are uninsured due to chronic illness or working-poor status. The latter have incomes too high for assistance and too low for insurance.

Why not help these 8 million rather than overturn medicine for all 300 million of us?

There is no need for a gargantuan health plan that spends $1.5 trillion — as the Congressional Budget Office estimates House Democrats want — nor for the 29 new federal boards, panels, and agencies that Senate Democrats envision. As for creating a "government option" for health insurance, why not create a government option for grocery stores and clothing shops, lest famine and nudity erupt across the land?

What Americans need is a thriving market in individually owned and controlled health insurance plans. When you book an airline flight, PriceLine.com does not ask, "What is your group number?" You decide when and where to fly, and then buy your ticket. At least with personal travel, your boss does not fund this. The same is true for car insurance, home insurance, and often life insurance. Why must Americans shop for health insurance at work, rather than online or through independent agents?

Healthcare reform should give Americans the option of using money tax-free to purchase whatever kinds of health insurance make them happy. If employers offer such plans, lovely. If not, individuals should be encouraged, through tax-free Health Savings Accounts, to buy their own policies and maintain them throughout their careers. This dramatically would reduce the tragedy of "job lock," whereby employees put up with bosses and duties they cannot stand, merely to keep employer-furnished health coverage.

As Rep. John Shadegg (R — Ariz.) has argued, Americans also should be free to buy health plans across state lines. Today, such policies usually must be purchased within consumers’ own respective states, subject to state-level insurance regulations. If New York residents may arrange home loans through Illinois-based banks, for example, why are we only allowed to buy health plans through insurers who operate in the Empire State?

Republicans and thinking Democrats should oppose ObamaCare and the new playground it builds for bureaucrats. Moreover, Americans for Tax Reform calculates that the House bill’s surtaxes create a 25-percent top capital-gains-tax rate and a 45-percent top income-tax rate. That is exactly the wrong prescription for an economy already wheezing beneath the weight of taxes, mandates, staggering federal debt, runaway expenditures, and nationalization.

ObamaCare’s foes should take this sad song and make it better. Selling the core conservative messages of ownership, choice, and patient freedom is the best way to defeat ObamaCare and lay the foundation for real reforms that will make American medicine healthier, not sicker.

(Deroy Murdock is a columnist and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University. E-mail him at deroy.Murdock(at)gmail.com)


  1. mikeoliphant

    The House Health Care Bill, 1,018-page document, released this week (July 14th, 2009) reveals some concerns as noted by http://www.benefitsmanager.net and http://www.dentalinsuranceutah.net. Mike Oliphant serves as health care consultant with these two popular websites in Utah. He also is a serving board member with Utah Association of Health Underwriters. A provision within this bill would indeed outlaw individual private coverage. Under the Orwellian header of “Protecting The Choice To Keep Current Coverage,” the “Limitation On New Enrollment” section of the bill clearly states:

    “Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day” of the year the legislation becomes law.
    This translates into those who currently have private individual coverage won’t be able to change it. It is likely that those same people will suffer abnormally high rate increases over time which would force them out of coverage. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.
    From the beginning, http://www.benefitsmanager.net and http://www.dentalinsuranceutah.net warned that if the government gets into the business of offering subsidized health insurance coverage, the private insurance market will wither. Drawn by a public option that will be 30% to 40% cheaper than their current premiums because taxpayers will be funding it, employers will gladly scrap their private plans and go with Washington’s coverage. The nonpartisan Lewin Group estimated in April that 120 million or more Americans could lose their group coverage at work and end up in such a program. That would leave private carriers with 50 million or fewer customers. This could cause the market to, as Lewin Vice President John Sheils put it, “fizzle out altogether.”
    What wasn’t known until now is that the bill itself will kill the market for private individual coverage by not letting any new policies be written after the public option becomes law. The legislation is also likely to finish off health savings accounts, a goal that Democrats have had for years. They want to crush that alternative because nothing gives individuals more control over their medical care, and the government less, than HSAs. With HSAs out of the way, a key obstacle to the left’s expansion of the welfare state will be removed.
    http://www.SelectHealth.biz states that the public option won’t be an option for many, but rather a mandate for buying government care. A free people should be outraged at this advance of soft tyranny. Washington does not have the constitutional or moral authority to outlaw private markets in which parties voluntarily participate. It shouldn’t be killing business opportunities, or limiting choices, or legislating major changes in Americans’ lives.

  2. pondering_it_all

    Completely wrong AND misleading too!

    What Mr. Murdock never mentions is the simple fact that an Individual Health Policy that can be cancelled as soon as you make a claim IS NOT INSURANCE: It is a con game.

    And that’s exactly what the insurance companies would like to sell you (as long as you and your extended family have never been sick).

    Conservatives love a system in which the insurance companies can charge whatever they like for a policy, refuse to issue some policies, cancel existing policies, and even rescind policies after collecting premiums for years because you forgot to list that tonsillectomy from when you were six years old on their application. That’s their idea of a “Free Market”. But that isn’t how insurance is supposed to work.

    Insurance is a means to spread risk across a large pool of individuals, so that each can avoid a catastrophic loss. If we let insurance companies cherry-pick their customers and then cancel or charge astronomical rates for some customers, then the risk is not being spread. Instead, the insurance company is cutting out ALL their risk so customers end up paying premiums and never getting anything back.

    A public health insurance option will take on all customers and won’t refuse to cover any pre-existing conditions, so you won’t have to worry about health-care-cost bankruptcy (the most common reason). And that is why the health insurance companies are quaking in their boots. Their gigantic con game will end, and their schills will be out of a job.

  3. almandine

    You don’t get it, do you? It’s not about Murdock. Read the link above. The House Bill ELIMINATES any ability to sign up for anything other than public insurance as soon as the bill becomes law. Everybody WILL be on the public plan at some future date. THAT is the point in time that healthCARE will have been reformed… less and less of it… when all that is really needed is insurance reform. Oops, there goes the baby with the bathwater.

  4. oceanika

    “Read the link above”: WorldNetDaily?! WND is well known for being factually challenged.

    If you want information that is part hysteria, part sloppy reporting and completely blinded by bias, then WND is the place to go.

  5. Nogood

    When a retired couple pays over $6000 just for health insurance, there is a big, big problem!

    Medicare Supplement=$3600
    Drug Ins. $500(Which is one of the biggest con game ever pulled on senior citizens. Damn Bush!)

    No dental or vision coverage at all.

    I am not the smartest kid on the block, but I know a problem when I see one and this country has a huge health care problem. Maybe $6000 is “chicken feed” to some, but to a poor man it represents a big portion of my income.

  6. almandine

    You’re right – it ain’t chicken feed – but the issue is cost, not care. Quality of care will become the problem when all the private entities have been run out of business.

  7. Nogood

    “but the issue is cost, not care”

    How true. The Republicans would like for all of us to die when we reach 65 or even when a young person becomes ill with a costly illness.


  8. almandine

    Unfortunately, that same line will be used by the Dems when it all becomes clear that taxes alone won’t pay for healthcare for all of us. The alternative a couple of years from today will be, “well, sir I’ve scheduled your cat scan for next March 10th… uh, no, we don’t use the preferred MRI for that anymore.” Farking screwed at new heights, we’re about to be.

  9. oceanika

    Big agri-business crushes familiy farmers. Big banks and financial orgs, crush the small competitors. Big insurance companies crush little insurance companies.

    Big businesses can (and do) have laws changed to give them the advantage. Big businesses use their size to lock up suppliers so little businesses can’t get materials and services. Big businesses spend millions for lawyers to bully and bankrupt competitors.

    Businesses run businesses out of business all the time. Why no outcry, why no gnashing of teeth?

    If for-profit (so-called) health care providers are “run out of business” by a bigger competitor who provides better service for less, what’s the problem? I think that’s called shopping at WalMart.

    As for quality of care: what’s so good about paying premiums for years and then getting cancelled when you file a claim? How do for-profits provide quality service when you have a pre-existing condition? They don’t. For-profits routinely refuse to pay for treatments prescribed by you doctor – you don’t need the g’ment to second guess your doc. I, who pay for insurance, had to wait for years – yes that’s right – to get needed, but not life threatening, surgery, worse than “socialized medicine.” Don’t tell me that Canadians and others have to go to the US for care; Tens of thousands of Americans go to Thailand and India for care because it’s cheaper and better even after adding in airfare and lodging – something they’ve had to do because their for-profit insurer wouldn’t cover them.

    Yes, we can only hope we don’t get the same quality of care the for-profits provide. The faster we get a single-payer system, the better.

  10. almandine

    You seem to have all the answers, so riddle me this one: If govt healthcare will be so much better and cheaper, why are they finding it necessary to outlaw new private insurance the day this becomes law?

  11. oceanika

    Thank you for your faith in me. I may not have all the answers but I try not to leap to unfounded conclusions. I did read the WND article which was based on the Investors Business Daily article which I read. I also read the relevant sections in H.R. 3200.

    IBD went gone off half-cocked and the WND jumped on the band wagon because it seemed to support their loopy bias. The section they were in such lather about didn’t seem to imply the conclusion they claimed, so I continued to search.

    Much to my surprise the voice of reason came from the Heritage Foundation of all places! http://blog.heritage.org/2009/07/16/does-the-house-plan-outlaw-private-insurance/

    The Heritage Foundation contains the following response from Instapundit reader Patrick Ying:

    “Investor’s Business Daily did not continue to read the bill to page 19. ‘Individual health insurance coverage that is not grandfathered health insurance coverage under subsection (a) may only be offered on or after the first day of Y1 as an Exchange-participating health benefits plan. ‘ It does not outlaw individual private coverage – you can still buy the plan on the Exchange where they will compete with the public option, not be replaced by it. The advantage of the Exchange, is that the coverage no longer has one of the problems of individual coverage – skyrocketing premiums should you become ill.”

    The Heritage page concludes that Mr. Ying is correct, “the House plan will not outlaw all individual health insurance”, but, because they are the Heritage Foundation, they try to slam the plan anyway claiming regulations will probably drive health insurance out of business – which is just their opinion and not necessarily a fact.

    So, you’re welcome, it was my pleasure to disabuse you of your false conclusion.

  12. erika morgan

    Having been on the dispensing end of health care; this is something I actually know something about. Government has a bad reputation for managing anything, but in the field of healthcare they have become THE GOLD STANDARD.

    It is easiest to see in the dispensing of care to the nursing home patients as there is a clear separation there of Medicare and Private Insurance. The Private Insurance area has carpeted hallways and a toilet room for each semi private room, these rooms are slightly larger and can accommodate some private furniture, a chair maybe a dresser possibly a mirror or photo. For the Medicare patients however there is a medicare auditor on site each week making sure the patient / staff ratio is upheld for all levels, housekeeping, aids and RNs. Staffing in the nursing home is a big problem because the workers are incredibly underpaid and unappreciated so on a daily basis one third are no shows; but the medicare auditor will shut the place down and send patients away if their ratio is not maintained at the prescribed level and the auditor will be there each week going over everything, so those who show up are first assigned to the medicare wing. Medicare auditors go over medication and treatment records, the see that standards of cleanliness and nutrition are dispensed according to their best practices; restrooms are sterilized before and after each use, patients get out of their room for a daily bath or shower at least, occupational and physical therapy is audited to be sure best practices and orders are followed. Private Insurers also provide audits of a sort but they are concerned with money and audit charts at payment time for charges. They are happy if tests and treatments were missed because the RN could not get time to read the Dr. order, they don’t have to pay for missed orders. When this happens and the patient degrades into medical crisis the mistake may not be corrected internally and rationally and will not have been caught until the bill is available. Instead the patient must go to the full service emergency room for a new diagnosis of a new problem.

    Just tell me under who’s program would you rather find youself or your family member?