Socialized Health Care on its way???
September 30th, 2008The Big Lie told by supporters of “universal” health care plans (socialist
medicine) is that it is antidote to the current, grossly unfair situation, where the
costs of providing emergency and other care to millions of uninsureds passes to you
in higher than necessary premiums. That situation certainly does exist and it is true that
you and I pay premiums calculated to cover our needs plus reimburse the the hospitals for
giving care to these uninsureds. But institutionalizing the administering of all the care and
the monies paid for the care by a government bureaucracy will do nothing to solve the
problem – some will still pay for others who won’t – but will add layers of costs and
further distance control from the patients and their doctors. Whatever savings that might
be had by forcing lower prices from drug companies, hospitals and other providers will
disappear into the new costs of federal bureaucracy. Furthermore, there’s no evidence
anywhere that government can function better than private sector, so everybody should
expect declines in quality and service, limits and delays on access, and exodus of the best
doctors. Do you really want the people who run the Post Office, the DMV, Katrina
response and recovery standing between you and the health care you need? Simple logic
and experience say no.
The Big Lie told by Obama is that a ‘universal’ system can be implemented
without forcing everyone to participate. To her credit, Hillary told the truth about this
and, to his discredit, Obama has not. The “Hillary Plan” is the more doable and likely of
any, so let’s consider it for a few minutes. When we do, we’ll find deception there too.
When you hear that Hillary is going to force everybody to buy health care (or Obama say:
almost everybody…or, at different times, ony parents of small children), it’s logical to
think that your own premiums and costs will go down. It’s a lie.
Hillary grudgingly admitted three things about her plan: one, she intended to
levy the costs on people based on their ability to pay; two, the overwhelming majority of
the uninsured can afford to pay nothing or next to nothing; so, three, this has to be
administered as a tax, mandating by law everyone’s participation and collecting it by
force if need be. In short, you and I cannot opt out and self-insure and pay as we go. The
IRS will take our “premiums” from us by force. Here’s why: the tax must be tiered just
like income taxes. So, the better you are doing financially, the more you’ll pay as a
percentage of your gross income.
Assume that some 20 million uninsureds are plugged in, with 80% unable to
afford to pay anything. In addition, everybody now paying no income tax will also be
excused from health care tax. People with low incomes and large families will be judged
unable to afford this new tax and excused from it. That means a small percentage of
taxpayers must bear the entire burden. And that burden is estimated by different experts
to range from $150-billion to $1-trillion per year. So, let’s make some assumptions just
for sake of example. If you make from $50,000.00 to $100,000.00, you’ll pay 3% of your
gross income as health care tax; $100,000.00 to $250,000.00, you’ll pay 5%; from
$250,000.00 to $500,000.00 – 7%; from $500,000.00 to $1-million – 10%, and above $1-
million – 12%. I’m not sure those percentages are high enough. I suspect they are not.
But, it means if you make $500,000.00, your health care tax for the year will be
$50,000.00. Are your current premiums $50,000.00? I doubt it. Under such a formula,
mine will increase from less than $4,000.00 a year to about $300,000.00 a year. Under
any formula, most people now paying for health care will see their costs for it RISE.
People confronted with such outrageous increases — from thousands a year to
$25,000.00, $50,000.00, $100,000.00 – would be tempted to opt out, bank the money as
self-insurance and pay as needed. At $300,000.00, I guarantee I would. But Hillary-style
plans cannot permit us to do that, because if many of us suddenly being hit with these
outrageous taxes opted out, the whole plan collapses. Funding for any sort of universal
health care has to be a tax; the $300,000.00 taken from me at IRS gunpoint in order to
pay the premiums for all the people given health care for free.
The inescapable fact is: only a teeny, tiny, miniscule number of people will
see their health care premiums decrease; those paying now, earning very low incomes
who will “drop down” to her free level. EVERYBODY ELSE, nearly everybody else will
pay a higher health care tax than they currently pay in premiums. Further, the more you
earn, the more you’ll pay. Since health care is a commodity and a service, this is akin to
saying when you go to the grocery store to buy milk, some people will get it free, people
with household incomes of $50,000.00 will pay $2.00, but people with household
incomes of $200,000.00 will pay $200.00 a gallon. Same for gasoline. And don’t put that
past the socialists.
Fact is, YOUR health care tax will be substantially higher than you currently
pay or need to pay in insurance premiums for outstanding coverage. In truth, Hillary
or, now, Obama, in promising universal health care actually propose, by far, the largest
tax increase in the history of the country. Simultaneously, the largest confiscation of
private enterprise and private property ever to occur anywhere but in communist
countries.
Insult to injury, the quality of the health care will go down, bureaucratic bullshit
multiply, just as with every other thing moved from private enterprise to government
control. If you can, you will probably go outside the government system and buy your
health care from high quality providers also outside the system – and in many cases,
outside the U.S. – even while also paying the tax.
If you happen to be a very low paid, poor person now going without health
insurance or without good health care, this might still sound good to you. After all, what
do you care what costs are piled on high income people? But that is short-sighted and
ignorant, which is understandable; there’s a reason you’re poor and staying that way, and
it’s not lack of opportunity. To enlighten you, whenever new taxes are heaped upon
people who own or control businesses – which is the majority of high income people,
they take it out of the hide of lower income people three ways: they raise prices, they
reduce or suppress wages, they cut or outsource jobs. So you might get a nice health
insurance package for free at us richy-rich folks’ expense, but then you won’t get a raise
for a decade if you keep your job at all, and you’ll find the prices of everything you buy
leaping sky-high, and since you spend all your paychecks on necessities, that combo of
wage freezes, rising unemployment and runaway inflation’ll kill you. Free health care
will be small consolation.
The only good thing that could come of this is exit by employers from the
entire mess. They should be out. People should be responsible for and paying for their
own health insurance – and required by law to have it, just as we require people to have
auto insurance to drive or mortgage insurance if borrowing money to buy homes. Right
now, in U.S. manufacturing, health insurance adds $2.38 per hour to employers’ cost,
compared with less than $1.00 all the way down to zero for foreign manufacturers,
putting American industries at extreme competitive disadvantage, and motivating
movement of manufacturing jobs offshore. According to the Institute of Medicine, a
federal advisory group, nearly 20,000 Americans die each year just because they lack
access to care that basic insurance would afford them. It would be interesting but
politically incorrect to wonder how many of those 20,000 have monthly bills for
cellphones, cable TV, second automobiles and other unnecessary luxuries that total more
than the tab for insurance. More importantly, there are tens of millions of Americans
without coverage, putting themselves and their families at risk while piling burdens on
those of us who do act responsibly. This is madness. But its fix is not more transfer of
responsibility, less private enterprise competition – after all, a problem now is lack of
policy ownership and portability and restrictions on open competition. The answer lies in
combining McCain’s tax credits plan with full and complete health insurance portability,
disconnect from the employers, open competition across state lines, and everyone
required by law to have at least basic coverage – with, of course, direct government
subsidy or Medicaire-like substitute only for those proven to be completely incapable of
paying and requiring welfare. This is a privatization plan, not a socialist plan. While
Governor of, of all places, Taxachusetts, Mitt Romney succeeded at installing a program
like this, while Governor Schwarzenegger was thwarted by the California legislature.
Some version of this FULL privatization is the only possible pathway to significant
improvement.
If anything is capable of lowering premiums, it is forcing those 20-million+ now
uninsured – which includes many who could pay but go without by choice, secure in the
knowledge hospitals won’t leave them lying in the streets – into the “pool”. But there’s
no reason whatsoever to believe government running the money pool and doing the
buying and dispensing will lower anyone’s costs or improve care; the government is
legendary for paying more for everything from toilet seats to automobiles to you-name-its
than private parties do, and getting less for the more they spend. Government is even
famous for permanently “misplacing” billions of dollars – as they’ve done with money
sent over to Iraq, money sent to New Orleans.
At its worst and most socialist, a Hillary/Obama-esque plan will create a
whole host of unintended consequences. Most insurance companies will exit the health
care business altogether, and market only life, auto, property insurances and other
financial products. They will likely, summarily cancel existent policies en-masse or go
bankrupt altogether should the government’s new health care bureaucracy attempt forcing
them to stay in the business. These companies will also be downsizing, thus eliminating
hundreds of thousands of jobs. Pharmaceutical companies confronted with new, onerous
price and profit margin controls will shut down research and development of any drugs
other than those with the widest possible consumer use. As the private sector participants
in the different aspects of health care flee or collapse, the government will find itself
forced to assume a plethora of new responsibilities for which it is ill-equipped: taking
over shuttered hospitals in small markets, providing doctors to rural areas where all have
left, funding drug research, perhaps even somehow forcing people to go to medical
schools and work for x-number of years as doctors essentially drafted into a domestic
health services army. Consumption of health care services will skyrocket once it is
organized and presented as free to all. So, having taken on a new financial burden of
monstrous, ever expanding size and deficit, the new “health care agency” will quickly be
forced to impose draconian cost control measures: eliminating coverage for chiropractic,
dental, many surgical procedures and other life extending care for elderly patients.
Contrary to the promise that government-run, socialized medicine will take
medical decision-making away from insurers and put it back into the hands of
doctors and patients, it must do exactly the opposite; put all such decisions into the
control of government-employed cost control bureaucrats charged with minimizing,
delaying or denying expensive care at every opportunity. As there is in other countries
with socialist health care, there will be long waiting times and long waiting lists. Already,
one U.S. state drowning in a sea of red ink in its state-level program has begun sending
letters to elderly patients seeking certain surgeries and transplants that they are ineligible
– but that the plan will pay for their assisted suicide. This is where we will inevitably
wind up; so-called “managed care” means “tightly managed costs” and “managed
DEATH.” (It may be significant that the chief proponents of socialist medicine are also
pro-abortion.)
Finally, burdened with all the costs of peoples’ ill health, government will be
emboldened and justified in greater and greater invasion into private lives and
interference with private business – the elimination of trans fats in restaurant foods and
smoking in public places will seem trivial compared to the much wider interference, new
laws, new law enforcement, and new unfunded mandates on state and local governments
and private companies brought on by the desperate need of government to reduce health
care costs. Employers required to provide gyms, on-site healthy meals, prohibition of all
manner of unhealthy behavior. Vending machines selling foods and drinks judged
unhealthy will be banned from workplaces; fast food restaurants forced to locate x-
number of miles away from workplaces, schools and neighborhoods (like strip clubs must
be x-miles away from churches and schools). This is NOT distant or unimaginable; the
Los Angeles city council HAS voted UNANIMOUSLY to ban opening of fast food
restaurants in certain poor neighborhoods on grounds they are worsening residents’
obesity. Internet commerce selling unhealthy items will be regulated. Sales tax
surcharges applied arbitrarily to everything judged as contributing to poor public health.
People invested in the stock market – which, thanks to 401K’s and other
retirement plans as well as the preceding 12 years of uninterrupted prosperity – risk
losing most or all of their wealth and security. Should it seem that a socialist health
care system might actually become reality, the stock values of pharmaceutical companies,
hospital chains, medical equipment manufacturers and insurance and financial service
companies will plummet. They will drag down the spiderweb of other companies
intimately connected to them, such as banks. Take a look at the effect the meltdown in
one segment of the mortgage industry is having, upstream to banks and other financial
institutions, and emanating throughout the economy – then visualize something ten times
worse. Further, stock in companies engaged in sale of unhealthy products likely to face
sales tax surcharges, corporate tax surcharges and heightened regulatory interference will
also lose value….like Coca-Cola, McDonalds, every food manufacturer, every beverage
manufacturer. The Dow might easily lose 30% to 50% of its value in a 1929-type crash
precipitated just by the apparent possibility of Hillary/Obama-advocated health care
system plans coming to fruition. To think otherwise, naïve. Investors will take the losses
they know now rather than leave their money in these businesses entirely at risk, with
eminent, total loss staring them in the face. Mountains of money will flee the market.
CEO’s, executives and entrepreneurs at the helm of countless companies
threatened directly or indirectly by these ramifications have already begun exiting and
will exit en masse; cashing out to avoid loss of their stocks’ value, diminishing earned
income to bypass onerous taxes, and avoid potential civil and even criminal liabilities for
involvement in businesses judged harmful to public health or the public good. An exodus
of leadership as foretold by Ayn Rand is a logical expectation.
Hillary knows and understands some of this. But she is a congenital and
unabashed liar quite willing to ignore the dark realities of her Santa Claus propositions.
At the very same time that everybody – Hillary included – is freely admitting the Social
Security System was a con game and unsustainable Ponzi scheme from its start and is
now functionally bankrupt, she is blithely advocating an identically unsustainable
scheme, Health Security. She is also likely ignorant of some of this, having zero practical
experience in running businesses or in real world economics. Obama, incidentally, is
even more ignorant, although his plan is slightly less radical and destructive, but also less
practical. If either of them were to get their way, the result will be a substantial new tax
on your gross earnings, with substantial punishment for your success. More likely, that
plus a fairly rapid implosion of the entire American economy, leading to a Depression
worse than 1929, and a longer, more arduous recovery.
Maybe worst of all, worse even than the financial ruin any version of these
socialized medicine schemes would certainly cause to our economy, is the simple fact
that they don’t work.
When I was in London, England in June, I read articles in their newspapers
describing the mutiny of doctors and the public against their rapidly failing socialist
health care system. A government-commissioned study of the system was released while
I was there, reported on as follows: “FAILING HOSPITALS should be closed and
REPLACED BY PRIVATELY RUN CLINICS in a radical National Health Services
shake-up…..the report calls for badly run government health services to be shut down
and replaced, to improve standards of patient care. ….failure in the NHS – clinical and
financial – is not new…..at the moment you are stuck with your provider based on your
postal code. By bringing in private companies, patients could choose their GP (general
practitioner) or hospital…” Gee, imagine that: being forced to go to the one doctor and
one hospital assigned to you by the government servicing your zip code and having no
other choices. Imagine that leading to poor quality of care! – no competition, no quality,
end of story.
We don’t need to run this experiment ourselves. Its failure is well established in
England, Canada and elsewhere. Yet advocates of socialist health care for the U.S. hold
up these other countries’ systems as shining examples, knowing they’re lying, but secure
in the knowledge that the overwhelming majority of voters never travel abroad, read
foreign newspapers, or even rea in-depth and objective news coverage in serious media
here.