The American Spectator

The Public Policy

Free Market Universal Care

By Peter Ferrara on 6.11.08 @ 12:08AM

Universal health care can be guaranteed to all while making government smaller rather than bigger. This arose out of the best thinking from conservative health care policy analysts as far back as the enormous debate and victory over the Hillary health care plan in 1993-1994. The public does demand a social safety net that does not let anyone suffer without essential health care. But we can provide such a safety net, indeed, a better one than exists today, while expanding and maximizing the role of the free market in health care.

But the liberal left, more socialist in America today than ever, wants to exploit the public desire for a health care safety net to adopt a massive, unnecessary expansion of big government. That is because what these New Socialists are really all about is expanding their political power through any and all means, including maximizing dependency on government.

Now a bill has been introduced in the Senate that does precisely this. It is S. 334, the Healthy Americans Act, spearheaded by Sen. Ron Wyden (D-OR). But he is not alone. The bill is truly bipartisan, with eight Republican Senators joining the Democrats as co-sponsors.

National Health Insurance

THE BILL INVOLVES a complete government takeover of health insurance, with all putatively private health plans effectively run by the Feds. It is even more radical than the new health plan Hillary proposed in her campaign this year, which left a greater scope for privately run health insurance.

The Congressional Budget Office and the Joint Tax Committee scored the proposed bill as increasing government revenues and spending by close to $1 trillion per year! A Price Waterhouse study similarly found that the bill would raise Federal taxes and spending by a bone crunching $10 trillion over the first ten years. The entire Federal budget is currently about $3 trillion per year, so you can see what a truly massive, astounding increase in Big Government this is. Indeed, this is the biggest increase ever proposed in any single bill in U.S. history, indeed, probably in world history.

The bill includes a new tax on individuals to fund health insurance premiums totaling $650 billion to $800 billion per year. For comparison, the Social Security payroll tax currently raises about $660 billion per year, with the entire Federal income tax raising about $1.2 trillion annually. On top of this is a new employer tax raising close to $400 billion per year. In the current fiscal year, the entire corporate income tax is projected to raise $345 billion.

The bill would mandate that all individuals buy health insurance through a new Federal Healthy Americans Private Health Insurance system (HAPI, though actually we won't be truly happy until the co-sponsors of this bill are all retired). The premiums for that insurance will be collected through your Federal income tax return. Those who manage to let their insurance lapse for any period will suffer a penalty equal to the monthly premiums due plus 15%.

The Federal government will also tell you what health insurance coverage you must have. In fact, you can only choose among the health plans in the new Orwellian named HAPI system. Those health plans are all required to cover abortion, among other mandated health benefits. This new system would also replace employer provided plans, so if you are HAPI with your current employer coverage, you can just forget about it.

IN MY OWN CASE, I have enjoyed coverage through a Golden Rule health savings account plan covering a male in dubious health over the age of 50 and a typical teenage male with costly sports injuries for less than $300 per month. But, of course, with the friendly Federal government here to help me, I can forget about this plan as well, and will be forced to pay far more for the wonderful new HAPI coverage. You can be sure I won't be HAPI about that. In fact, under the bill, all HSAs or MSAs would be sharply restricted or eliminated.

All health plans under the bill will be subject to guaranteed issue, which means that they must cover all applicants regardless of how sick they are when they finally decide to enroll for coverage. This allows healthy individuals to choose the least cost plans until they get sick, when they can then enroll in the highest cost plans with the broadest coverage. This is like fire insurance that you can buy after your house catches on fire.

All health plans would also be subject to community rating, which means they must charge the same premiums to everyone, from 64-year-old seniors to 23-year-old triathletes. This further encourages the gaming of the system through switching to plans with broader coverage after becoming sick.

In addition, there would no longer be any role for health insurance agents in this new HAPI system. As Hillary suggested years ago, they can all go now find other careers. But there would be a new Help Health Agency bureaucracy established in each state.

The bill would also federalize the Medicaid and SCHIP programs, as their functions would be performed by the new HAPI system as well, with additional Federal benefit supplements. The current state roles in those programs would be eliminated, except that the states would have to make continued maintenance of effort payments to the Federal government equal to what they were spending on those programs. This is the opposite of the direction those programs should go, as discussed below.

The Black Hole of Socialized Medicine

Letter to the Editor

topics:
Taxes, Health Care, Federal Budget, Social Security, Medicaid, Sports, Abortion, NATO, Medicare