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You Will Lose Your Private Health Insurance

By Robert Tracinski

Before Thanksgiving, the Senate voted to opening debate on President Obama's health-care bill, and that debate has begun in earnest this week.

Well, if they want a debate, let's let them have it. But let's not get distracted by the sideshows Senate Majority Leader Harry Reid has planned for us.

Forget about abortion. Of course the left will accept restrictions on funding for abortion, because they want to keep moderate Democrats on board for the goal they know is really important: giving the government a dominant role in health care. Everything else is just details, and funding for abortions is an issue to which the left can return at leisure later on-once government is firmly in charge of everything.

And don't bother debating the "public option," either, because it's already dead; enough Democratic senators have come out against it. But Harry Reid is all too happy to have a debate over the public option so he can make a show of "compromising" and giving it up. And while we're having that fake debate, he's hoping that we won't be challenging everything else in the bill.

So let's get straight what the real essentials of the bill are-and how disastrous they are.

Three provisions constitute the vicious heart of the Democrats' health-care overhaul.

The first is "guaranteed issue" and "community rating." This is the requirement that insurance companies have to offer coverage to people who are already sick, and that they be limited in their ability to charge higher rates for customer who pose a higher risk. The extra expense to the insurance companies of covering people with pre-existing conditions will get passed on to existing customers in the form of higher premiums. But why spend years paying these inflated premiums for insurance you're not using, when you can get exactly the same benefits by waiting until you actually fall ill? The obvious result is that million of people, especially healthy young people, will quickly realize that there is no reason to buy health insurance until they get sick.

Rather than increasing the number of insured by making health insurance more affordable, this bill makes health insurance more expensive and increases the incentive to simply drop your insurance until you need someone to pay for your medical bills. It is an attempt to turn health insurance into what the left really wants: another welfare program in which everyone is entitled to free benefits, mandated by the government. But this would wreck private health insurance, making the whole industrial financially unsustainable.

Following the usual pattern of government intervention, the health-care bill offers another intervention as the solution for the problem created by the first. The "individual mandate" requires everyone to buy health insurance and subjects us to a tax if we fail to do so. But this is an especially onerous new tax, the first tax not tied to any kind of income or activity. It's not a tax on stock-market profits, say, or a tax on buying cigarettes. It's just a tax for existing.

So fearing a public backlash, Congress didn't have the guts to make this new tax very large-only $750. Yet actual insurance can cost more than $3,000 per year-and as we shall see, this legislation goes out of its way to drive up those rates by mandating more lavish coverage. So we end up getting the worst of both worlds. This provision won't actually drive anyone to buy health insurance and prop up the risk pools for those who are insured. All it will accomplish is to create a brand new form of tax.

But the biggest power-grab in the bill is the government takeover of the entire market for health insurance. The bill requires all new policies to be sold on a government-controlled exchange run by a commissioner who is empowered to dictate what kinds of insurance policies can be offered, what they must cover, and what they can charge.

Right now, your best option for reducing the cost of your health insurance is to buy a policy with a high deductible, which leaves you to pay for routine checkups and minor injuries (preferably from savings held in a tax-free Health Savings Account) but which covers your needs in catastrophic circumstances-a bad car accident, say, or expensive treatment for cancer. This is the kind of coverage I have.

But the health-insurance exchange is intended to eliminate precisely this kind of low-cost catastrophic coverage. Its purpose is to force health-insurance companies to offer comprehensive coverage that pays for all of your routine bills-which in turn comes at a higher price. So under the guise of making health insurance more affordable, this bill will restrict your menu of choices to include only the most expensive options.

So there we have the real essence of this bill. It restricts our choice of which insurance to buy and pushes us into more expensive plans. At the same time, it destroys the economic incentive to purchase insurance in the first place and replaces insurance with a free-floating tax on one's very existence.

By all means, let's debate some of that in the Senate.

When you understand what this bill does, you can see why the Democrats would be happy to compromise and drop the public option-for now. This bill so comprehensively wrecks private health insurance that pretty soon a "public option" will seem like the only alternative, and they will already have put into place one of the new taxes needed to pay for it. If the left's goal is to impose socialized medicine in America, this bill does it in the most callous and destructive way possible. It smashes private health care-then leaves us stranded in the rubble, at which point we will be expected to come crawling back to the same people who caused the disaster and ask them to save us.

That is the final and perhaps most compelling reason to kill this bill: the sheer arrogance of the whole enterprise. It is the arrogance of stampeding an unwilling public toward a monstrous 2,000-page piece of legislation while admitting that it still has huge problems, but promising that it will all somehow be fixed later on. It's the arrogance of selling us a bill that expands government spending by hundreds of billions of dollars while telling us that it will reduce the deficit. It is the sheer unmitigated gall of appointing a bureaucrat to run a government-controlled insurance market that takes away all of our health choices-and then calling this bureaucrat the Health Choices Commissioner.

That's the kind of government arrogance that has to be smacked down hard, and that alone is reason to demand that your senator reject this vicious bill in its entirety.

Robert Tracinski writes daily commentary at TIADaily.com. He is the editor of The Intellectual Activist and TIADaily.com.

Helen PR:

I hope that you can provide the link for this post. We need to be careful of attribution of things posted here because of copyright laws. Please provide the link to this material. In the future, please link things you find on the net.

Thanks,

BOB
Moderator

The link to the website is at the bottom of the article and Robert Tracinski wants wide distribution of his writings. You can also go to http://www.intellectualactivist.com/php-bin/news/showArticle.php?id=1168

In short, the Democrats are on an all out assault on private health care, regardless of the damage it will do to this country in financial terms or politically to the Democratic Party.

Sadly, they, The Democrats, will likely get their way. On the bright side, there won't be many Democrats left in the house after Nov 2010. Unfortunately, we will be stuck with higher taxes, higher medical costs, and a boondoggle of beauracracy created by the vanishing Democrats.

Helen,

In future, it would be best to provide a short excerpt and a link. As Bob noted, copyright is an issue. While the author may want wide distribution of his writings, in reviewing the page to which you linked, I note that his material is under copyright.

Many years,

Neil

Steve:

Some of the things in the bill are to be phased in over four years. If it is really possible that the people wull sweep out the current majority, then it seems that the need for the opposition is to begin to campaign now on the platform of complete repeal. Did anyone ever think of that? A simple bill that says that the current legislation is completely repealed and all government agencies created by it abolished.

BOB

It has to fail now, not after it is enacted. Laws very rarely are repealed.

Ray

Let's all pray the democrats are successful in their endeavor.

Job,

The current 'health care reform' proposal before Congress will gut health care for the elderly and poor, cutting funds for both Medicare and Medicaid (read the bill to see for yourself). President Obama has said that the elderly should not expect full health care but only pain medication. I believe this is immoral. Why do you support it? Why do you hate the elderly?

Helen

LOL!!!! (trying to be polite at such an absurd statement) I can only assume that is meant as a joke...

I doubt it was meant as a joke, unfortunately.

It's a serious question. The Democrat Health Care "Reform" cuts spending for Medicaid and Medicare by half. If you support it then you think the elderly and poor deserve to have their health care cut by half - which means rationing. Why do you think they should receive less health care?

It's not a laughing matter. But it does suggest that neither you nor Erie Byz have a clue as to what is actually in the bill.

Helen PR:


That's probably because so few people know the economic difference between cost and price. A very good analysis of that question was developed in our newspaper in the past few weeks.

The cost of a service is what it takes in terms of someone's time, experience, effort, and education to produce or provide a good or service. There is nothing that can control the real cost. It is what it is. If the actual cost cannot be recovered by the economic price charged, one of two things will happen. Either the provider will cut corners or he will withdraw his services. The first outcome is what happens when foreign doctors with education less than that given in this country step in to take the place of our own doctors--see the problems in the UK. The second is what happens when there are less doctors willing to continue to practice and the remainder will only take so many patients, giving the econmoic outcome of rationing.

Price can be manipulated by the market or by politicians, but price has little relationship to cost unless the market is left to its own devices.

The rhetoric about controlling costs is just that--it's an attempt to control what cannot be controlled except at the economic cost of making scarce what the market would allow to be produced to the level of demand. Sadly there are too many people who enter this whole area who have little understanding of this very basic and all-important difference.

Another point to be made is that this whole discussion is NOT about "healthcare." It's about "health payment." It's about who will pay for health procedures and how people will be charged for it. We seem to have forgotten the principles enunciated during the Reagan years that let people understand that there is no free lunch and that people would have to pay for things themselves. By shifting costs from a person receiving procedures to others, we have the principle underlying insurance. But by forcing people into a program with the threat of fines, one has the beginning of nothing more than an attempt to control people in a fashion that undermines their dignity as human beings, as understood in our foundational documents. That is a real concern. If it were as simple as allowing people to participate at an economic level that they could afford, that would be one thing, but the bill does not really provide for that. In addition, by forcing the abortion issue into it, it shows that the real intent is to control and end the real debate about this very real evil.

BOB

Bob, this quote above stood out to me...just curious, what do you think about eliminating the pre-existing conditions clause? If pre-existing conditions became excluded...we would have the sick only picking up insurance when they need it...and dropping it when they are healthy knowing they could pick it up when they need it...which would not be good on the system...

The Democrat "Reform" starts off charging all Americans a price for just existing. That's the first time, ever. Nothing in the Constitution about that.

The "fine" starts at under $1,000 for individuals who do not have health insurance (but rises in later years). At the $1,000 value it is cheaper for Americans to pay the fine and not get health insurance and then buy it whenever you need it (not that it will cover what is needed).

The latest gimmick is the Medicare for all those over 55 to 'replace' the public option. It will cost $1,000 a month according to the local paper ($1,500 a month for couples). And these are just the direct payments.

And still the death panels will decide what coverage you will get if you get really sick. You won't get the latest cancer drug if it is expensive, that's for sure.