President Obama's new budget dedicates $634 billion over the next 10 years to what he calls health reform. He promises - or perhaps threatens - that this vast sum will be a down payment for universal coverage, which could require more than $1 trillion.Agreed.
Unfortunately, the president intends to spend all this money on the basis of several pernicious myths common in the health-care debate. As a result, his reforms would ultimately hand the health-care system over to the government and lead to rationing.
The president's budget repeats the popular claim that 45.7 million Americans are uninsured. The figure is taken as proof positive that the current system is failing - and that the government must step in to provide a remedy.
But that misleading number includes millions we can hardly call uninsured. About 18 million of the uninsured make more $50,000 a year - and almost 10 million have yearly incomes over $75,000. More than 10 million aren't US citizens. And as many as 14 million are already eligible for government programs like Medicare, Medicaid and SCHIP - but haven't signed up.
For most folks, health insurance is simply too expensive. And ramping up funding for government health programs, as Obama proposes, won't make insurance cheaper. In fact, it could cause private insurance to become more expensive.
After all, the feds reimburse hospitals and doctors at below-market rates for Medicare and Medicaid patients. So those of us with private health plans have to pay more to fill the gap - and that hidden tax is about 10 percent. In California, for example, private payers paid an extra $45 billion to compensate for unpaid Medicare costs in 2004.
Obama's budget also takes aim at prescription-drug costs by forcing manufacturers to give Medicaid a bigger discount, probably 20 percent, on brand-name drug purchases (it already gets a 15 percent break). That might help curb Medicaid's expenses, but it will raise drug prices for everyone else, who will have to make up the difference.
Taken as a whole, Obama's health plan is predicated upon the misguided notion that government can deliver care more efficiently than the private sector. There's ample evidence to the contrary.
Wednesday, March 04, 2009
Health Care Mess to Come
Sally Pipes has a good analysis in Monday's New York Post: