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    Dems Health Care "Reform": The more you know, the less you like

    10/29/2009

    I’d like to bring your attention to a few interesting articles from recent days which argue strongly against the Democrats’ so-called “reform” of our health care system, particularly if you are not very old or sick:

    First, from Tyler Cowen in the New York Times, his article explaining “How an Insurance Mandate Could Leave Many Worse Off."  Not only would the proposal force people to buy something they don’t want (more on this below), but the structure of the subsidy package would actually create a disincentive for people to earn more money.

    Second, as reported in the Wall Street Journal, WellPoint, one of the nation’s largest health care insurers, has done a series of studies on the likely effect of the Democrats’ plans on health insurance premiums in the 14 states in which they operate.  (You can access all 14 reports HERE.)  The results are not pretty (for the Democrats).  In Colorado (where I live), WellPoint shows the following premium impact based on proposed “reforms".  (Note these are “before any adjustment for the increase in medical costs over time.")

     

    Younger/
    Healthy
    Average Age/
    Average Health
    Older/
    Less Healthy
    Individual 140% 52% -22%
    Small Employer 36% 9% -9%

    In other words, in order to fund a small theoretical decrease in the cost of insurance for the elderly and sick, young healthy people are going to see their health insurance costs explode.  And keep in mind that the Democrats’ plans include massive custs to Medicare funding, so the scenario for the “older” segment is far worse than even this analysis appears.

    The WellPoint studies are very detailed, showing each component of the cost increases, such as the impact of guaranteed issue, limiting the age discount, and new taxes on health insurers, medical devices, and pharmaceuticals.

    With the subsidies built into Democrats plans, people below 200% or 300% of the poverty line may avoid some of the true cost increase, but only by shoving that increase off to the rest of society.

    In other words, the Democrats’ plans are, not surprisingly, a massive transfer of wealth system from the young and relatively young who earn a decent living to the old and poor.  It has nothing whatsoever to do with controlling health care costs and will in fact make recent years’ health care inflation look like a walk in the park.

    And third, the Washington Times again brings up the issue of whether the proposed reforms, particularly a federal mandate requiring people to buy something, are constitutional.  While it’s obvious (to me) that the Founders and anyone who understands the Constitution would say such a mandate is clearly unconstitutional, I think a Supreme Court case on the issue would end up 5-4 or 6-3 one way or another.

    A particularly interesting aspect of the case would be that even the insane and destructive overbroad interpretation of the commerce clause has always been based on interstate commerce, because “regulating” (i.e. to make regular, not to make all kinds of regulations about, using the language of the time) commerce between the states was the purpose of the language.  However, health insurance is explicitly not interstate commerce; insurers are prohibited from selling policies approved in one state across a border into another state. Indeed, making health insurance interstate is one of the most important true reforms we need to make.

    The Democrats are losing the public debate over health care reform, despite what their pawns in the media would like you to belive.  However, they still have enormous majorities in both houses of Congress and enormous debts to the unions who fund their campaigns.  Therefore, it is certainly possible that legislation may pass (probably with fewer GOP votes than you could count on one hand…between both the House and the Senate).  If it does, it will spell electoral disaster for the Democrats in 2010.  And, reversing the order of impact (i.e. legislation on elections), the election results in New Jersey, New York, and Virginia next week could cause “moderate” Democrats in moderate districts to rethink any possible support for Obamalosireidcus-care.