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Obama and the Slacker Mandate

In his health care rally in the Philadelphia area earlier this week, President Obama touted a proposed regulation that insurance companies would have to allow children up to age 26 on their parents’ plans – i.e. a slacker mandate – designed to appeal to the college crowd.

I wonder however, if President Obama realized the Pennsylvania already has a slacker mandate (in fact, up to age 29); state lawmakers enacted it in 2008.

In testimony to both the state House and Senate Appropriations Committees in February, Pennsylvania Insurance Commissioner Joel Ario noted that very few young adults have been enrolled under the new mandate. Ario commented, as summarized by Pennsylvania Legislative Services (subscription), that:

• The cost to insure young adults on their parents’ plan was about the same as if they bought their own plan.
• “Low-risk” young adults would buy their own plan (or remain uninsured), leaving only high-risk cases looking to the slacker mandate–and insurers were naturally unwilling to give coverage to high-risk young adults as the same rates as children.
• The failure of the slacker mandate to reduce the number of uninsured is “generally symptomatic of the greater healthcare problem.”

That is pretty much what  in the Commonwealth Foundation predicted two years ago:

SB 1453 [the slacker mandate], however, ignores the primary reason why young adults often go without insurance—the high cost of coverage. This is especially true considering that most young adults use very little health care. …

Instead of more mandates, lawmakers should adopt reforms that allow individuals to purchase low-cost, mandate-lite insurance. Another alternative would be to allow individuals to opt out or waive certain coverage mandates to reduce the cost of their insurance. … The only way to substantially reduce the cost of health care is to put individuals in charge, not government bureaucrats. This means eliminating many of Pennsylvania’s costly health insurance mandates, not adding to them. Eliminating the burden of health care mandates will lower the cost of health care, provide more insurance to more individuals, and restore personal choice to citizens.

State Attorneys General Challenge Health Care Bill

Pennsylvania Attorney General Tom Corbett is joining with a number of other state AGs (latest count is 10 attorneys general) to challenge the “Nebraska Compromise” in the latest US Senate health care bill. This compromise exempts Nebraska from the additional Medicaid costs imposed on other states, including Pennsylvania, one of the hardest-hit states. Of course, there are a number of giveaways for other states in the heath care bill – from higher Medicaid reimbursements in Massachusetts and Vermont, to exempting Florida residents from Medicare Advantage cuts, to a grant to the UConn medical center.

A number of state lawmakers have already started to push back against the federal mandates imposed on the states in the health care bills.

Richard Epstein addresses some of the other reasons “Why the Reid Bill is Unconstitutional” in a post on PointofLaw.com

Government Health Care Still “Kills”

A couple of PA state legislators have recently cited a recent Harvard study to make the claim that thousands “are dying because of a lack of insurance” and that is why we “need health care reform now”. Unfortunately, the health care “reform” they support would likely do little to improve health care.

For starters, it should be obvious even to casual readers that a lack of insurance is not a cause of death, but heart disease, cancer and the like are. What studies like the Harvard piece do is note that the uninsured have worse health outcomes than those with coverage, and conclude that the uninsured are worse off. Even then, there is a huge difference between causation – i.e. “lack of health insurance kills,” – and correlation – i.e. “those who don’t buy health insurance are more likely to take poor care with their health.”

But one thing that is important to note is that individuals on government-run programs in the US (not to mention Canada and elsewhere) also have worse outcomes than those privately insured – and, in many cases, worse than the uninsured – and receive lower quality care. Note that the Harvard study excluded everyone on government health insurance from their analysis.

In fact, despite attacks on “greedy health insurance companies”, the insurer most likely to deny claims is Medicare – with a denial rate twice that of private insurers. Thus, given the quality of government coverage, it hardly makes sense to support more government-run health care.

Instead, lawmakers should look to free market solutions to make private coverage more affordable, and give patients more control on health care. This point was very aptly made in a recent Atlantic article by David Goldhill titled How American Health Care Killed My Father, which I recommend reading:

[T]he persistence of bad industry practices—from long lines at the doctor’s office to ever-rising prices to astonishing numbers of preventable deaths—seems beyond all normal logic, and must have an underlying cause. There needs to be a business reason why an industry, year in and year out, would be able to get away with poor customer service, unaffordable prices, and uneven results—a reason my father and so many others are unnecessarily killed.

Like every grieving family member, I looked for someone to blame for my father’s death. But my dad’s doctors weren’t incompetent—on the contrary, his hospital physicians were smart, thoughtful, and hard-working. Nor is he dead because of indifferent nursing—without exception, his nurses were dedicated and compassionate. Nor from financial limitations—he was a Medicare patient, and the issue of expense was never once raised. There were no greedy pharmaceutical companies, evil health insurers, or other popular villains in his particular tragedy.

Indeed, I suspect that our collective search for villains—for someone to blame—has distracted us and our political leaders from addressing the fundamental causes of our nation’s health-care crisis. All of the actors in health care—from doctors to insurers to pharmaceutical companies—work in a heavily regulated, massively subsidized industry full of structural distortions. They all want to serve patients well. But they also all behave rationally in response to the economic incentives those distortions create. Accidentally, but relentlessly, America has built a health-care system with incentives that inexorably generate terrible and perverse results. Incentives that emphasize health care over any other aspect of health and well-being. That emphasize treatment over prevention. That disguise true costs. That favor complexity, and discourage transparent competition based on price or quality. That result in a generational pyramid scheme rather than sustainable financing. And that—most important—remove consumers from our irreplaceable role as the ultimate ensurer of value.

Citizen’s Guide to Health Care Proposals

The Commonwealth Foundation put together a short guide to national health care reform proposals for citizens.   This resource include numerous links for more info, and a  four-page printable version for folks to take to town hall version

The guide borrows heavily from health care resources of the Cato Institute, Heritage Foundation, State House Call, the Laffer Health Care report, and others.

Here is an excerpt:

President Obama has pushed national health care reform, making it a priority. While there is no official “Obama plan,” and several different proposal in Congress, the leading proposals have several common themes. Unfortunately, instead of learning from the mistakes of state-based health care reform, these proposals repeat them.

Billions in New Health Care Spending

• Leading health care proposals would create a health insurance exchange, operated by the federal government, where insurance policies are sold, and would offer subsidies for individuals and families buying insurance on the exchange.
• Taxpayer subsidies for insurance will be available for those earning up to 400% of the federal poverty level. This equates to $88,000 for a family of four in 2009.

Government-Established Insurance Program

• HR 3200 would establish an insurance program run by the federal government, and available on the Exchange, to compete alongside private plans.
  • Critics of the public option believe it is the first step to a single-payer system. Supporters of the public option also suggest it is the first step to a single-payer system.

New Taxes

• Tax on the Uninsured: To pay for health care subsidies, and to enforce the individual mandate, the leading health care reform plans would impose a tax on individuals without the mandatory level of coverage.
• Tax on Employers: Employers who don’t provide the mandated level of coverage to employees would also be taxed.
• Tax on “the rich”: HR 3200 proposes a new “surcharge” tax on high income earners.
• Tax on Benefits: The Baucus Bill would impose a tax on employer-provided “Cadillac” or premium plans.

More Health Care Lessons From Massachusetts

A colleague at the Commonwealth Foundation sent me an article, in which Mitt Romney again declares Massachusetts health care reform a success, claiming the increase in taxpayer spending was “only” $700 million (assuming a decrease in spending this year). He figured this would provoke me to respond, given we have written on RomneyCare, highlighted evidence of its shortcomings, discussed health care reform in Massachusetts and other states at an event last month, and produced a video on the lessons we should learn from these failures.

Of course, I was already prepared, having planned to comment on Grace Marie’s Turner blog post which spotlights three major problems with Massachusetts’ health care reform. Namely, that health care premiums are skyrocketing, that the state is experience a shortfall in medical providers, and the there will be “crowd-out” as employers drop coverage.

There is also the Rasmussen poll where 37% of MA residents think the reforms were a “failure” vs. 26% who think it a success. But I also stumbled across a 2008 survey from Harvard’s School of Public Health, which shows residents are much more favorable to the reforms. But there are even more lessons from that study. While 69% said they “support” the law (vs. 22% “opposed”), respondents were more negative when asked about whether it has helped:

• People who do not have health insurance - Helping: 45%; Hurting: 33% Not much impact: 14%
• People who do have health insurance – Helping: 26%; Hurting: 18% Not much impact: 48%
• Small Businesses - Helping: 13%; Hurting: 56%; Not much impact: 19%
• Large Corporations - Helping: 19%; Hurting: 11%; Not much impact: 56%
• Young Adults – Helping: 32%; Hurting: 29%; Not much impact: 28%
• Poor People – Helping: 44%; Hurting: 31%; Not much impact: 14%
• The Middle Class – Helping: 27%; Hurting: 26%; Not much impact: 40%
• Doctors and Hospitals – Helping: 40%; Hurting: 16%; Not much impact: 26%
• The State Budget - Helping: 14%; Hurting: 39%; Not much impact: 26%
• You Personally – Helping: 14%; Hurting: 18%; Not much impact: 67%
• Massachusetts Economy – Helping: 22%; Hurting: 35%; Not much impact: 31%
• Quality of Health Care in Massachusetts – Helping: 29%; Hurting: 21%; Not much impact: 42%
• Cost of Health Care in Massachusetts – Helping: 20%; Hurting: 39%; Not much impact: 30%

Given the prevalence of respondents saying the new Massachusetts health care law is hurting or not having much impact, it is difficult to justify why 69% support it. The lesson is this: “Health Care Reform” is a feel-good phrase, people want to support it, even if it will do more harm than good.

Here are reasons why we think the current proposals before Congress are harmful, and what health care reforms we recommend instead.

What’s Wrong with “Medicare for All”?

Defenders of national health care proposals try to make the claim – in response to critics – that government-run health care is pretty good, citing Medicare (and Medicaid). So what's wrong with "Medicare for All"?

• Medicare's coverage is not that good
• Medicare recipients spend more per household (and a much a higher share of their income) on out-of-pocket expenditures than do non-Medicare households
• Over half of all Medicare recipients buy supplemental health insurance, or get it from their employer. An additional 22% are enrolled in Medicare Advantage, with additional benefits and costs (though Obama is looking to gut Medicare Advantage).

• Medicare has higher administrative costs per person than private insurance.

• Medicare is going bankrupt, with $89 trillion in unfunded liability.

• Medicare underpays doctors and providers, resulting in:
  
  • An increasing number of doctors who refuse to accept Medicare patients.
  • Cost shifting – Medicare shifts billions in costs on to providers, which results in increasing premiums for private coverage.

The final point would be extremely important to consider when discussing expanding the number on government programs – i.e. it will drive up the costs of private insurance (and of course, their will be fewer left to shift cost on to).

ObamaCare Is Bad Medicine for Pennsylvania

The Commonwealth Foundation released a new report showing that President Obama’s proposed takeover of health care by the federal government would have dramatically negative effects on Pennsylvanians.

The report, written by a research team headed by noted economist and former presidential advisor Dr. Arthur Laffer, entitled, The Prognosis for National Health Insurance: A Pennsylvania Perspective, finds that President Obama’s health care proposal would have the following effects:

• It would add $4,453 in additional health care costs for every man, woman, and child in Pennsylvania.
• Despite the additional $1 trillion in expected health care subsidies, 30 million people nationally would remain uninsured. The cost to reduce the number of uninsured by 16 million is $62,500 per person insured.
• Pennsylvania’s economic growth in 2019 compared to the baseline scenario would be reduced by 5.1 percent.

The report recommends the following reforms:

• Equalize the tax treatment of health coverage, so that individuals—not employers or government—own their health coverage.
• Repeal benefit mandates on insurers. State mandates (Pennsylvania has 52) drive up the cost of coverage. A recent study finds that each mandate results in about a 0.25% increase in the number of uninsured.
• Allow residents to purchase insurance plans approved in any of the 50 states. One estimate suggests interstate competition would reduce the number of uninsured by 25 to 33 percent.
• Repeal state laws which drive up the cost of prescription drugs, requiring higher prices than places like Wal-Mart would otherwise charge.
• Overhaul the Medicaid system, converting Medicaid spending into simple vouchers for low-income individuals to purchase their own insurance. This would improve quality, save costs to taxpayers, and reduce the price of private insurance by eliminating cost shifting.
• Adopt tort reform, eliminating frivolous lawsuits and jackpot jury awards that drive up the cost of health care.

Now I’m Telling the Truth, I’m Finished with Lies

Pittsburgh Post-Gazette columnist Sally Kalson has a ridiculous piece on health care reform (HT PA Watercooler), in which she admittedly fabricates a number of proposals she "imagines" Republicans would propose on health care. She then claims that "Democrats have been strangely absent from this fiction-writing competition" and proceeds to attack any critics of government-run health care … unfortunately the things she pretends to be honest about are less factual than those she made up.

First off, Obama and Congressional Democrats have made numerous false statements about health care proposals including that it would lower federal deficits, that everyone would be able to keep their current coverage, that it doesn't include an individual mandate.

I have spoken at several forums on health care, attended a few others, and watched a couple televised in full. These have not been rowdy, yelling audiences (with some exceptions, which seems to be all the media will cover), but generally informed and concerned citizens, with specific questions about the various proposals – often referring to details in the legislation and even page numbers from the bills. This calling those who object to Obamacare "the mob" is simply an attack the messenger approach to distract from the real debate (in fact, you will not find any discussion of what is actually in proposed health care legislation in Kalson's column).

Kalson thinks that since the phrase "death panel" seems over-the-top (I'll concede that it is) that we shouldn't be concerned about rationing. But Sarah Palin was mostly right when she said this, as health care policy gurus Greg Scandlen and Michael Cannon point out – the proposed legislation would empower a new federal board with far greater power to deny "unnecessary care" based on their calculation of its worth.

And Kalson tries the easy out by pointing to Medicare and Medicaid as showing that we already have "socialized medicine" … on that point, she is right, government currently represents half of U.S. health care spending – that is the problem. What Kalso fails to point out is that:

• Medicare and Medicaid are growing ever more costly and threaten to consume federal and state budgets.
• Medicare and Medicaid underpay doctors and hospitals, causing many doctors to not take new patients, and shifting billions in costs onto private coverage.
• Medicare and Medicaid coverage is very poor, which is why those who can afford to (wealthier Medicare recipients) buy supplemental coverage. In fact, the uninsured often get better care than those on government programs.

Perhaps most egregious is Kalson – and many in the media – is pretending the debate on of "reform" or "no reform", rather than about the right kind of health care reform. Kalson doesn't have to "imagine" Republican's health care reform plans would look like, she could actually study their proposals (including legislation by Jim Demint, who she demonizes).

I recommend using the useful tool that Conservative's for Patients Rights has created to compare actual health care reform proposals.

Report This Guy for Spreading “Misinformation” on Health Care

I'm sure by now everyone has seen the White House's call for reporting anyone who is spreading "misinformation" or anything "fishy" about Obama's proposed health care reform to flag@whitehouse.gov.

Already, folks and Reason Magazine and the National Taxpayers Union have decided to report themselves. However, I think Americans for Tax Reform has the right idea – reporting Barack Obama for spreading misinformation.

For instance:

• Obama claims that his health care reform bill would reduced federal spending, but the Congressional Budget Office estimates it would be a $2.7 billion increase.
• Obama claims (in fact, the call to report misinformation itself states) that "you can keep your current insurance." But the While House had to add the caveat that he "shouldn't be taken literally" – your employer may drop your current coverage, or private plans may be crowded out, or your plan may not meet new federal mandates – only that you would not be forced to enroll in the government program.
• Obama's infomercial on health care reform contained a lot of fluffy words – 'choice,' 'freedom,' 'marketplace.' But the actual legislation has few of those, and more words like 'prohibit,' 'taxes,' and 'regulate.'
• Obama attacked John McCain during last year's presidential campaign for proposing taxing employer-provided health care benefits as compensation, even though McCain also proposed a tax credit more than compensating for taxing employer benefits. Obama now supports a plan that would tax employer provided health care benefits – only without an offsetting tax credit.
• Obama said he would veto any tax on anyone making under $250,000 per year. The proposal he support would tax everyone who doesn't have insurance – most of whom make under $250,000 per year.
• Obama said he would not raise tax rates above what they were under Bill Clinton. However, the health care "surtax" he supports would certainly do this.
• Obama claims countries with single-payer systems have better health care then the United States with a free market system. But the U.S. does not have a free market in health care and other countries rely on private care as well. And the quality of care in the U.S. is better.
• Obama claims his plan would reduce the cost of health care. It won't. In fact, it will likely increase health care inflation.
• Obama denies his plan will "ration care", but it would have to.
• Obama claims critics support the status quo and offer no alternative. We don't endorse the status quo, and we do offer alternatives.

Who’s “Astroturf:?

President Obama, Dick Durbin, the unions, and shills at MSNBC have taken to calling protesters who disagree with their health care agenda as shills for corporate interests or "the mob." Of course, this is simply attacking the messenger approach that happens when they are losing the battle of ideas. But more so, these folks have no leg to stand on:

For instance, Rachel Maddow calls conservative activists "shills for corporate interests," without noting the irony that she is a million shill for corporate giant General Electric. Nor does her claims that Big Pharma is behind the protests ring true. Big Pharma is spending millions on pro-ObamaCare ads, and running these ads on Maddow's own show!

You might find it interesting that the special interests who denounce individuals voicing opposition to ObamaCare as "astroturf," a "mob," and part of a vast right-wing conspiracy (and occasionally beating them up) are actually hiring "grassroots" activists to support Obama's version of health care reform.

In response, American Liberty Alliance has set up a new site, "The People's Mob" dedicated to defend those who oppose government-run health care and support free market solutions from attacks from the left.

Of course, free-market advocates always get attacked for being shills for special interests – but in most cases, as in health care, the special interest groups are the ones supporting big government and making deals on ObamaCare:

Among the groups involved in the deal were the largest insurance industry lobbyist, America’s Health Insurance Plans, as well as the American Hospital Association, American Medical Association, and the Pharmaceutical Research and Manufacturers of America (PhRMA).

Then in June, Obama announced a deal between PhRMA and AARP to save $80 billion on prescription drug costs over ten years. Separately, PhRMA joined with the liberal Families USA to take out an ad playing off the “Harry and Louise” spots that helped derail health care legislation in 1994, only with the opposite message. “We can get the job done this time,” the Louise character says in the new ads.

And the AMA, which once stood opposed to government-run medicine, endorsed the liberal House Democrats health care bill, which introduces a new government-run plan.

The "astroturf" charges are leveled by groups pouring millions into lobbying for ObamaCare.

Last July, the group Health Care for Americans Now announced the start of a $40 million campaign expressly for this purpose, and the groups were loaded with backers from big labor and groups such as MoveOn, Planned Parenthood, and ACORN. As I've reported elsewhere, the group received a $10 million grant from Atlantic Philanthropies, whose CEO, Gara LaMarche, was previously director of U.S. programs for the Open Society Institute, the philanthropic foundation founded and chaired by George Soros.

In June, I attended a news conference in which HCAN and other liberal groups announced they would spend $82 million in an effort to support President Obama's health care push and press for legislation that includes a new government-run plan modeled after Medicare. Howard Dean, former chair of the DNC, is involved in this supposedly grassroots effort.

And check out how leaders of the AARP walk on their own members who disagree with their pro-ObamaCare message.

What about charges of "unruly mobs?" Certainly there has been some protests where the debate whas less than civil. But ironically, this has been thrown out there by union goons, who have a penchant for trying to intimidate those they disagree with. And now these unions and their affiliates have a plan of attack to shout down (or beat up) any conservative protesters. If fact, their memo encourages pro-ObamaCare advocates to show up, be loud, but to "not debate on their 'policy' points." Great, wouldn't want this to be about the issues. Here are some of the results:

• Supporters of ObamaCare beat up one of the protesters in St. Louis, putting him in the hospital. The newspaper didn't get the whole story, as their lead reporter on scene was arrested for "disrupting" the event.
• Union thugs also got violent against senior citizens in Tampa; Buck Right has the linkage and video.
• Club for Growth has a video blog of health care protests, so you can judge for yourself if they are "the mob" or "corporate shills."
• Here is a photo essay of the "scary people" in "the mob"