"Reviewing the Health Overhaul Bidding " (via Hugh Hewitt)
By Clark S. Judge, managing director, White House Writers Group, Inc.
Let’s review the bidding now that Obama/Pelosicare has passed the House.
As reported here two weeks ago, according to one of the nation’s leading experts on the federal budget, former OBM deputy director and Hoover Institution economist John Cogan, by mid century without the president’s agenda, the federal spending including Medicare and Medicaid are on track to consume 34 percent of national income. [# More #]
With the president’s program, that number will jump to 60 percent. Cogan noted that the peak year for U.S. government spending as a percent of GDP was in World War II, when it hit 40 percent for one year. We are, as he said, entering uncharted economic and fiscal territory.
It doesn’t have to be this way. There are inexpensive, more effective health reform alternatives on the table.
The president points (correctly) to the need for greater competition among health insurance providers? But lack of competition is a result not of market failures but state government mandates. The answer isn’t a fabulously expensive public option. It is to legislate that an insurance plan that is approved in one state will be salable in all. Instantly you would solve the one-state-few-competitors issue. And you would introduce competition between the states. National competition would force states to determine which of their mandates is truly necessary and which is a payoff to special interests. Do the people of Massachusetts really need every health policy to include in vitro fertilization? No wonder they have among the nation’s highest insurance prices.
The president points (again correctly) to the pace of health care inflation generally. But as economist from Milton Friedman on have noted, health care inflation in the U.S. is a result of breaking the link between the payer of services and the receiver of services—and this, too, is a result of government policies, in this case tax policies. U.S. tax law heavily discriminates against those who buy health insurance or health care services on their own. The tax breaks for buying through your employer make other options prohibitively expensive. So level the playing field. Give individuals the same breaks that their places of work receive. The result would be instant pressure on all providers to increase productivity – and stagnating productivity is the central problem in our health system.
But the House has passed a bill that does nothing to reduce mandates (just the opposite, they’ll add a federal layer), nothing to create a national market for health insurance, and nothing to give individuals control over their own health plans. It does however mandate personal spending that can rise as high as 20 percent of income (see here: http://tinyurl.com/yggstf ).
Here is where it comes down. The House bill is built on the same social democratic model as Medicare. When that program was passed in 1966, the House Ways and Means Committee estimated that by 1990 it would cost $12 billion. The actual number was $107 billion (see here: http://tinyurl.com/yac7tg9 ). Before the current administration took office, among Washington’s great worries was that the program’s unfunded liability (now running over $74 trillion, multiple times larger than our deficit) would bankrupt the nation. So in what the president’s budget back in February termed “A New Era of Responsibility,” the House of Representatives proposes to layer on top of that program a new and vastly more expensive program.
We all have our favorite explanation for what has made the Democrats in Washington go mad. Power crazed ideology?
Original, longer article:
http://www.hughhewitt.com/blog/g/4a299a8b-4564-4f87-aae6-dcff1cddc99e
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