Lies and Logic

"When you hear the naysayers claim that I'm trying to bring about government-run health care, know this: they're not telling the truth."

Frankly, it is a little surprising that a president, any president, would say this outright. It's a little disheartening to think that, to the President, his political opponents do not simply have a different point of view or an honest disagreement, they are liars. Although I suppose it does allow one to distance themselves from any real discussion on the merits of the policy.

What makes this statement so astounding is that, when one considers the facts, particularly in the context of history, and the admissions of many in his administration, the conclusion that we are moving ever closer towards government-run health care seems unmistakable. The President himself has, on more than one occasion, even stated that a single-payer health care system, "managed like Canada's," would be his ultimate preference. Now opponents are "liars" for having the audacity to take him at his word.

Of course there are still more technical reasons to believe that, whatever his intentions, the President is irreversibly taking us down a road we don't want to go down. The nature of the bill makes this a virtual certainty.

Much has been made of the "public option" that is now a part of the health reform legislation unveiled yesterday. That any discussion of reform lacking this new behemoth was deemed a non-starter reveals a great deal about the intentions of the reformers. Irrespective of anything you may have heard, a public entity does not "compete" in a private market in any real sense of the word, let alone under the terms currently being discussed.

With the full backing of the Department of the Treasury, a public option has the ability to offer artificially low premiums, expanded benefits, or both. This, with textbook certainty, would lead to what economists refer to as "crowding out," or the tendency of a public program to steadily erode a private market. The independent Lewin Group has previously estimated that more than 119 million people will loose or drop their private insurance due to this. This is almost half of the insured population of this country.

This has the corollary effect of reducing the indemnity pool in the private market, forcing the premiums of those who remain skywards and driving more and more people into the waiting arms of Uncle Sam. As this process perpetuates itself, and private insurers steadily succumb to the capital-advantaged juggernaut, the public option will soon become the only "option" left. This of course will put increasing pressure on government budgets, forcing the need to constrain rising costs via the only means possible: rationing of care, waiting lists, reimbursement reductions, or some combination of the three. The consequences for medical access and innovation will be severe.

Interestingly enough, the financial set up of the public option is to be remarkably similar to that of Fannie Mae and Freddie Mac. With the implicit guarantee of the U.S. government behind it, a public option is provided the perverse incentive to shoulder increasingly unreasonable liability. This is the same sort of untenable position that Freddie and Fannie found themselves in not too long ago. Needless to say, it didn't turn out very well, and it's costs have been nothing short of incredible.

While the legal and financial status of the public option is formidable, it is the intensive regulatory restrictions to be cast upon the entire market that cement the deletrious effects of the Democratic health bill.

Over the past weeks and months I'm sure that you have heard the promise, coming from the highest levels: "Let me make this clear: If you like the insurance you have, you can keep it."

The legislation itself however is a little less clear on that point. Sec. 102 "allows the maintenance of current individual health plans as 'grandfathered plans' and provides for a five year grace period for current group health plans to meet specified standards (insurance and benefit requirements)."

The title of this section of the summary is, of course, "Protecting the Choice to Keep Current Coverage." However, the language of the bill makes this promise somewhat illusory. According to the bill, current insurance plans, that you have chosen, will be permitted for just five years. If, in that time, your plan does not meet the standards that the federal government has set, your plan will cease to exist, regardless of your satisfaction with it. Somehow, this seems to violate the principle of "choice."

If the President really wants to assure Americans that he doesn't seek government-run health care he needs to address these concerns. Following logic isn't the same as lying, Sir.

Posted by Rebecca Novello on September 17, 2017