Ferrara’s healthcare analysis dispels myth, focuses on facts

by Kay B. Day

We believe President Lyndon B. Johnson’s ‘Great Society’ agenda created many of the financial and social problems we have today. Starting with 19 million enrollees in the mid-1960s, Medicare is expected to comprise 11 percent of the US economy by 2030, covering 79 million people. Removing such a large consumer group from the private sector is a primary driver of increasing health costs for those of us in private plans. If you have payroll taxes deducted, you are subsidizing Medicare. And if you want your social security, you have to sign up for the plan. Like lending, railroads and the post office, Medicare is a financial quagmire. Those who can buy a private supplemental policy to Medicare because it enables them to receive better healthcare. [Photo from White House website.]Could the healthcare debate get any crazier? Big government fans curse protesters and small government fans give as good as they get. But rarely are facts discussed. Even more rarely are solutions discussed.

What we must admit to ourselves before we can take an Obama step “forward,” is that Congress miserably failed the task at hand. If you haven’t read any of the bills or proposals coming out of House and Senate committees, you should do so if you plan to discuss healthcare reform. I doubt there would be a single Main Street proponent of any of these bills if everyone read them. There is an excellent analysis of all the legislative efforts written by Peter Ferrara and published at The Heartland Institute. The Institute leans conservative, but Ferrara focuses on actual language and figures politicians from both parties use to justify their positions. So if you can’t agree with him politically, you can at least use some of the data he includes to form your own opinion.

Thankfully Ferrara doesn’t veer into Biblical justification. If I hear one more proselytizer tell me how to be a better Christian by giving the government control over another sector of the economy, I will refuse to turn the other cheek. One could celebrate the fact liberals are apparently finding God if one were a right wing evangelical. All I can say is if you’re using God to justify more big government spending and a dramatic increase in the size of government, you’d best re-examine your faith and, whether you’re a right wing evangelical or a left wing socialist, do not tell me how to practice mine regardless of the social issue at hand—yes, healthcare is a social issue. And an economic issue.

One myth Ferrara dispels relates to the uninsured. President Barack Obama talked a lot about that group during the campaigns, often citing the 45 million “uninsured.” Republicans have cited it too. Here are some facts:

“Twelve million people who are uninsured in America are eligible for public programs like
Medicaid, SCHIP, or Medicare, but are not enrolled. They immediately become insured when
they enter a hospital and ask for care. Another 16.2 million earn over 250 percent of the poverty
level (about $50,000 for a family of four and about $25,000 for childless singles). With some
exceptions involving people with pre-existing conditions who have allowed their insurance
coverage to lapse, they could afford to purchase insurance but choose not to. That leaves closer
to 18.8 million uninsured who may actually be unable to purchase health insurance. But even
this number overstates the size of the problem.

At least half of the low-income uninsured are young adults, ages 18-34, many of whom do not want to spend the money for health insurance, and the great majority of whom do not incur substantial medical expenses. Health insurance is simply a bad deal for these people, and so long as care is available on a cash or credit basis, or via the safety net of free care for the indigent, they will continue to choose not to buy health insurance.

About 10 million of the uninsured overall are non-citizens, whether here legally or illegally. Right or wrong, many American taxpayers doubt whether their taxes should be used to subsidize or buy health insurance for members of this group.
 
Finally, many of the people who are uninsured lack insurance for only short periods of time
Three quarters of the uninsured regain coverage within 12 months. Being without insurance for
several weeks or months is not the same as lacking access to care: Care can be purchased with
cash or credit, people with low incomes can receive free or subsidized care, and some kinds of
care and treatment can be delayed…”

The bills before Congress would essentially retool the whole healthcare delivery system for a small segment of American citizens.

Ferrara discloses other facts you should know. Among them:

•The Congressional Budget Office concluded the Obama plan won’t reduce healthcare spending. CBO Director Doug Elmendorf testified to the Senate Finance Committee in July: “In the legislation that has been reported we don’t see the sort of fundamental changes that would be necessary to reduce the trajectory of federal spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health costs. ... [The government public option for health insurance] raises the amount of [spending] that is growing at this unsustainable rate.”

•The House Ways and Means Committee, passed a raft of new tax increases to pay for the increase. These include: an income tax increase on workers who do not purchase the government-required health insurance—the amount of the tax would be 2.5 percent of adjusted gross income or the average individual premium amount for such insurance for the year, whichever is less; a new payroll tax, equal to 8 percent of payroll, on employers who do not provide health insurance; a new excise tax on private health insurance plans and other taxes.

•In 2008 over 33 percent of physicians had closed their practices to Medicaid patients and 12 percent had closed their practices to Medicare patients. Underpaying highly skilled professionals has consequences.

If you plan to discuss healthcare or bash protesters or criticize Obama-care fans, read the bills. Ferrara’s report is the best analysis I’ve found yet from any policy wonk site left or right. He does advocate private sector control of healthcare, but even if you disagree with that, his analysis of the legalese is valuable. His work is heavy on facts and non-confrontational on narrative, using data from government offices like the CBO.

Medicaid and its slightly more upscale sister Medicare have already been pitched as safety nets. Take a look at your pay stub and see what you are already paying for Medicare by government mandate. On Medicaid, Ferrara writes, “Yet that program [Medicaid] is just another example of the black hole of socialized medicine. It already costs more than $400 billion a year and its costs are projected to explode in future years. It is projected to cost almost $5 trillion over the next 10 years, reaching an annual cost of $674 billion in 2017 alone.”

Update on Thursday, September 3, 2009 at 11:58AM by Kay B. Day, Editor

UPDATE
9-3-09

Another bothersome aspect of HR 3200--reliance on the Internal Revenue Service to determine whether your insurance is acceptable. Read 'Healthcare Reform Means More Power for the IRS.' Here's an excerpt:

In short, health care reform, as currently envisioned by Democratic leaders, would be built on the foundation of an expanded and more intrusive IRS.

Under the various proposals now on the table, the IRS would become the main agency for determining who has an "acceptable" health insurance plan; for finding and punishing those who don't have such a plan; for subsidizing individual health insurance costs through the issuance of a tax credits; and for enforcing the rules on those who attempt to opt out, abuse, or game the system. A substantial portion of H.R. 3200, the House health care bill, is devoted to amending the Internal Revenue Code of 1986 in order to give the IRS the authority to perform these new duties.