The Story
US Senate Touts Health Care "Reform"
Last Tuesday the Senate Finance Committee passed its version of health care reform, the fifth and final Congressional panel to do so. While the Finance Committee’s bill differs from the other versions of legislation in that it does not include a public option, it remains similar in many ways and shares the fatal flaws of all the Democrat-proposed health care overhauls.
The bill proposes the creation of co-ops seeded with federal money, insurance subsidies for low-income Americans, an individual mandate, numerous new taxes and fees on insurance and drug companies and regulations preventing insurance companies from denying coverage to those with preexisting conditions.
It should be noted, first of all, that the proposed co-ops would not be co-ops in the normal sense of the word.
Traditional co-ops are funded by and run by their members. The co-ops proposed in the bill are funded by the government and include plans chosen by the government. Senator Jon Kyl has accurately referred to the Democrats’ co-ops as a "Trojan horse" for a public option.
The bill also includes an individual mandate, meaning that if you want to live in America, you have to purchase health insurance, whether or not you want it. The individual mandate, of course, is the same as a tax -- the government is forcing you to give up your money -- but it is a private corporation that will benefit rather than the government.
If you don’t purchase insurance (for instance, if it is more cost-effective for you to pay medical expenses out-of-pocket than to buy insurance), you will be fined up to $1,500. And if you fail to pay the fine, you will be slapped with a much larger $25,000 fine and up to a year in jail.
The bill’s price tag is $829 billion over the next ten years, but it is safe to say that this is a drastic underestimation. For instance, when Congress instituted Medicare in 1966, it estimated that the program would cost an inflation-adjusted $12 billion by 1990. The actual cost of Medicare by 1990 was $107 billion, so it’s probably fair to assume the actual cost of the bill will be in the low trillions.
The bill would be paid for in a variety of ways. For one, it would reduce Medicare payments to health care providers, such as hospitals, by $400 billion over the next ten years.
Robbing hospitals of profit will lead to lower-quality care, and underpaying doctors is a surefire way of discouraging people from entering the medical profession; when you combine the decrease in doctors with the skyrocketing demand that will come with subsidized health care, you have a bona fide shortage on your hands.
Three-hundred and eighty billion dollars of the bill would come from new taxes and fees, particularly those levied on drug companies and manufacturers of medical tools. The result of this will be a drastic reduction in the money spent on research and development in this country; drug companies will simply have less money to spend on innovation. Jobs will be lost as companies leave the country to seek environments friendly to doing business, and the American hegemony in medical advancements will quickly come to an end.
New regulations preventing insurance companies from denying coverage to those with preexisting conditions would serve as a huge drain on the system. We should be honest about what these regulations really are: they are a form of welfare.
You cannot insure against a disease that someone already has. You can, however, give them welfare, by subsidizing their purchase of insurance. These regulations have nothing to do with insurance. They simply create a new class of government dependents.
What, then, are the effects of this bill? Fewer freedoms, more taxes, skyrocketing government spending, worse care, medical shortages, dampening of medical advancement, loss of U.S. jobs, and a new form of welfare.
Congress is guilty of fraud simply for calling this shockingly incompetent piece of legislation “reform” at all.
Austin Raynor is a staff columnist for The DSJ. His views do not necessarily represent those of the entire staff.