The Pluses and Minuses of Pelosi’s Package
By Matthew Rothschild, October 29, 2009
Nancy Pelosi’s health care reform bill has much to commend it, and much to condemn it.
On the plus side, there’s a public option, with no opt out.
The insurance companies won’t be able to deny coverage for preexisting conditions or rescind policies once someone gets sick.
And it greatly expands Medicaid.
Currently, Medicaid doesn’t cover all poor Americans. If you’re single and poor, you’re out of luck. And if you’re married and poor but don’t have young kids, you’re also out of luck.
But under Pelosi’s plan, every adult in America who is poor would qualify for Medicaid.
And her plan raises the qualifying definition of poor up to 150 percent of the poverty line—that means anyone earning under $16,200 would be eligible for Medicaid.
Another plus is on the funding side. Rather than tax generous health care plans that unions have won, as the Senate bill would, Pelosi’s would slap a 5.4 percent surtax on individuals making $500,000 or more, and families making $1 million or more.
The bill isn’t near perfect, though.
First, it doesn’t allow the government to set the reimbursement rates. Instead, the insurance companies would be empowered to negotiate those rates with the government.
Second, it appears that Pelosi’s public option would not be open to everybody. Like Obama’s plan, not many of us would be able to join it. And I wish it would have kept Rep. Dennis Kucinich’s amendment to allow states to experiment with universal coverage.
Kucinich himself denounced the compromise.
“Is this the best we can do? Government negotiates rates which will drive up insurance costs, but the government won’t negotiate with the pharmaceutical companies which will drive up pharmaceutical costs.
“Is this the best we can do? Only 3% of Americans will go to a new public plan, while currently 33% of Americans are either uninsured or underinsured?
“Is this the best we can do? Eliminating the state single payer option, while forcing most people to buy private insurance.
“If this is the best we can do, then our best isn’t good enough and we have to ask some hard questions about our political system: such as Health Care or Insurance Care? Government of the people or a government of the corporations.”
I also believe that true health care reform must include health care coverage for everybody in America, not just citizens. And this bill doesn’t provide that. Health care is a human right. It doesn’t matter whether you are here without proper documentation or not; you deserve health care. And, from an economic standpoint, it’s foolish to deny health care to the undocumented, since they will end up going to the emergency room for costly care when they could have been treated initially, at much less cost, if they had health care coverage.
Pelosi could have come forward with the strongest bill possible, knowing the Senate would water it down. She didn’t need to pre-dilute it.
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Comments
Paine76 has a point to make. He rambles through silly tangents and non-sequiturs before coming to the point that we have a right to enact government-run health care if we want to. Unfortunately, he doesn't argue why we should, arguing only that we can, which was a given. He then likens health care to police protection, public schools, highways, etc. This portion of his post is worth consideration. We ask government to handle police protection and highways because the alternative would be untenable. To the left, our current health care system is untenable. But are the proposed alternatives designed to improve health care efficiency, or to redistribute wealth?
The example of public schools is different. There was a time when public schools were the best way to organize education, but now we have a government monopoly school system that ill serves our students. Breaking this government monopoly would improve education, returning better results and/or lowering costs. Contrary to Paine’s assertions, public schools do not “compete” with private schools, inasmuch as public schools are funded by all taxpayers regardless of the schools chosen by families. Real school competition would lead to better outcomes for our children and for society. But that's an argument for another day.
Like for police and highways, should we make health care a government monopoly? What would be our reason? We have private police forces and private roads, but they are secondary to "public options" because competing police authorities and road systems would lead to chaos. Competing health insurance plans do not lead to chaos. Leftists may argue that the choices are confusing, but that isn't a reason to curtail them, unless you accept the idea that government should limit our choices and control our health decisions. When phrased that way, leftists usually backtrack and try to rephrase. But that is essentially their premise.
In order to deliver the best health care to the most people, it boils down to economics. Here is where the leftists falter. Government-run health care will either reduce the overall quality or increase the overall cost, or both. That is because the free market system that Paine knocks is the best system for apportioning scarce resources to maximize satisfaction. Free markets are a self-righting system – inefficiencies lead to disadvantage and losses in the marketplace. Command economies, on the other hand, require price fixing that will identify optimum prices as well as markets do, something never achieved in any command economy.
Many insist that a government takeover will lower costs and improve services overall. Rothschild at least argues honestly that a government takeover will force taxpayers to subsidize goods and services for those who don’t provide for themselves. But the bills heading through Congress would create perverse incentives to avoid personal responsibility and to rely on others when health problems emerge. With incentives to pay less and take more, how will that improve efficiencies in health care?
In reality, this debate is about redistributing earnings. Rothschild and others believe that we should give goods and services to some people and send the bill to other people. By focusing on the people who will gain and by ignoring those who will lose, leftists find this a worthwhile proposal, demonstrating that this is more about "class struggle" than about providing better health care. But arguing for class struggle would lose the majority of voters. Hence, the disingenuous argument that government-run health care will be more efficient.
Simply subsidizing health care for the poor would be a less destructive alternative, but it isn’t being considered because it doesn’t have the façade of benefiting all. So instead, by demonizing insurance companies and exploiting taxpayers, leftists attempt to coerce people and control their health care, their earnings, and their lives.
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