Universal Healthcare Myths

The debate over universal healthcare continues to heat up in Washington as President Obama pushes for a government run healthcare system and is assisted by the far left wing of the Democrat Party. Resistance is beginning to grow now that the price tags for the various plans are emerging from the Congressional Budget Office (CBO).

But the biggest problems surrounding the debates are the myths and misconceptions about healthcare and health insurance. It is the myths and misconceptions that are driving a “cure” that isn’t really needed — at least not at the staggering costs of an already overburdened federal deficit. So let’s examine some of the myths and then you decide whether Obama and the socialized medicine advocates are right.

The first myth is that there is a “right to healthcare.” Just because President Obama says it doesn’t make it so. There certainly is no constitutional right to healthcare and at least at this time there is no federal or Oregon state law granting such a “right.” The one state that has come the closest to creating a “right” to healthcare is Massachusettes and the massive drain on its resources threatens to bankrupt the state yet this year.

Congress may choose to create such a right but it does not exist currently. And as with other “rights” created by Congress one should be cautious about the unintended consequences that will evolve — the fertile minds of the nation’s trial lawyers and activist judges have found succor for the enlargement of such matters routinely.

The second myth is that there are 50 million people without healthcare coverage. That’s baloney. Federal law requires hospitals providing emergency service to take all people regardless of their ability to pay. Thus all people living within a reasonable distance from a hospital have access to healthcare. Advocates for the poor and minorities routinely counsel their constituents to utilize emergency room services for all of their healthcare needs.

The 50 million, at best, represents the number of people without health insurance. Even that number is misleading because it includes a) persons who are without health insurance at anytime during a given year even though they may acquire it sometime during the year — generally applicable to people changing jobs, b) persons (particularly young healthy singles) who can but choose not to purchase healthcare insurance, and c) the vast majority of the nearly 20 million illegal aliens present in the United States.

There is a significant difference between having access to healthcare — which nearly everybody does — and having access to health insurance. The former is a problem already solved and the latter is a problem so small that it does not need the assistance of the federal government.

The third myth is that universal healthcare will reduce the cost of healthcare. It is beyond stupid to conceptualize that giving free health insurance to 50 million people who do not currently have it will result in lower federal expenditures. The history of Medicare, Medicaid and the Oregon Health Plan put the lie to that fallacy. Each time those plans have expanded coverage the cost has increased exponentially and the result is more tax dollars being spent and/or the reimbursements to the medical professionals being curtailed. The third leg of that stool is the inevitable curtailment of service covered.

The final proof of that lie is found in the reports of the Congressional Budget Office. Even though Pres. Obama and his far left supporters talk about the savings from “eliminating” the hidden costs of healthcare that are now present in the free care through emergency rooms, the CBO has emphatically proven that to be false. (More importantly, if you can achieve such savings in the emergency room program, why not just limit its application to persons lawfully in the United States — that wouldn’t even require a new bureaucracy.) Every plan pending before Congress has the same result — significantly greater costs to an already overburdened tax base. Suggesting that your can curtail expenses by expending more is criminally stupid.

The fourth myth is that the government can gain efficiencies through a universal healthcare plan. Social Security, Medicare, Medicaid, defense procurement, foreign aid, disaster relief, and on and on and on. Every one of these programs is fraught with fraud, waste and general incompetence. The injection of politics into any program, by definition, results is less rather than greater efficiency. For those who say otherwise, the burden is upon them to demonstrate a single instance in which a government program has resulted in “efficiencies.”

But given that this is now a political matter, and worse yet a political matter designed to “buy” votes from political constituencies, let me restate my proposal. While I do not support universal healthcare, at least my proposal accomplishes two critical elements for any plan — it is uniformly fair and it preserves the right to choose your healthcare provider. It is a hybrid free market alternative that is self-administering, less costly and will drive the big government advocates nuts.

Here it is by the numbers:

1. Every legal resident of the United States is required to obtain and maintain health insurance. Those who fail or refuse to obtain health insurance will be denied health services unless they are able to pay cash for such services at the time they are incurred. Illegal aliens will be treated in the same manner as all others — they will have access to healthcare only to the extent that they have insurance or are able to pay cash for such services. (See Item 7. below.)

2. The burden is on the individual and not employers. Those employers currently providing health insurance will be required to arrange conversion of their policies to individual policies. Those employers will also be required to increase the salaries and wages of their employees by the amount of savings attained by elimination of their cost of providing such coverage. (We are not looking for windfalls here.) The principle reason for imposing the obligation on individuals rather than employers is that “futurists” tell us that this generation and future generations of people will not have a single lifetime employer but rather a series of employers over their working lives. Not all employers provide health insurance and as employees move from job to job, they will often find themselves scrambling to find health insurance — sometimes during periods in which they may be surcharged because of a health issue. If employers chose to contribute to an employee’s healthcare, they can make such payments directly to the employees health insurance provider rather than having the employee be at risk of losing the employer’s plan upon termination of employment.

3. Each person who obtains health insurance will determine the extent of the coverage they wish. This permits buyers a continuum of choices ranging from complete coverage to catastrophic coverage only. Thus those who wish to have coverage for such things as birth control, cosmetic surgery, erectile dysfunction, and mental health problems are free to choose such alternatives without the government telling them that they are included or excluded.

4. The cost of such individual healthcare will be funded by a full tax credit against any income taxes owed to the jurisdiction mandating the universal healthcare. (After all, if healthcare is a fundamental right, it, like voting and education, is one that we should not have to pay for directly, but only through a general assessment of taxes.) Thus, if the State of Oregon mandates such coverage, the tax credit will be against state income taxes owed. Or if the federal government mandates coverage, then the tax credit will be against federal income taxes owed.

5. The amount of the tax credit cannot exceed the average cost of health insurance claimed as a tax credit by all taxpayers. For those choosing to forego health insurance in favor of the “pay as you go” option, they can claim a tax credit for their actual cost of healthcare not to exceed the average cost of health insurance. This permits those who opt for more comprehensive coverage to absorb the additional costs and those who opt for more limited coverage to offset a portion of their incurred healthcare expenses in addition to their insurance.

6. Now here is the twist. In those instances where the claimed tax credit exceeds the income taxes paid, the taxpayer is entitled to a cash refund for the difference. By doing this, we eliminate the idea that low income people will be unable to afford individual health insurance since, having applied the tax credit and refund, there is no out of pocket cost to them for the insurance.

7. The federal law mandating that hospitals must provide emergency room service to everyone regardless of the ability to pay must be repealed. (An exception should be created for emergency services when timeliness of care pre-empts the ability to determine whether there is insurance or not.) While this requirement was originally enacted to ensure that low-income people had some access for catastrophic healthcare, immigration advocates have abused it. They, knowing that no one can be turned away, now counsel illegal immigrants to utilize the hospital emergency rooms as the primary healthcare provider. The extraordinary cost that over 15 million illegal immigrants impose on the healthcare system has the ancillary impact of raising the cost to everyone else. Elimination of free medical care for illegal immigrants will enhance state and federal laws now being enacted barring employers from hiring illegals. If the jobs and the benefits go away, the reason for illegal immigration will also largely go away. There is no longer a need for free access to catastrophic healthcare by low-income people because they will now all have health insurance. (See Item 6. above) And thus the need for free care at hospitals will be eliminated.

So how much will this cost taxpayers? Far less than any of the plans being proposed by those who advocate a government managed program for three simple reasons. First, it is a self- administering program. The only government involvement is to annually determine the average cost of health insurance as claimed for tax credit purposes and to provide reimbursement to low income people of the amount by which their tax credit (Item 6 above.) exceeds their taxes actually paid. Thus the whole cost of the massive bureaucracy attendant to government administered programs is eliminated. Second, there is individual selection of competing healthcare plans — you know, competition – that will ensure that the lowest possible price for comparable products is available. And third, there is choice as to the level of coverage. Those who want less can save and those who want more will pay the excess over the average cost. Gold plated programs such as those enjoyed by public employees will not be financed by taxpayers since the burden will fall individually on the public employees.

Is this plan perfect? Far from it. There will obviously be flaws, adjustments and corrections needed but the underlying philosophy is sound, market driven and sustainable in an era in which politics, not economics, appear ready to drive a demand for universal healthcare coverage.