Obama Care Is On Display in Massachusetts

Since 2006, Massachusetts has had a State managed healthcare system nearly identical to the healthcare bill that just passed into law. During the debates I had suggested that people take a long hard look at existing State health systems because every State that has meddled in healthcare has experienced crippling difficulties. While several States have attempted this, Massachusetts was the one that had nearly everything the Senate bill featured. The exchange; the subsidies and most importantly, it had an individual mandate requiring all residents to purchase an acceptable insurance plan or face a penalty.

The first effect Massachusetts felt was that individuals that had the money, desire and an idea to create a business began slipping across the borders into neighboring States to avoid the increased taxes and regulations imposed after the implementation of “Commonwealth Care”, the Massachusetts healthcare plan. As the plan began to mature and more of the uninsured obtained insurance either purchased to satisfy the mandate or provided through subsidies for the impoverished, the number of uninsured dropped to the lowest in the nation at just around 4%. Unfortunately, Massachusetts did nothing to make the prospect of practicing medicine in the Bay State any more palatable than it was before everyone had insurance so there was a measurable doctor shortage almost immediately. Wait times to see doctors have become frustratingly long and the extra burden placed on primary care physicians has taken a toll on the quality of care which were two things that voters had been assured would never happen.

The other thing that the people of Massachusetts were assured was that the cost of obtaining health insurance would finally be reigned in but that too, would turn out to be just another broken promise. The fact is that the cost of insurance in Massachusetts that was already the highest in the nation continued to climb at a staggering 10% per year, well ahead of inflation. By early 2008, the “safety net” hospitals that provided care for low income people in urban areas were experiencing serious budget shortfalls due to the combination of reduced "free-care" payments from the state and low enrollment in the exchange or “Commonwealth Care”. The State had reduced payments to hospitals expecting a reduced need for hospital charity as more people enrolled in Commonwealth Care but the enrollment that took place made little difference. What the social engineers in Massachusetts did not anticipate was that the fine for not having insurance was so low that people would learn to “game” the system. You could avoid thousands in insurance premiums and pay a minimal fine of a few hundred dollars and then get insurance through the exchange later when you absolutely needed it.

Some had argued for meaningful fines associated with the refusal to purchase health insurance but the bill would never have passed with the higher fines in place. As it was, the State spent years in court defending the mandates and fines and still has legal challenges waiting in the wings. One would think that the shortages to the hospitals would be an easy fix to address and all that would be required was to have the legislature reinstitute the reimbursements for indigent care but by then, the State was facing a short term funding gap of one-hundred million dollars and needed a new three year commitment from the Federal government for an additional one and a half billion dollars or the system would be in serious trouble.

Since the referendum ballot adopted by Massachusetts severely limited the States ability to increase taxes, the State floated several ideas to increase revenues such as an additional one dollar tax on a pack of cigarettes, but none of these measures were capable of stopping the arterial bleeding endemic in Commonwealth Care. The one-hundred million dollar short term funding gap would be the good news for 2008 as the State disclosed they had a one point three billion dollar deficit, much of which was attributed to the failings of Commonwealth Care. In 2010, the portion of the Massachusetts budget consumed by health and human services is a staggering fifty percent (50%) of all State spending. In response to the growing cost to the State, Massachusetts Governor Deval Patrick has instructed the State Division of Insurance to reject any request for health insurance rate increases that exceed the rate of medical inflation. Guess what? All of the available plans requested rate increases that exceeded the rate of medical inflation and 235 of the 274 requests were denied setting the stage for a showdown between the authority of government and the independence of business in Massachusetts.

The Governor’s instruction to the State Division of Insurance amounts to a unilateral imposition of price controls on an industry already hampered by State regulations and reduced reimbursements from the State. Four of the six companies that provide insurance through the Massachusetts exchange have posted substantial losses for all of 2009, which is what prompted the requests for rate increases. The insurers responded to the Governors edict by refusing to write any new policies until the matter was addressed and immediately filed suit against the State.

On Monday, a judge in the Suffolk County Superior Court ruled against the insurers stating that the insurers must exhaust the appeals process with the Division of Insurance before seeking a ruling from the courts. Four of the insurers have already filed appeals in accordance with the judge’s decision, vowing to take the matter to the Superior Court if necessary. Facing what is in essence, a health insurance blackout, Massachusetts Insurance Commissioner Joseph Murphy ordered the protesting insurers to return to the market with acceptable price quotes by 3pm Thursday, April 15th or face fines of five-thousand dollars a day per carrier plus one-thousand dollars for every consumer that is unable to buy coverage because of the action. So far, only one carrier, Health New England, has provided the new quotes demanded by the Commissioner.

Hopefully, they can resolve this for the benefit of those that rely on their health insurance because of long term illness or emergency needs but this may turn into our first real case of “Atlas Shrugged”. Let’s face it, the Federal government may have prohibited health insurers from competing across state lines but they are national companies. The only thing the Federal prohibition does is force the largest insurers to create 50 separate companies with the administrative costs that go with them. Blue Cross-Blue Shield in Massachusetts can thumb their nose at the Governor and Commissioner and close up shop completely in that State and do all the better for it. When a train has a car with a bad wheel, they separate it from the train and keep on going and for government to attempt to force a private company to sell a product at a loss is not just foolish, but un-American.

This isn’t the only challenge Commonwealth Care has. They still haven’t been able to attract doctors that want to work under those conditions so the State is now relaxing the restrictions on nurse practitioners and allowing them to perform health services formerly reserved for licensed doctors opening the door for yet another lowering of the quality of care. Before anyone goes into a rage over my comments, I know that nurse practitioners are hard working and dedicated people worthy of praise but they are simply not doctors. If there were no distinction between the two, there would be no need to bear the expense to complete additional education and go through the rigors of licensing to become a doctor. The fact is that just the suggestion that a change in State regulations would lower the quality care to fill the shortage of doctors leaves the State open to massive new law suits. It won’t take long for savvy personal injury attorneys in Massachusetts to provide a costly link between the State’s expansion in the role of nurse practitioners and the perception that suddenly, every medical procedure that doesn’t meet the recipients expectation could have had a different outcome if a bona fide doctor performed the services.

With the similarities between Commonwealth Care and our newly passed healthcare bill I seriously doubt there can be a substantially different outcome. Since the healthcare insurers will not be able to avoid the draconian price controls that will undoubtedly be imposed within a year or two after implementation by simply moving their business to another State, the insurers will most likely be driven out of business when the money runs out. You can bet we will have the same doctor shortages, the same wait times and the same willingness on the part of the public to pay the fines until they actually need insurance; insurance that will no longer be able to exclude pre-existing conditions. It’s a little late for the hard look the media is giving Commonwealth Care and I doubt they would even be doing these stories now if Mitt Romney, the former Governor of Massachusetts wasn’t a possible Republican contender in the 2012 Presidential election. What Obama Care may eventually bring us is a resurgence of questionable home remedies as doctor services become a game to see who can survive the wait, but this is the kind of progress that Progressives bring to everything.

Paul

Is the Healthcare Bill Constitutional?

Is the Healthcare Bill constitutional? This may well be the most important question ever asked in the United States and many of those States are asking it. The premise dictated by Congress is that they derive their authority to enact the Healthcare Bill through both the Supremacy Clause that states that Federal Law supersedes State law and the Commerce Clause that gives the Federal government the authority to regulate interstate commerce.

The argument in favor of the Supremacy Clause is a moot point if the law that Congress passed is found to be unconstitutional. Since the Healthcare Bill relies heavily on the funding accrued through a mandate that every American must now buy healthcare insurance, the obvious question is what actually constitutes commerce? The Congress has obviously mistaken their need to mandate that all Americans purchase health insurance to fund their program with the constitutional authority to mandate that all Americans purchase health insurance. Since the Healthcare Bill is an empty shell without that mandatory purchase, the Congress and the President are not likely to give this up easily.

So what is commerce? According to Merriam-Webster, commerce is: “the exchange or buying and selling of commodities on a large scale involving transportation from place to place”. Franklin Roosevelt broadened the definition of commerce during the Great Depression to facilitate government control of food prices. For this FDR used the argument that even the production of food products for personal consumption could disrupt the interstate price of those commodities. His rationale speculated that if too many people began growing their own foods, then the national price of food would be adversely affected, causing further economic harm. Since the nation was in a State of economic emergency, people were willing to try anything to stop the bleeding and Roosevelt got his way.

FDR’s interpretation of the Commerce Clause allowed him broad powers and he used them to create a multitude of new agencies that began the process of seizing powers that clearly belonged to the individual States under the banner of aggressively attacking the Depression and putting people back to work. Of course, the left loves to argue that is was those measure that saved the nation from economic ruin even though the enlightened and educated know that the Depression didn’t end until World War II destroyed every manufacturing center in the world except those safely located in the United Stated and the carnage killed and wounded more than 600,000 previously unemployed Americans; Americans that would no longer add to the unemployment rolls no matter what Roosevelt did.

More than seventy years later, the U.S. Congress is still using that perverse interpretation of the Commerce Clause to broaden the power of the Federal government even further. Today, as in Roosevelt’s day, for something to be considered commerce, an action had to take place and someone would have to buy, build, sell or grow something before we could claim that commerce existed. Now Congress wants to go even further and Congressional Democrats are struggling to make the case that since not buying insurance could adversely affect the commerce of healthcare, it may be lawfully regulated by Congress through the commerce clause. It was a stretch of the imagination and a violation of the Constitution when FDR claimed Congress had the right to regulate the actions of private citizens because those actions “might” interfere with interstate commerce. The idea that Congress can now regulate the inactivity of private citizens because that inactivity will interfere with a level of commerce that didn’t exist until Congress passed a healthcare bill that required the unwilling involvement of all US citizens goes beyond unconstitutional and could very well be criminal.

Why do I say criminal? Well, let’s look at the crime of extortion. Again, the Merriam-Webster definition says that extortion is: “the act or practice of extorting especially money or other property; especially: the offense committed by an official engaging in such practice”. Ok, what does it mean to extort? Merriam-Webster says that is: “to obtain from a person by force, intimidation, or undue or illegal power”.

The Healthcare bill dictates (forces) all Americans to purchase healthcare insurance. Failure to purchase health insurance will result in a fine (obtain money) of up to 2/1/2% of that persons income. The Internal Revenue Service (an official) will be responsible for confirming that you have adequate insurance and will levy and collect fines if you don’t (intimidation). Why did they use the IRS and not the massive new agency that will direct healthcare benefits and expenses? Because the IRS is the only Federal agency that can collect fines without proof of guilt or due process; forcing the afflicted citizen to prove his innocence rather than the government having to prove your guilt; a must in every other area of law.

Well, what do you know! The penalties and collection of fines established by the healthcare bill fits the definition of extortion perfectly! After all, the President and Congressional Democrats were clear that this was not a tax or else the President would have broken his promise of not imposing a middle class tax increase. Even if they called it a tax, Congress only has the Constitutional authority to raise taxes to pay the bills of the Republic and to provide for the defense of the nation but those taxes must be uniform and a tax only collected from those that do not purchase health insurance is certainly not uniform.

As with many things, once this finds its way to court the question of intent is bound to arise. Some unwitting Democrats have already provided us with the answer to that. Senator Max Baucus (D-MT) says the bill is meant to correct a maldistribution of wealth….and you thought this was about health. Speaker of the House Nancy Pelosi (D-CA) says it’s “more about diet than diabetes” indicating that they intend to use the bill to exert unconstitutional control over the general population. Representative Alcee Hastings (D-FL) invoked a quote from Thomas Edison during a meeting of the rules committee that “there are no rules here – we’re trying to accomplish something”. He then added that “all the Republicans are want to talk about are the people” as if a duly elected representative of the United States Congress can act without the consent of the governed and still claim constitutional authority. Even worse was the moronic statement made by Representative Phil Hare (D-IL) who said “I’m not worried about the Constitution; I’m worried about the thousands of people that are dying because they don’t have healthcare”.

It looks like the intentions have been clearly established here. Max Baucus wants to play Robin Hood, Nancy Pelosi wants to pick your lunch for you and I’m not sure how that squares with Alcee Hastings equivalent of one of the ruling elite saying “let them eat cake” in response to the unpopularity of the legislation. Bringing up the rear we have Phil Hastings that never even heard of the Constitution even though he swore an oath to support and defend it. And these are the people that want us to believe they have the authority to demand you buy insurance or else?

No, there is no constitutional authority for Congress to demand that you purchase a private product of their choosing for your personal use, using your money to purchase it. I’ve heard the left wing spokesmen on radio and television trying to equate this mandate with auto insurance. Well, there is a big difference. The insurance requirement is only mandated for people that choose to purchase a car for use on public roads (an act of commerce). There are no insurance requirements for vehicles that are operated solely on private property and there is no mandate for people that do not own a car to have to purchase insurance to help drive the cost down for those that do. The auto insurance mandate is required by the individual States, not the Federal government and anyone that has bothered to read the Constitution knows that the States and the people retain all powers not specifically given to the Federal government by the Constitution; including the right to regulate the operation of a motor vehicle within their respective States.

Paul

Is Heathcare Reform a Bolshevik Plot?

I was watching video of the speech the President gave on the economy that sparked his argument with Las Vegas. He began by saying “When times are tough, you tighten your belt. You don’t go buying a boat when you can barely pay your mortgage. You don’t blow a bunch of cash in Vegas when you’re trying to save for college.” I’m not sure why Las Vegas was so upset with that. I’m sure even the Mayor of Las Vegas would agree you spend vacation money in Las Vegas and not your kid’s college savings; but my interest really isn’t on his fight with Vegas. My interest is in the idea behind that paragraph and how it was directed at the American people.

The United States now has a National Debt of over twelve trillion dollars and the White House’s own budget estimate shows a doubling of that debt over the next decade. When times are tough, you tighten your belt, you don’t jump into an ideological frenzy to pass sweeping reforms that will change the banking, healthcare and energy industries; especially when those changes will add trillions more in debt to the current estimates. Oh sure the CBO says the healthcare plan is budget neutral and the President claims it actually brings deficit reduction, but the CBO estimates are based on ten years of spending cuts and tax increases while only counting six years of expenditures. Great idea! I’m sure I could show some incredible savings if I could collect ten years worth of income and only pay six years worth of bills but I doubt I could sell that idea to the utilities, the supermarket or my mortgage company.

The primary reason why America is not buying the President’s healthcare plan is because we know it doesn’t make sense. We see past the shady accounting and know it’s not going to reduce the deficit. We know you cannot provide health insurance for thirty million more Americans, most of which would need subsidies, and still lower healthcare costs. We especially know that you can’t mandate new and expensive benefits that health insurers will have to provide, cap their rate increases and expect them to remain in business for very long. No, it doesn’t make sense unless that is the goal. It is no secret that Progressives have long wanted America to shift to a single payer, Universal healthcare system. Now it has even become an imperative for more moderate politicians as Medicare and Medicaid are about to bankrupt the Federal government. It is especially appetizing for States that have tried to enact public health insurance on their own like Massachusetts, Tennessee and Oregon.

No, healthcare reform isn’t about making health insurance more affordable for average Americans; it is about making healthcare more affordable for the Federal government and for the States that have tried to make it a local entitlement. While we are not currently discussing a Universal, single payer healthcare system or for that matter, a public option; this plan is crafted to bring us to that point in time. As health care insurers are driven out of business, the Federal government will “have to” step in and offer a public option to shore up the exchange. Of course, since the public option is the only one that will be federally funded, it will be the only one that survives the mandates and price controls leaving us with a single payer system by default. With all Americans forced to buy into the government plan every penny that America spends on healthcare will be funneled into the Federal entitlement machine for distribution. With all that money I’ll bet they can keep the new system afloat for twenty years before they have to start rationing care or denying services.

I am sick to death of hearing the President and his Progressive friends talk about how health care is now a right. Food is a far more basic need but somehow, we are not all being forced to buy into a government food plan. The same can be said for clothes, housing and utilities but somehow we have avoided all but meager assistance programs for the very poorest. If you live in a rural community without mass transit, couldn’t a car be considered a basic need and therefore, a right? I am dead set against the Federal government, or any government providing “rights” for me. The Constitution was not meant to provide my rights; it was meant to protect my rights from government interference. The founders understood that any rights created by law could be as easily taken away by the same legal process.

The President stood before the cameras at his January meeting with Congressional Republicans, criticizing them for portraying his health-care plan as “some Bolshevik plot” and telling the public that he is “doing all sorts of crazy stuff that is going to destroy America.” Obama also refutes the charges that he is a Socialist but the one thing I’ve learned about the man is that he is not so much a liar as he tells selective snippets of the truth. For instance; just before the election he declared that we were “five days away from fundamentally transforming the United States.” While some would think that this was simply campaign rhetoric, I knew that he not only meant what he was saying but since he never mentioned his views of “fundamental transformation”, people would not be getting what they thought they were voting for. Never having mentioned what the transformation would consist of, he neatly avoided a debate on the substance of change.

I believe Obama when he stands tall and says he’s not a Socialist and that his healthcare plan is not a Bolshevik plot. Obama is a Progressive but if you have read anything about Progressive goals, they are identical to that of Socialists. The major difference between Socialists and Progressives is that Socialists force change through revolution while Progressives use subterfuge and strategy to bring about an incremental, evolutionary change in the political structure. If the strategy is properly applied, the changes cannot be reversed without causing severe hardship to those who benefit from the programs; creating what is in essence, a sacred cow that no politician would dare challenge. Does that sound like Social Security or Medicare? You bet it does. The transformation of those programs into the leviathan they now are was gradual and intentional. Now that so many rely on them there can be no conversation on whether or not they should exist. The only conversation we are allowed to have is on how to sustain them.

Healthcare a Bolshevik plot? This was a clever method of defining and directing the argument by the President. He didn’t deny it was a plot; he intentionally said it wasn’t a Bolshevik plot knowing that Stalin had essentially declared that the Bolshevik Party no longer existed in 1952. It’s not even a Communist plot. It is a Progressive plot based on the strategies of Saul Alinsky. In Saul Alinsky’s “Rules for Radicals” he cautioned that revolutionaries don’t stand out and scream about their plans…they wear suits and ties, speaking in a voice and in terms that would be accepted by the middle class. They don’t engage in a battle over agenda, they control the terms of the discussion so they can extract the answers they need to move forward. Most importantly, that the end goals are never disclosed, only the incremental steps that must be accepted by the public to achieve those goals. You have to admit; that sounds like a brief summary of the healthcare debate that has been raging for over a year.

Only the radical lefts like Van Jones, George Soros, Bill Ayers and Andy Stern have been shouting from the roof tops. They feel the time for extreme change is now; that the President should abandon Alinsky theory and force the agenda through while he has the votes and momentum to get it passed. They all know what the goal posts are and since the Democratic Party is already controlled by Progressives, they believe the President should forget about making short strides and just go for the touchdown before America has the chance to elect the road blocks to stop it.

Paul

What is the Real Goal of Healthcare Reform?

There were angry people yelling out against the healthcare bill at town hall meetings and the House passed it in a rare late night, weekend session of Congress. There were massive protests against the healthcare bill in Washington DC and at every Senator’s local offices all over the country. Despite these protests, the Senate still passed the bill in another late night, weekend session of Congress. The approval rating for the President and the Congress have plummeted in response to those votes and they still vowed to proceed. Democrats lost major elections in New Jersey, Virginia and Massachusetts with the election of Scott Brown being a clear referendum against the healthcare bill and the President still stood before the nation at the State of the Union Address and said they must push forward on healthcare. The polls in favor of the healthcare bill are an abysmal 37% and now the Senate wants to use the legislative trick of reconciliation to move it through with a simple majority. The real question is why?

If this were a simple matter of providing affordable healthcare for all Americans or just fulfilling the promise to cover the thirty million Americans that reportedly cannot afford healthcare insurance, most of the people trying to move the legislation forward would have given up when the tide of public opinion began to disfavor the bill. Instead, the President and Progressive Democrats have showed an obsessive resolve to pass this massive 2700 page bill even though the American people have made it clear that the 2010 election will be used to punish anyone that votes for it.

The truth is this bill will raise the cost of insurance for everyone that currently has insurance. There are an enormous number of new taxes that will be raised on everything from medical devices to cosmetic surgery; tanning salons to high cost health insurance plans; high wage earners and even additional payroll taxes. There will be a half a billion dollars cut from Medicare not to extend the life of the program, but to fund an expansion of Medicaid to cover millions more that cannot afford healthcare coverage. While our Presidential master of semantics says there are no mandates for business in his compromise plan there will be a fee assessed on any business whose employees receive assistance through the insurance exchange. In fact, if a company has a combined payroll of more than $500,000 and if only one of their employees receive Federal assistance to purchase insurance through the exchange, a fee of up to $750 is assessed for each and every employee of that company.

This isn’t about healthcare coverage or people without insurance; it is about money and control. As we discussed yesterday, Social Security, Medicare and Medicaid already consume forty percent (40%) of the current Federal budget. The current increases plotted through the near future show that this level of spending cannot be maintained through 2019 without bankrupting the United States. Our government has neither the political will nor the backbone to scale back Federal entitlement spending so they really have only one other option. That option is the healthcare bill.

They couldn’t get the bill through the Senate with the dreaded “public option” so they crafted a plan to create an exchange where people could purchase competing private healthcare plans. Of course they could have just removed the Federal prohibitions that prevent these same companies from competing nationally but then the plan would fall apart. The plan is that the new mandates that will be imposed on private insurance to eliminate restrictions on pre-existing conditions, life time coverage limitations and expanded well care provisions will dramatically increase the cost of private insurance. The government also wants to create a regulatory board that will place limits on how much private insurance can raise the cost of premiums. The combination of mandates and price controls will severely impact private insurance companies driving them out of the exchange or out of business altogether.

Of course you can’t have an exchange if there are no participating insurance companies and the government will just have to create a publically funded national insurance option to fill the gap. As insurance companies are slowly squeezed out of existence this public option will, out of necessity, become the only option and America will have been duped into accepting a European style Universal healthcare system because nothing else will exist. All of the resistance against Universal care will have been neatly euthanized by legislative trickery and Progressive subterfuge.

With the eventual adoption of a Universal healthcare system, all of the money currently spent on private healthcare in the United States would then pass through the Federal entitlement machine first. This new revenue stream will help conceal the depth of imbalance in the government entitlement structure. Medicare, Medicaid and Social Security were all created by the Progressive movement to do an end run around the Constitution and create the strong central seat of control that the founding fathers had feared. Knowing the dangers of centralized leadership, they specifically denied all but the most basic powers to the Federal government. Since the days of Teddy Roosevelt, Progressives have largely ignored those constraints using legislative loopholes and the allure of entitlement largess to coalesce powers the Federal government was never meant to have.

Social Security was targeted at a relatively small segment of the population when it was conceived in 1935 and was sold to America as a minor tax of just over 1% to help provide security for the elderly. We were a compassionate people and who wouldn’t agree to that? Of course we now know that the passage of this Act was just the starting point and that FDR intentionally funded it through weekly payroll contributions rather than a new tax or surcharge, just to give Americans a false sense of ownership; ownership that would prevent future law makers from dismantling Social Security later. Today, Social Security has transformed into a burdensome program that has expanded in cost and scope well beyond what was promised to America to gain support and passage. It was the benign benevolence of Social Security that was used as the shining example to gain passage of Medicare and Medicaid thirty years later and now these programs are being used by Congress to claim the authority to seize control of the entire healthcare industry.

Despite the 1965 assurances that the cost of Medicare and Medicaid would remain a relatively low portion of the Federal budget, these programs have assumed massive proportions and threaten to consume most of the Federal budget within the next 10 years. Federal meddling in the free market has created a monster that has disrupted the normal flow of healthcare dollars. As the government sheds more of the fiscal responsibility it promised to seniors and the poor on to the doctors and hospitals that must provide that care, those providers then shift the cost to private insurance and to those that can afford a fee for service.

Our law makers are not pushing this hard for healthcare reform because of a sense of duty to the average American, they are pushing because it is the Federal government that created the crisis and they need this legislation to provide them with the financial cushion they hope will give them a little more time to figure out what to do about it. Like a drug addict, Congress doesn’t believe their habit is the problem; it is the lack of money to feed their habit that is the problem. Only the United States government could be bold enough to say that the solution to out of control spending is even more spending; that the problem wouldn’t exist if they started with a larger program than what we have today.

Nancy Pelosi said in an interview Saturday that this was too important to let fail and that members of Congress would have to show the same “courage” used to pass Social Security, Medicare and Medicaid. In essence, she was asking members of her own Party to sacrifice their careers for this “noble cause’. To Progressives, this is critical. They have been on a slow march to total control over the lives and actions of America’s citizens for the past hundred years. They had nearly achieved their goals through healthcare reform and cap and trade but now both are crumbling before their eyes.

The healthcare bill represented more that money to them; it represented an unprecedented amount of government control over your life. So many things could be done under the guise of healthcare from directing diet, exercise and even gun control. Don’t forget, that Progressives believe that only the elite can make informed decisions and the average American is ill equipped to make those choices for themselves and needs to be nudged and guided to a better life. The key to government control is in buying the apathy of the American people. As long as most believe they are getting something for nothing, anything is possible.

Even if this bill fails, beware. Progressives have never taken no for an answer. Just as the EPA is threatening to enact key provisions of cap and trade through regulatory action without the consent of Congress, key provisions of the healthcare bill will be tucked away and hidden inside other spending bills and future budgets. Expect that the Department of Health and Human Services and the Social Security Administration will try to do the same with healthcare. If they can’t get this through the front door, they will try to sneak it in piece by piece through the window if we are not vigilant. Unfortunately, a free society cannot coexist with the socialization of basic needs. For any government to state that medicine, food and housing are all rights that must be provided for, they must first assume enough control to make all of those choices for you. So the real question is….is this the America you want to leave to your children?

Paul

What is the Crisis with Healthcare?

Years ago, when I lived in Ozone Park, New York, there was a local auto glass company that did fairly well in that area. There was always an element of vandalism one could expect in New York City and there were always kids playing ball in the streets which would invariably lead to a stray home-run breaking a windshield or two. Rarely did a day go by when there wasn’t a window broken here and there in the neighborhood and a local auto glass installer was a convenient fix for people on the go. Quite suddenly, the incidence of vandalism rose sharply and for a period of months, someone would target two or three blocks during the night with a BB gun and knock out 10 or twelve car windows per block.

Ozone Park was semi-famous back then as the location of the “Bergen Hunt and Fish Club”, one of the popular hang-outs of the notorious mobster, John Gotti. Someone overheard an employee of the local auto glass company bragging about how much business they had gotten from all the broken windows in the neighborhood and a few of the local tough guys put two and two together. Mysteriously one evening, the auto glass company burned to the ground in what was called a “suspicious fire”. Just as mysteriously, the crime wave of auto glass vandalism vanished for good.

Ok Paul, that was an interesting, if not amusing story but what does that have to do with the Healthcare Reform bill that has been making headlines for the past year? What if I told you that the current spike in healthcare insurance premiums were not caused by evil profiteering insurance companies? What if I told you that despite government claims of windfall profits that health insurers, as an industry, have a profit margin of less than three and a half percent (3.5%)? What if I told you that Medicare, Medicaid and government regulations are actually to blame for the spiraling costs of healthcare in this nation? Would that story have a little more relevance then?

Medicare and Medicaid were enacted in 1965 under the Johnson Administration as part of his “Great Society” initiative. The rationale for Medicare was that senior citizens were finding it difficult to afford private healthcare premiums on a fixed retirement income. Medicaid was similarly included to give the poor access to healthcare that would have ordinarily been out of reach for them. The fixed income argument for senior citizens was valid but not the whole story. Since America passed the Social Security Act in 1935 under FDR, a growing number of citizens failed to invest in private retirement programs because of a false sense of “security” this national safety net had given them.

In recently disclosed documents it was found that FDR only included the individual contribution mandate in Social Security so that future politicians could not dismantle the program later. After all, if people paid into it, then you cannot lawfully take it away from them without compensating them first. What he unwittingly did was create a thought process among the citizenry that these same individual contributions had taken the place of any contributions they could make into private retirement accounts. “Why pay twice?” became the general mindset of the public. We now know that because of numerous amendments to the Social Security Act as part of the “great society”, that a great many program expenses were added such as survivor’s benefits and disability benefits; expenses the system was never designed to incur.

Social Security was designed to provide a safety net for those Americans whose incomes would not support retirement savings and lived beyond an age that they could reasonably be expected to work. It was insurance but unlike life insurance, it was insurance that the government gambled that you would never collect. The age at which benefits could be collected had been arranged so that the age of retirement was nearly ten years older than the average life expectancy in the United States. The few that beat the odds would have a rich pool from which to draw a subsistence level of income if they had been unable to save for retirement in their youth. Well, the average life expectancy rose and while there were some adjustments in the age of retirement, they simply did not keep pace with the outlays of the program.

So now we have a large group of seniors drawing on Social Security as their only means of income and of course, by 1965, were unable to live on that and pay for healthcare insurance. Progressives like Lyndon Johnson could only see the solution in another large government program. Rather than offer assistance to seniors to help those that could not afford insurance to purchase it, he devised an enormous single payer healthcare system that would provide all seniors with medical care at affordable rates. He also enacted the single payer counterpart to Medicare for the poor but of course, the government couldn’t foot the whole bill for that so it became a shared responsibility between the Federal government and the individual States.

In 1965, the projected government costs for these programs were a measly nine billion dollars over ten years but by 1968; they were both over budget and in danger of collapse. In response the government would do something that only governments do. They raided the Social Security trust fund and placed Social Security on the Federal budget and into a massive new program that included Social Security, Medicare and Medicaid. The best minds knew that this was little more than a temporary fix and as the baby-boomers reached retirement age, there was no way the government could afford to repay all of the IOU’s they just stuffed into FDR’s “sacred trust” and meet the obligations of Johnson’s Great Society. So what…right? They would all be out of office and possibly dead before it all fell apart but for now, they were heroes.

Today, Social Security, Medicare and Medicaid represent nearly forty percent (40%) of the entire Federal budget. As the Federal government struggled to meet its other financial obligations and keep these social programs afloat they turned to massive deficits and have incurred an enormous National Debt in the process. In the creation of Medicare/Medicaid, the government failed to adequately forecast the innovation in medicine that is synonymous with vibrant economic conditions in a free society. In 1964, there were no advanced diagnostic procedures and no such things as MRI’s or Cat Scans; there were no transplant surgeries and there certainly was no definitive studies on nutrition or well care that would keep people and healthier for far longer periods of time. Costs for medical care climbed because the care was better and the outcomes were healthier so people lived longer.

Through Medicare and Medicaid, the Federal government now pays more than fifty percent (50%) of all the medical related expenses in the United States. In an effort to reduce their own costs they have systematically capped payments to doctors and hospitals and have reduced their reimbursements to the States for their portion of the shared burden of Medicaid. They passed legislation for indigent care which makes it unlawful for hospitals to refuse emergency treatment solely on the ability to pay and have ignored most of the financial burden associated with that mandate; leaving up to the hospitals and the States to absorb the impact.

Of course hospitals and doctors can only absorb so much and what they have had to do is recalculate their fee structure to offset the losses. The reduction of Federal reimbursements and the imposed caps of the costs of services for Medicare and Medicaid patients have forced care providers to pass those shortages on to someone that will pay….private insurance companies. Does anyone hear glass breaking yet? With an average profit margin of 3.5%, insurance companies had to raise their premium rates in response to the increased cost of care or go out of business. That has made insurance nearly impossible to obtain and yes, even led to the draconian practice of lifetime benefit caps and the denial of pre-existent conditions.

So what came first; the chicken or the egg? While it may not be intentional “vandalism”, it is clear that the meddling of the Federal government through their nearly fifty year experiment of socialized medicine bears the lion share of the blame. Of course, since we have become a society that relies on insurance or government to pay for our healthcare costs, we stopped asking questions like “How much does that cost?” or “Do I really need this?” We need to ask what we expect from insurance. Do we want insurance to cover every aspect of healthcare and if so, we need to realize that it is no longer insurance but pre-paid medical care and that is going to be extraordinarily expensive no matter who provides it. If we want catastrophic insurance that would keep us from going bankrupt should the worst happen, that will cost far less but we will have to pay for our own doctor visits, examinations and yes, even our own medications.

Tomorrow we will examine why the Federal government is so insistent that you need this massive 2,700 page healthcare bill and why it looks like they are not going to take no for an answer.

Paul