Wednesday, June 17, 2009

ObamaCare's Fatal Flaw

Reforming health care is next on Barack Obama’s agenda. Doing so will be difficult—any meaningful health care reform would be a massive project, and would be massively expense. And as Bill and Hillary Clinton found out, health care reform is a tricky thing—attempting to implement universal health care was a disaster that marred Clinton’s first term.

And health care is a very divisive issue, one that not only drives division between parties, but also within them. There have been significant disagreements about the proper health care plan among Democrats, and there is no cohesive outline for the overhaul even within that party. And, of course, Republicans are solidly opposed to any additional public health insurance.

There are many reasons Republicans oppose Obama’s plan. One is the cost—the original plan would have cost $1.6 trillion over 10 years, and while lawmakers are trying to get the cost under a trillion, the price will still be very great. Others oppose the bill for ideological reasons—they believe that the state should minimize its involvement in private life, and government run healthcare would be a too-big intrusion into the private sector.

Another reason to oppose government run healthcare is that it is unnecessary. America is the only developed country in the world without universal health care. Yet American life expectancy is only slightly lower than countries with universal health care. That stat is more impressive when you consider how poor American health habits are—most Americans are overweight (about two thirds), and many smoke (about a quarter) or take drugs. And still, American life expectancy does not differ in any significant way from health rates in other developed countries.

And, of course, even if government run health care was everything its supporters claimed it was, it has drawbacks. If the free market doesn’t run the health care system, then there will be some form of rationing—some treatments will be harder to find, or have longer wait times, than others, regardless of the patients ability to pay.

All those are compelling reasons to oppose government run health care. But there is another reason to stand against it. Assume that Obama’s plan works—it reduces health care costs, it cuts down on insurance premiums, and improves general health and life expectancy. It would still be a bad idea. Because it would only be as strong as the federal government’s balance sheet.

Take Social Security. It’s worked pretty well for a government program—people put in their money, and get it back when they retire. It depends on some dubious assumptions (the largest such assumption being the idea that there will always be more workers entering the workforce than leaving it), but so far there have been no major problems with it. In fact, for a government program, it has run pretty smoothly.

The problem is, it’s not substainable. Experts estimate the Social Security will run out of money around 2040—about thirty years from now. Presumably, the federal government will take some measures to stave off the collapse, but whatever happens there will probably be a great many people who will have to expensively reconsider their retirement plans.

It is much the same situation with Medicare, except the doomsday date is around 2020. Congress is already trying to figure how much of Medicare it can cut, which should probably worry some of those dependant on it.

Supporters of government run health care should consider these cases. If the government is responsible for health care, what happens when the government can’t provide it? The situation would be far worse than before the government stepped in.

Right now, the U.S. nation debt is over 10 trillion dollars. The deficit for this year alone is over one trillion. The U.S. is in danger of losing its AAA credit rating. Given the fact that the federal government can’t pay off the obligations it has, is it wise to saddle it with more of them?


At June 18, 2009 at 2:46 AM , Anonymous SteveB said...

As I wrote on my blog today, this debate over health care may bring the moderates from both parties together in order to stop it.

At June 18, 2009 at 2:11 PM , Blogger BB-Idaho said...

Regarding "That stat is more impressive when you consider how poor American health habits are—most Americans are overweight (about two thirds), and many smoke (about a quarter) or take drugs."
..Europeans probably smoke more than we. A more impressive stat is that we pay double per captita compared to Europe, yet are less satisfied with what we get.
I stopped marching to big pharma/big insurance agitprop some time back. We have produced a system which makes money at the expense of patients....


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