Fast Track To Government-Run Health Care

National Review Online: Obama's Plan Would Sow Seeds Of Destruction For Private Insurance

(National Review Online)  This column was written by James C. Capretta.

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In describing the health-care plan of the presumptive Democratic nominee, Sen. Barack Obama, reporters invariably parrot the campaign line that he would build on, not replace, today’s dominant employment-based system of private insurance. This is reassuring to those millions of voters who see the need for reform but are generally satisfied with the coverage they get today. Unfortunately, the Obama spin is nothing more than that. In truth, the Obama plan would sow the seeds of destruction for private health insurance, whether provided by employers or offered on the open market.

Fortunately, voters will not have to rely exclusively on information from a swooning press corps and the Obama propagandists for the duration of the coming campaign. There are, and will be, more rigorous assessments by outsiders of what the Obama plan would really mean, financially and otherwise. Indeed, a partial assessment of an Obama-like plan is already available - financed by an Obama ally, no less. Tellingly, even it points to the inescapable bottom line: Obama’s plan would put the country on an irreversible fast-track to government-run health care for everyone.

The Commonwealth Fund, a New York-based philanthropy, has a well-deserved reputation as a very deep pocket for left-leaning health-policy initiatives and research. Chances are, if a new study supports an expanded government role in health care, Commonwealth Fund money made it happen.

Recently, three Commonwealth executives - Cathy Schoen, Karen Davis, and Sara R. Collins - published a proposal to rework health-insurance arrangements in the United States. The plan is of special interest because it is indistinguishable from the Obama plan in its basic design.

First, the Commonwealth executives, like Obama, would impose so-called “play or pay” on America’s employers. All U.S. businesses would either have to organize coverage for their workers and finance a portion of the premium, or pay a tax - seven percent of their payroll - to the federal government to offset the costs of enrolling workers in government-organized insurance.

Second, they, like Obama, would have the federal government establish a new national “insurance exchange” for small-business workers and individuals who don’t get coverage through a job. The government would impose heavy regulations on participating insurers, including mandatory benefits and limits on the range of premiums they could charge to different enrollees.

Third, and most importantly, both the Commonwealth executives and Obama want to initiate, as an additional option in the insurance exchange, a new publicly run insurance plan, modeled on Medicare. With this option, the federal government would act as the insurer, collecting premiums from enrollees to cover the cost of paying health-care claims on their behalf.

This public-insurance option is the crucial pivot upon which these plans, and others like them, tilt toward a government takeover. The Commonwealth executives make it clear that the new publicly run insurance would import Medicare’s arcane and elaborate rules for paying hospitals, physicians, and other providers. These payment rates are not negotiated with the suppliers of services; they are imposed by the federal bureaucracy on a take-it-or-leave-it basis. There is no efficiency gain or improvement in the quality of care. Rather, the government simply fixes payments at below-market rates. In time, such actions always lead to constrained supply and frustrated demand.

Private insurers, of course, also try to control costs, using whatever levers are at their disposal. They can’t dictate fees for doctors and hospitals, but they can try to steer enrollees to a limited number of preferred providers, to whom they promise volume in exchange for lower prices. Many also try to manage care for the most expensive, chronically ill cases, sometimes to the great frustration of patients and doctors. And they usually require patients to pay at least some of every bill to provide a financial incentive for thinking twice before using services.
But even the most aggressive, cost-cutting insurers are no match for a government determined to use its sovereign power to set prices and shift costs to others. An analysis accompanying the Commonwealth executives’ plan, produced by consultants at The Lewin Group, estimates that the public-insurance option could charge premiums 30 percent below what an average employer plan cost in 2007. Such a premium differential would have dramatic implications in the marketplace. Lewin estimates that, of the 60 million small-business workers and others getting their insurance through the national “insurance exchange,” 40 million would choose to enroll in the new public insurance option because of its lower cost. This would effectively double the size of the population covered under Medicare payment rules. The Commonwealth executives also propose expanded enrollment in Medicaid and the State Children’s Health Insurance Program (SCHIP), adding another 12 million Americans to public programs.

Once in place, the momentum toward the new public-insurance option would be impossible to reverse. Large employers might, for a time, continue playing rather than paying as a service to their workers. But with each passing year, the premium differential between private plans and the public option would grow and induce additional migration from private to public insurance, which, in turn, would increase the government’s ability to impose lower prices, further widening the premium gap. It would be just a matter of time before all employers abandoned the effort to compete with a monolithic government-run plan.

If the only consequence of such a shift in power were lower premiums, many analysts and ordinary voters would cheer on the change. But, of course, government control brings government bureaucracy, inefficiency, and heavy handedness. The tragedy is that price controls are only effective if they control and limit the supply of services. In time, that means waiting lists and other barriers to accessing care, along with skyrocketing costs to the taxpayer. That’s the true bottom line of the Obama plan.

[saintmaker52]

So, where is the bad news for uninsured or underinsured folks in the real world?

You just described the health plan that a majority of Americans want. Let the rich folks keep their private insurance and let the rest of us have something we can afford...even if it''s not perfect.

[noloyalisti]

Are we actually considering joining the civilized world? Or are we to remain a 3rd world country?

[lisaew54-2009]

When are we going to have a healthcare plan for everyone? I say its time we got rid of insurance and went to the universal plan.

[noloyalisti]

These right wing corporatists make this sound like a BAD thing. It''s good that every time a conservative gives their opinion it all out there to just see how ridiculous their ideas are. Keep up the good work NRO!

[ubrew12]

National Review Online: ''Obama''s Plan Would Sow Seeds Of Destruction For Private Insurance''

good.

[monty_4]

Would speed up the destruction of private health insurance? I''m all for it...take those useless HMOs with it.

[wooleywews]

With the amount of taxes needed to support a national health care plan, you will not be able to afford it. One way or another you and I will pay for Health care. The cost will be in insurance payments to a more efficient private insurance program or payments in taxes to an ineffective government program, either way you will pay. If the cost is passed on to businesses, then the prices of the products/services that are produced will increase to off-set those increases in taxes on business. So, through premiums, taxes, or prices you will pay. Any politicians promising health care that is free or affordable is not telling you or me the complete truth.

[Razzl]

Private employer-provided health insurance has already been dead for over twenty years, since large corporations began to abandon it in the early ''80''s claiming the costs made them "uncompetitive" in the world market. The system we have today is no system, only a handful of companies buy meager insurance and the rest let their employees go without. The conservative commentator Pat Buchanan put it best when he said that corporations have to decide whether they will provide health insurance or pay taxes to the government to provide it, but it must be provided. Obama tries to build bridges by not annoying the free-market conservatives who pretend choice is an issue, but to those of us in the vast public who have no choice, our choice would be to kill this phony system and replace it with a solid, massive, universal, well-funded government health system that everyone has access to according to their need and pays according to their means. Nobody but nobody will shed a tear for losing "choices" they never had the money for anyway. The Republicans have held power for 30 years and have shown they will never act on this issue, so they lose any right to opine on it...

[marksnoopy]

A friend of mine was visiting in Europe where they have national health insurance. It waited an entire day in a hospital emergency room to see a doctor, and then what the doctor prescribed was a waste of time (told him to gargle salt water). My friend said he wasted an entire day to see a doctor who did nothing to provided treatment (He basically had strep throat) . He didn''t get treatment until he returned home. Can''t hardly wait to see how patient Americans are when National Health Insurance comes to our neighborhood.

[wooleywews]

So how much does someone pay? If someone could research how much was paid in insurance premiums, out of pocket purchases, business medical expenses, the total amount paid out by government health programs, etc.... Total paid in medical expenses. Then lets divide that by 300 million people living in the U.S. This could give us a rough estimate of the per person cost.

[wooleywews]

In 2007, total national health expenditures were expected to rise 6.9 percent %u2014 two times the rate of inflation.1 Total spending was $2.3 TRILLION in 2007, or $7600 per person.1 Total health care spending represented 16 percent of the gross domestic product (GDP).
I found this @ http://www.nchc.org/facts/cost.shtml
So a family of four would pay or have someone else pay $30,400 a year.

[bluestardad]

WE NEED TO GET THE INSURANCE COMPANIES OUT OF HEALTH CARE!

AMERICA NEEDS HEALTH CARE

NOT HEALTH INSURANCE

THE MEDICAL INDUSTRY NEEDS TO CURE SOMETHING ANYTHING...AND QUIT MAKING MONEY ON TREATING ILLNESS!

[feelfree4u]

Re: "Obama''s Plan Would Sow Seeds Of Destruction For Private Insurance"

That is an admirable goal, to be sure, but I still doubt that I will vote for him.

[eskieville1]

Destroy private health insurance? WONDERFUL!

[wooleywews]

In 2007, total national health expenditures were expected to rise 6.9 percent %u2014 two times the rate of inflation.1 Total spending was $2.3 TRILLION in 2007, or $7600 per person.1 Total health care spending represented 16 percent of the gross domestic product (GDP).
I found this @ http://www.nchc.org/facts/cost.shtml


So a family of four would pay or have someone else pay $30,400 a year.

[mibrooks27]

The reason Toyota located their new plant in Canada was because of the high and unpredictable health costs for employees in this country. Health care expendatures account for 18% of GNP. No other country on the face of the earth even spends 5% of GNP on health care and countries with genuine single source, single payer systems like Sweden, Denmark, Norway, Iceland, Germany, Austria, etc have care that is far superior to ours. Mishmash public-private systems like those in Canada and the U.K. provide superior care to the very wealthy and lousy care for everyone else. The answer, thus, is very clear - do away with private health insurance companies. They do nothing except enrich speculators and investors in that commodity market anyways. Get rid of them. Replace this with a Scandinavian style health system. The savings could balance the federal budget in under 12 months. It is estimated that by 2012, 2/3 of American households will not have health coverage provided by their employers (unless they are public employees.... public employees ALWAYS somehow manage to get benefits that none of the rest of us even dream of - but I''ll be you a dollar there is a backlash that cuts back their benefits, too.).

[it_oldtimer]

I am actually all in favor of the total destruction of the private insurance industry! It''s just a racket!

The private insurance companies charge obscene prices for the most minimal coverage, if they''ll cover you at all, and then they routinely refuse to pay out on claims while simultaneously canceling your policy and blacklisting you so others won''t cover you either.

[feelfree4u]

wernet2,

Re: "Total spending was $2.3 TRILLION in 2007, or $7600 per person"

Assuming that your numbers are accurate, how much of that spending was profit for HMOs, which would vanish if they were cut out of the deal?

[feelfree4u]

IT_Oldtimer,

RE: "I am actually all in favor of the total destruction of the private insurance industry! It''s just a racket!"

Second!

[kranepool21]

Surgeons have to study work till age 33 or 34 before they start earning some $$$....also IF WE ARE TO HAVE A GOV''T RUN HEALTHCARE PROGRAM THEN THE RIDICULOUS LAWSUITS MUST STOP.....LAWSUITS TAKE UP 6% OF GDP AND MANY ARE FROM THE MEDICAL WORLD..John Edwards has 30 million cause he went after OBGYN people......there has to br a cap on what lawyers get and what awards are...oh that is the free market you say? then we will keep the free market in healthcare and many will have none...I don''t want to be selfish but I realize with a national plan my care will go down as I share with others who don''t get care

But with a Congress who does not adress Social Security or Medicare I wonder how they will be able to attack healtcare regardless of what OBAMA wants

yet the head of the Stock Exchange (approved by the BOARD) was making 140 million a year!!!!!

we are all sinking as other nations rise some cept for the very wealthy

lawyers rule and the old saying what do you call a lawyer at the bottom of the lake(a good start)seems cruel at times it sums up one of the big problems with this country

[wogerwabbit]

We may not know the cure, but we know the healthcare system is sick... some of the symptoms are fairly obvious. For instance, Insurers and Big Pharma are choking on dollars while we, along with most doctors and healthcare workers, are getting screwed. No matter what the neocon nitwits say, industries do not regulate themselves according to market demand, they engorge themselves on our flesh when the government protects them and not us.

[hungry1968]

Yep, sounds like a demobrat will get a shot at what''''s left of my wallet for all the dead beats without the will or means to get insurance.

Posted by maxify55 at 09:14 PM : May 28, 2008





What if someone looks for a job with insurance, but can''t find it, and has to take a job that doesn''t offer it?

Is he still a deadbeat?

In case you didn''t know, more and more companies ARE NOT offering health insurance these days, due to the fact that it costs so much. And I''m not talking about little companies - I''m talking about new hires at GM, Ford, etc, etc.

People going through contract negotiations, are choosing better pay and benefits for themselves, at the sacrifice of new people being hired by their respective companies.

[ljb6599]

maxify55...EDUCATE YOURSELF!!UNIVERSAL HEALTH CARE IS NOT SOCIALIZED MEDICINE!!!!! IN A TRUE SINGLE PAYER THE GOVERNMENT PAYS THE BILLS AND THAT IS IT JUST LIKE MEDICARE. PEOPLE ARE FREE TO SEE ANY DOCTOR THEY WANT.DOCTORS ARE NOT EMPLOYED BY THE GOVERNMENT.WITHOUT PRIVATE INSURANCE MILLIONS WOULD BE SAVED BECAUSE THE OVERHEAD WOULD BE LOWER.INSURANCE COMPANIES WOULD NOT GO AWAY COMPLETELY.THEY WOULD SELL ADDITIONAL INSURANCE BEYOND THE BASIC PLAN IF PEOPLE WANTED IT.TODAY PEOPLE GO BANKRUPT IN THIS COUNTRY BECAUSE THEY CANNOT PAY THEIR MEDICAL BILLS.IF PEOPLE WOULD GIVE IT A CHANCE THEY WOULD SEE THAT THEY WOULD HAVE MORE MONEY IN THEIR POCKET BECAUSE OF HEALTH CARE SAVINGS.IT IS TIME TO TRY SOMETHING DIFFERENT! THE CURRENT HEALTH CARE SYSTEM IS GOING TO BANKRUPT US ALL SOMEDAY!!

[feelfree4u]

Mr. Capretta,

Any thoughts?

###

"Neo-Cons Silent on Hagee Repudiation by McCain"

"One would have expected at least some debate among neo-conservatives about last week%u2019s repudiation of Christian Zionist Rev. John Hagee by Sen. John McCain, but the silence to date has been positively deafening. Virtually nothing has appeared in the National Review Online, and nothing at all in Bill%u2019s Kristol%u2019s Weekly or Daily Standard."

www.ips.org/blog/jimlobe/?p=149#more-149

[andor3]

" [...] will get a shot at what''''s left of my wallet..."
and why not? you earned it on their backs why should they not take back what is theirs?

"Do you people really think that the wealthy are going to go to the same doctors the rest of us..."
The wealthy have their own doctors now. The current broken, for-profit, insurance company scam system "ensures" that happens. I have insurance, and my insurance company fights me every time I try to see my regular doctor.. they try to send me to an over worked, incompetent prescription mill doctor.

"Just where do you think all the quality doctors from Canada practice? They practice right here, ...''
Nope I know good doctors leaving the US to practice in Canada. Why? because they system here is too broken, too much paperwork, too hard to bill, and the doctors and patients both get the shaft while do-nothing insurance companies profit the money that should go to both.

Government run health care? Single payer? bring it on... anything is better than the for-profit monstrosity we have now.

[babooph]

With the US bribe system of govt.,the lobbyists are set to force all to buy insurance from the crooked ins. co.s Bend over Americans your policy is coming!!

[incog-nito]

ALL Western countries except the U.S. have "government-run" healthcare, and they''re doing quite well, thank you.

[horse3farm]

I say cap the rates doctors can charge...nationwide. Might that not lower everything? It seems to me the doctors are the major factor in costs of healthcare.

[mcvet]

I say cap the rates doctors can charge...nationwide. Might that not lower everything? It seems to me the doctors are the major factor in costs of healthcare.


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Posted by horse3farm at 03:53 AM : May 29, 2008
+ report abuse

Yeah that''s going to help a lot... we have a SHORTAGE of them NOW!! LOL Someone has got to explain to me WHY we pay TWICE as much in this nation to provide Health Care for our citizens than ANYONE else and get far less. They don''t pay their doctors less or put caps on anything EXCEPT Insurance COMPANY''s! They took those people OUT OF THE LOOP. That''s the ONLY difference I can see.

[mcvet]

Posted by maxify55 at 09:14 PM : May 28, 2008

Oh now you are going to loose you member in good standing with your local Klan chapter! You failed to say SIEG HEIL!! Now folks you can continue to listen to these fascist who have for DECADES promised to "fix" this problem or you can find someone else to follow. The facts are there for anyone to see. AT NO TIME during a fascist Government has the number of people covered with Health Care gone DOWN, always UP. We watch as ALL Nations in the G-7 provide health care for ALL their citizens AND they do it for HALF the cost of our system. Staying the course IS NOT an option here... keeping a FAILED system is no answer! SIEG HEIL BUSH!!

[mcvet]

AT NO TIME during a fascist Government has the number of people covered with Health Care gone DOWN, always UP. We watch as ALL Nations in the G-7 provide health care for ALL their citizens AND they do it for HALF the cost of our system. Staying the course IS NOT an option here... keeping a FAILED system is no answer! SIEG HEIL BUSH!!




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Posted by MCVet at 07:06 AM : May 29, 2008
+ report abuse

That should be NOT covered by Health Care!!

[bluestardad]

AMERICA NEEDS TO GET THE INSURANCE COMPANIES OUT OF HEALTH CARE!

AMERICA NEEDS HEALTH CARE

NOT HEALTH INSURANCE

THE MEDICAL INDUSTRY NEEDS TO CURE SOMETHING ANYTHING...AND QUIT MAKING MONEY ON TREATING ILLNESS!

[bluestardad]

REPIGS MAKING MONEY OFF IRAQ!

By Aram Roston
Investigative producer
NBC News
updated 6:32 a.m. ET, Wed., May. 28, 2008


Aram Roston
Investigative producer


A little-noticed civil lawsuit in Florida is shining a light on an unusual but hugely profitable Pentagon contract to ship millions of gallons of aviation fuel to U.S. bases in Iraq through the kingdom of Jordan.

The deal involves a cast of influential characters, including the king of Jordan%u2019s brother-in-law, who is suing Harry Sargeant III, a top Florida-based fundraiser for Sen. John McCain''s presidential bid.

Sargeant is a Florida businessman and former Marine Corps pilot hailed by the McCain campaign as a "Trailblazer" for raising $100,000 or more in political donations. Through a company called International Oil Trading Co., or IOTC, Sargeant and a partner have a lucrative contract worth hundreds of millions of dollars per year to supply American military forces in Iraq with fuel, especially aviation fuel. The firm ships the fuel to Jordan and then trucks it across the border, where U.S. forces escort the convoys to air bases.

[presseyr]

"Private insurers, of course, also try to control costs, using whatever levers are at their disposal. They can%u2019t dictate fees for doctors and hospitals."

Uh hello, earth to Mr. Capretta. Who exactly do you think sets the rates for reimbursements, the tooth fairy? Doctors and hospitals are of course free to charge whatever they wish, but they will only be paid what the insurance company decides. Maybe you should try knowing what you are talking about. It is far better to remain silent and appear to be a fool than to speak out and remove all doubt.

[presseyr]

"Private insurers, of course, also try to control costs, using whatever levers are at their disposal. They can%u2019t dictate fees for doctors and hospitals."

Uh hello, earth to Mr. Capretta. Who exactly do you think sets the rates for reimbursements, the tooth fairy? Doctors and hospitals are of course free to charge whatever they wish, but they will only be paid what the insurance company decides. Maybe you should try knowing what you are talking about. It is far better to remain silent and appear to be a fool than to speak out and remove all doubt.

[cattlekate]

"The government would impose heavy regulations on participating insurers, including mandatory benefits and limits on the range of premiums they could charge to different enrollees."

This is already being done in the policies offered to Congress and federal employees. Obama''s proposal is to open up the massive federal pools to all people.

Sounds reasonable to me.

[terrapin78]

No!!!!!

It is McCains plan that would make health insurance unaffordable for many in this country.

[glady1930]

If the Insurance Congress has is good enough for them and other fed employees....it ought to be good enough for the rest of us. Same goes for SUPER DELEGATES. They are entitled to one vote...no more, no less, than the rest of us. The public is being crapped by politicians. Time it stopped.

[lochlan-2009]

"Obama''s Plan Would Sow Seeds Of Destruction For Private Insurance"

Sounds good to me. Can we go after the oil/energy companies as well?

[joyous88]

after we rid ourselves of the greed driven private insurance scam
why don''t we do the same with the national review, its

just another part of the conservative propaganda machine,

and Health Care for all? Hey, if socialized health

care is good enough for the president of the US, my senators, and my congressmen,

why is it not good enough for me?????

[terptime5]

Before we turn anything over to the government, name one thing, that the government is in charge of that is run well and effectively.

[incog-nito]

People don''t seem to realize that McCain''s plan will be a nightmare for most Americans. He wants people to buy individual policies instead of group. Anybody who has to do this will tell you it''s a nightmare, unless they''re very rich. With individual policies you DON''T have the protection against premium increase at any time, against being denied coverage for pre-existing conditions, against having your coverage dropped AFTER you have acquired a major or chronic illness. As bad as the current system is, McCain''s plan will be worse.

This alone is reason NOT to vote for McCain.

[fryedbread]

Sounds like great news to me. Thanks NRO! :D

[it_oldtimer]

@ Terptime5: "Before we turn anything over to the government, name one thing, that the government is in charge of that is run well and effectively."

- - - - - - - - - - - - - -

Anybody that would trust businesses or corporations to "do the right thing" is purely delusional.

The government, at least, remains accountable to the citizens; business is accountable ONLY to it''s shareholders.

Just look at the recent housing market collapse. Look at Enron. WorldCom. Bear Stearns. Banks. Insurers denying hurricane Katrina victims claims en-masse. Credit card companies routinely robbing it''s customers blind. The list goes on and on and the message is clear: DO NOT trust business or corporations - EVER.

Government generally does a very good job with it''s many huge responsibilities (Social Security, Medicare and Medicaid to name but a few). They sometimes look like they''re not being managed very well simply because certain political parties and administrations routinely rob their funds to pay for other things like tax breaks for the rich, and money for unnecessary wars. That''s not the fault of these government agencies so much as it''s the fault of greedy, short-sighted politicians and parties who come and go like the wind.

[jon2012-2009]

The fact is we pay for the most expensive health care system in the world but, among industrialized countries, this system delivers only mediocre results. The key difference is that our government does not run the health care system.

We have more than 40 million Americans without health care coverage and this number can only increase. But the high cost of health care is not only a concern among the middle class and the poor. American companies are hurting and losing global competitiveness because inflation in the cost of health care insurance is eating into the bottom line.

We can take the inefficiency out of health care by having a single-payer government-run system, in the process eliminating the middleman, the corrupt insurance industry.