Obamacare Will Make America Sick

Carol Platt Liebau
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Posted: Jun 15, 2009 12:00 AM

Perhaps the most revealing moment of Barack Obama’s presidential candidacy came in the ABC debate conducted on April 16 of last year. Charles Gibson asked the then-senator why he would possibly consider raising the capital gains tax rate, when doing so results in decreased tax revenue. Obama replied that he “would look at raising the capital gains tax for purposes of fairness.”

That same impulse toward social leveling is at work in the President’s health care plan. Advocates of Obamacare are pushing to achieve universal health care coverage by offering a “government option” for health insurance. That plan will eventually result in a health care system that is more “equal” in its treatment of all Americans, those with the means to pay and those without them – but the new, uniform standard of care will be much lower for everyone.

Here’s why. As with the current Medicare and Medicaid systems, under the “government option,” the government will simply decide what it will pay doctors, hospitals and other health care providers for labor, products or services. And that’s all the doctors, hospitals and other medical personnel will get, regardless of the actual costs or value of the services they offer to those in the government plan.

Right now, of course, a deficit exists between the cost of caring for those on Medicare/Medicaid and what the government will spend on it. Accordingly, those with private insurance simply pay more to keep the hospitals solvent and the doctors working. In other words, even after paying taxes, those with private insurance subsidize the government program yet again.

But if Obama succeeds in imposing a “government option” on America, the privately insured will be forced to pay even more to compensate for the government-created cost/payment shortfall as the rolls of those in the government plan expand. As a result, the cost of private insurance will ultimately become untenable. And then – there will be only government-administered health care for all.

Without privately insured Americans subsidizing Medicare and Medicaid, there will have to be another way to close the deficit between the cost of treatments and the below-market payments government offers for them. The answer, of course, will be health care rationing. Rather than the free market – or health care consumers’ economic and personal choices – driving the distribution of health care, the government will do it.

This prospect doesn’t seem to bother President Obama or many other Democrats – which makes sense, from their perspective. For powerful government officials, the plan would work well. Their political influence will guarantee that they (and their friends) will receive the finest treatment available under a government-run system.

For other Americans, however – including regular people without “pull,” who have nonetheless worked hard to have the means to buy good private coverage – the prospect should be profoundly frightening. A government bureaucracy controlling your medical care is likely to combine the efficiency of the post office with the compassion of the IRS. Imagine a trip to the Department of Motor Vehicles – but to secure lifesaving treatment for yourself, a spouse or child, rather than simply to obtain a driver’s license. What a nightmare.

Nevertheless, proponents of the “government option” continue to operate on the assumption that the laws of supply and demand can be suspended at their whim. Just last week, President Obama simply decreed that federal payments to hospitals will be cut by $200 billion over the next ten years. How, exactly, is that supposed to work? And, more fundamentally, in a capitalist country of free men and women, when did it become permissible for the government to ignore the free market, and dictate what it would pay for specific products and services regardless of their actual cost or value?

Certainly, at present, better health care is available to those with the capacity to pay for high-quality private insurance. But will anyone be better off if that inequality is remedied by President Obama’s social leveling, where there will simply be a single, lower standard of health care for everyone – except for powerful politicians, of course?