The second sign of action came from my home state of California where Governor Arnold Schwarzenegger recently announced plans for a $12 billion universal health care system.
The plan seeks to insure all California residents (including illegal aliens) by taxing hospitals 4 percent and doctors 2 percent of their gross revenues. Furthermore, the plan calls for employers of 10 or more who do not provide coverage to pay an “in-lieu fee” of 4 percent of payroll.
On top of all this, the plan is sneaky. California requires any new tax measure to pass both houses of the legislature by two-thirds majorities, but since Schwarzenegger is calling his new taxes “fees” or “dividends” he hopes to avoid such a requirement. As the Wall Street Journal so brilliantly put it, Schwarzenegger wants to “call the elephant in the room a hippo and hope the public buys it.”
But the public isn’t buying. In fact, California voters defeated measures in 2003 and 2004 that would have required businesses to provide health insurance to their employees. Doctors pegged as the funding source for the plan aren’t buying either. Medgadget, a popular medical blog written by doctors, likened the plan to a declaration of “war on physicians” and said that Schwarzenegger’s action comes at a time when the medical industry is “already experiencing unprecedented levels of loss of economic liberties and…ever increasing regulation.”
Whereas Romney’s plan focused on creating an environment in which the free-market thrives, Schwarzenegger’s plan seems determined to expand government authority, create a vast new bureaucracy, and punish doctors and other businesses. Unfortunately, there’s little reason to believe that such a plan would do anything other than reduce innovation, increase costs, drive doctors and/or other employers out of state, and ultimately leave us Californians with the same (or worse) problems we face today.
Thus we encounter one of the great dangers of healthcare “reform”: we can make things worse, much worse. To avoid such calamitous situations, conservatives should follow Governor Romney’s example and embrace a free-market approach that emphasizes personal responsibility and consumer choice. In the end, the market is our best hope to make healthcare reform a good thing for America.