Peter Ferrara

Posted this morning at Heartland.org is my new comprehensive study: The Obama Health Plan: Rationing, Higher Taxes, and Lower Quality Care. The study explains in full detail, based on the pending Congressional legislation, exactly how the Obama Health Plan would impose government rationing that will deny you health care, severely restrict your freedom of choice and control over your health care, raise, not lower, health costs, impose sharp tax increases that would leave America uncompetitive in the world economy, and increase federal spending, deficits and debt.

The rationing begins with the dominant public option government health insurance plan, which is authorized in the legislation to follow the practices of Medicare and Medicaid in sharply underpaying doctors and hospitals. Medicare pays doctors 20% below market rates, and hospitals 30% below market. Medicaid pays 30% to 40% less than Medicare.

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This power to underpay medical bills is the most important reason the government public option health insurance plan will eventually drive out the private competitors, leaving you without the choice of keeping your current insurance plan. Any private plans that do manage to survive will be able to do so only by adopting the practice of paying only what the government plan pays. So the government will end up dictating all payments to health providers in any event.

Doctors and hospitals will consequently begin to restrict their care to fit what the government will pay. Their practices will shrink to avoid the more expensive medical services and treatments that the government payments will not sufficiently cover.

These underpayment practices in turn will have dramatic, powerful effects on investment in the health care industry. Investors are not going to finance acquisition of the latest, most advanced equipment and technologies with the government slashing compensation for the services such technologies provide. Investors are also not going to finance expanded or new hospital facilities or clinics, or even the full maintenance of existing ones.

The supply of doctors, surgeons and specialists will also decline, just when demand for their services is soaring under the Obama health plan giveaways. Obama repeatedly says that under his health reform plan if you like your doctor you will be able to keep him or her. But the question is whether under his reform plan your doctor will be willing to keep you, when the government refuses to pay adequately for the health care services you want and need.


Peter Ferrara

Peter Ferrara is General Counsel for the American Civil Rights Union, a Senior Fellow at the Carleson Center for Public Policy and a senior fellow at the National Center for Policy Analysis.