Summary: Our health care is simply too important to be left to bureaucrats in Washington, plus it is unconstitutional. I strongly disapprove of the Democrats’ Obamacare and also the incumbent Republican’s “Medical Rights and Reform Act” as both are simply matching strains of the same disease – socialized medicine. (1) (2) (3) (symbol)  Congress, via the HMO Act of 1973 and other acts, has created a government-sponsored insurance cartel that does not serve consumers best.

Beyond establishing a framework of laws and acts for a competitive free market, running health care is simply not a duty of the federal government, and is best left to individuals and privatized insurance. While the federal government should do it’s best to deliver the promised benefits from the current form of socialized medicine, Medicare, expanding this system is out of the question. Younger generations should be given the opportunity to opt out as Medicare’s total unfunded liabilities were $85 trillion in 2008. (4)

If elected, I will not enroll in Congress’s elite health care plan. Citizens should be wary of politicians who plot to control their constituents’ health care, but will not and do not enroll in it themselves.

Why You Should Oppose Government-Run Health Care

Government-run health care, also known as socialized medicine, also called ObamaCare, is an unsustainable idea and is an erosion of personal freedom. Health care is much too important to be run by the government. The services and products that are most abundant and affordable in America are those that are produced and exchanged in a free market. Health care is no different.

People who are concerned with their freedom, the cost of health care, the availability of health care in their community, and the truth, should never allow the government to control any part of health care delivery.

Here are some basic facts about health care. This is not wishful thinking or hopeful bureaucratic programming. Below is a list of references which go into more detail.

Rationing and Price Controls Result in Higher Costs and Less Care

With government-run health care, your health care will be as successful as Amtrak and as efficient and well-run as the U.S. Postal Service. Rationing and price controls will be necessary to make the system run. That results in less available care, fewer health care providers, and higher costs, plain and simple. Government is already heavily involved in our health care delivery, which is why it is so expensive. We don’t want to make it worse with more Government. (5) (6) (photo)

With government-run health care, the best health care available in the world (ours!!) will be reduced to the level of a third-world country’s medical care. Why? Because in any socialized system for any commodity, rationing occurs. The available service must be apportioned, or “spread out,” to cover everyone. And who will get to decide who gets priority for these services? Not you, not your health care provider, not your family, but some bureaucrat in the Federal Government. Who are the most likely to be rationed? If Europe is a model, then those who are unemployed or elderly are the top targets.

More Coverage Does Not Equal More Health Care

The national socialist plan is advertised by the Obama administration as increasing health-insurance coverage for everyone, especially those who are presently uninsured. However, due to the basic economic laws of supply and demand, this does not guarantee increased health care. “Coverage” does not necessarily mean that there will be a doctor or hospital room waiting for you when you need one. In fact, as mentioned above, when government funds the “coverage” it is inevitable that there will be less health care and less access to it. (7)

The HMO Act of 1973

President Richard Nixon sold out the American people after he sponsored the Health Maintenance Organization Act of 1973. Nixon was famously told that “all the incentives [of HMOs] are toward less medical care, because the less care they give them, the more money they make and all the incentives run the right way.” (8) (9) (photo)

The HMO Act of 1973 required employers with 25 or more employees to offer federally certified options and mandated that only care could be rendered by HMO doctors and other professionals who have agreed to treat patients in accordance with the HMO’s guidelines and restrictions in exchange for a steady stream of customers. The businesses – but not individuals – could deduct the cost of health care premiums from their taxes. (10)

We should always keep in mind that the inefficient HMO structure did not arise out of the free market, but rather was forced into existence by the Nixon administration. Prior to HMOs, we did not have today’s technology but our health care system was unquestionably the best in the world. Our doctors and hospitals were the best, our patients were treated with excellent and affordable care, and thousands of private charities provided health services for the poor. Doctors focused on treating patients per the Hippocratic oath and, when possible, curing them as quickly as possible, without the red tape and threat of lawsuits that plague the profession today. Most Americans paid cash for basic services, and insurance was only for major illnesses or accidents. This meant both doctors and patients had an incentive to keep costs down, as the patient was directly responsible for payment, rather than an HMO, Medicare or other government programs. (11)

Health Care’s Like a Box of Chocolates: The Candy Store Analogy

Imagine for a moment you own a candy store. You work hard to find all the best suppliers and employees and to make your prices competitive so you can increase the size of your business and profit.

However, several people eat way too much chocolate and start getting health problems. After several lawsuits, your candy store is faced with two choices: either increase your prices, or go out of business. You choose to increase the cost of your chocolate.

The government decides that you are overcharging people for chocolate. They decide that the best thing to do, is to open a new candy store which will guarantee cheaper prices. They lower their prices to an amount that is well under what you are now able to charge since you got hit with all those lawsuits.

Very shortly, most people decide to buy chocolate from the government-run candy store because it is cheaper. Whether someone sues the government store or not is immaterial; it will not fail. A government-run business can go way past a state of bankruptcy and has no potential of being beaten. It can keep prices down until it is the only option left. Then, with no competitor, they can carry any quality of chocolate they wish. If they want to balance their budget, they can simply offer a much lower quality of chocolate because they have no competition.

In short, if anyone wants chocolate they are now stuck with only the government candy store, who has no reason or motive to provide quality chocolate.

Is this healthy competition? No, this is a serious problem. We are not dealing with chocolate. We are dealing with people’s lives. Once this system is in place, it will be nearly impossible to destroy the nationalized, socialized medicine program without hurting millions of Americans. Even worse is the fact that millions of Americans will be hurting more WITH it in place. This is what is called a “lose-lose” situation.

The answer? Why not protect the candy stores from frivolous lawsuits in the first place? Why not offer tax relief for those paying private health care premiums to encourage private health care?  (photo courtesy Andre Karwath license)

Health Care Is Not Exempt From The Laws of Economics

From the Wall Street Journal, June 13, 2005:

“The larger lesson here is that health care isn’t immune from the laws of economics. Politicians can’t wave a wand and provide equal coverage for all merely by declaring medical care to be a “right,” in the word that is currently popular on the American left.

“There are only two ways to allocate any good or service: through prices, as is done in a market economy, or lines dictated by government, as in Canada’s system. The socialist claim is that a single-payer system is more equal than one based on prices, but last week’s court decision reveals that as an illusion. Or, to put it another way, Canadian health care is equal only in its shared scarcity.” (12)

Socialized health care gives government the power to control prices and to control available medical procedures. Price control is not only an affront to freedom, it actually makes health care less accessible. When a caregiver is limited to charging a certain price, fewer individuals will want to be doctors. The current doctors will retire early and younger potential entrants to the field will be discouraged from doing so, as well as taking on the debt of medical school. The end result is that the profession will attract less talented individuals. Fewer doctors equal less care for the population. This is quite simple, and is evident in anything that government regulates. (13) (photo)

It’s also crucial to note that rising health care costs are also due to inflation, the expanding of the money supply by the Federal Reserve.  Inflation is a hidden tax enacted by DC to stealthily steal the purchasing power from your wallet.  Since the government steals at a faster rate than wages increase, each year we have to trade in a larger share of our incomes to obtain the same amount of health care.  With a sound currency, monetary inflation would be neglible.  Read “The Real Interest Rate” to have a clearer understanding of the magnitude of inflation during the last 30 years.

Also, the idea of socialized medicine is nothing new. In 1950, the American Medical Association wrote:

“The mass-production methods of factory assembly lines are applied to sick human beings… Speed, uniformity, and mediocrity become the order of the day. There is no time for careful diagnosis and treatment, individual attention and medical excellence.” and…

“If the medical profession should be socialized because people need doctors, why not the milk industry? Certainly more people need milk every day than need doctors. On the same erroneous premise, why not the corner grocery? Adequate diet is the very basis of good health! Why not nationalize lawyers, miners, businessmen, farmers?” (14)

Of course the USSR did exactly this, and their road to serfdom resulted in disaster, which brings me to my closing points.

Federal Health Care is Unconstitutional and is NOT a Right

Lastly and importantly, as a federal Congressman I will give an oath to obey the Constitution.  Well, there is simply nothing in the Constitution of the United States that delegates the power to federal Congress to legislate on this matter. (15) At least in the Bill of Rights of the Soviet Union, they were more honest about health care – it states that “citizens of the USSR have the right to health protection.” This document also stipulated Soviet citizens have the “right to work” not longer than 41 hours in a workweek, the “right to rest and leisure,” the “right to education,” the “right to enjoy cultural benefits.” (16) (photo)

The Soviet Union had it all wrong of course. Health care is not a right. People must pay for things like health care. Health care providers have bills to pay and families to support, just as you do. If there is a “right” to health care, then you must have the ability to force health care providers, or exert force indirectly on them by using the government, to serve you. Therefore health care is a privilege, a good and service that everyone pays for. As Dr. Ron Paul notes:

“Obviously, if health care providers were suddenly considered outright slaves to health care consumers, our medical schools would quickly empty. As the government continues to convince us that health care is a right instead of a good, it also very generously agrees to step in as middle man. Politicians can be very good at making it sound as if health care will be free for everybody. Nothing could be further from the truth. The administration doesn’t want you to think too much about how hospitals will be funded, or how you will somehow get something for nothing in the health care arena.” (17)

Furthermore, a true concern is to provide health CARE (not insurance) to the poor.  While I believe a true privatized system would provide this too, I point out that the EMTALA Act of 1986 ALREADY provides care to those unable to pay.  Under EMTALA, virtually all hospitals are prevented from rejecting patients, refusing to treat them, or transferring them to “charity hospitals” or “county hospitals” because they are unable to pay or are covered under Medicaid/Medicare by the force of government.  (18) (19) (19-B)

The “50 Laboratories” Model

For those who remain unconvinced by the above, my final argument is if we really do decide we want national socialized medicine, then a successful state health care experiment should precede it. With the fragile state of our economy today, what is the sense in risking a possible national disaster? Is not the far more prudent path to first see a state or group of states first succeed before proceeding to nationalization? Why do we not use our 50 States as “50 Laboratories”? This would provide us with the following:

1. A real-life feasibility study.

2. If there is success, some valuable lessons on optimization would be learned from any mistakes and generate confidence in the plan

3. Disaster proofing – we do not run the risk of failing the whole country on any given idea all at once (20)

So far, only the experiment in Massachusetts for the last 3 years qualifies, but the results are not pretty. The Cato Institute found that – although Massachusetts politicians promised that the insurance mandate would reduce medical costs and drop health insurance premiums by 25-40% – instead this has happened:

• Premiums rose by 7.4% in 2007, 8-12% in 2008, and are expected to rise 9% this year

• This compares to an average nationwide increase of only 5.7% over the same period

• Annual health insurance costs for a family in Massachusetts average about $4,000 more than the national rate

• Health care spending has also increased in Massachusetts by 23% since the coverage mandate was enacted (20)

What I Would Do As Congressman

If citizens are in favor, I would introduce tax relief legislation to allow individuals and families to reduce their federal income tax nearly dollar-for-dollar by the amounts they spend out-of-pocket on private health care premiums. This would help make private health care a more affordable option for everyone.

I would introduce a bill to reduce federal income taxes dollar-for-dollar by amounts spent out-of-pocket by parents for their children with terminal illnesses, major disabilities or cancer. How silly is it that the government helped finance the housing boom through mortgage credits, but has no mercy when it comes to a truer form of wealth, our children? Parents in such situations would greatly benefit from such a tax relief.

Similarly, I would introduce a bill to suspend the obligation of individuals suffering from terminal illness or cancer to continue paying the Social Security tax on their income. What could be more heartless than forcing a person to continue paying Social Security money they will never see while they are sick and need every dollar to survive?

While I condemn frivolous medical malpractice lawsuits, there are certainly sad cases where individuals are harmed physically, mentally, or economically either by health care providers or insurance companies. However, liability and contract law are the responsibility of the state Congress of Pennsylvania, not DC. Of course, the right of individuals to seek recourse in state courts should not be infringed, but it is the responsibility of the state Congress to determine how best to discard frivolous lawsuits and procedurally balance the rightful reparation for plaintiffs with the need for reason in judgments against defendants.

One of the constitutional responsibilities of Congress is to “regulate Commerce… among the several States.”  Currently there is no state portability over state lines due in large part to the crippling state mandate system. (21) (22) This means major health care insurers must subdivide into 50 companies to cover each state, which is fairly ridiculous.  I am for portability over state lines, although I must remark that using the Commerce Clause as justification for “essentially unlimited power” over health care (from House Speaker Pelosi) is completely false, see my article “To Nancy Pelosi on Health Care – Are You Serious?” (23)

THE BOTTOM LINE: Your health is too important to be in the hands of bureaucrats who can’t even balance a budget.

Health care, like everything else, becomes more available and affordable when it is allowed to flourish in the free market. It attracts more talented practitioners to your community when it is left to private enterprise. The free market encourages advances in medicine, invites more willing practitioners to the field, and allows for consumer demand to be met by ambitious, free people. Don’t let bureaucrats control this essential part of your life!

*** A big thank you goes to volunteer advisors Maria Folsom and Erik Gumbrecht for their significant contributions to the above.  For a full list of my proposed solutions, please read “Health Care Solutions.”

References:

(1) Text of the Democrat’s “America’s Affordable Health Choices Act of 2009,” HR 3200

(2) McKalip, Dr. David. July 2009. “Stop Obamacare Now!“

(3) The incumbent Republican’s Socialized Medicine plan, the “Medical Rights and Reform Act” will “foster state innovation through insurance market reforms, high-risk pools, community health networks, and new association options for small businesses” and promises to socialize medicine by “giving low-income families the option to use public funds to purchase private health insurance plans.”  LINK

(4) Fisher, Richard. 2008. “Storms on the Horizon.“

(5) Forty years ago, the government bought Amtrak, and initially they were supposed to be out of the passenger rail business after 3 years. Many billions of dollars later, the federal government still operates Amtrak at a loss, despite the fact that they have created a monopoly by making it illegal to compete with Amtrak. Many Americans have never even taken an intercity train in their lives.

(6) Hart, Ron. May 2009. “Health Care Hijacking.“

(7) Dalmia, Shikha. May 2009. “Obama’s Health Care Quackery.”

(8) Wikisource. 1971. “Transcript of Taped Conversation between President Richard Nixon and John Ehrlichman that led to the HMO Act of 1973.”

(9) Youtube. 2009. Audio of Conversation between President Richard Nixon and John Ehrlichman that led to the HMO Act of 1973.

(10) Wikipedia. July 2009. “Health Maintenance Organization.“

(11) Paul, Dr. Ron. 2006. “Lowering the Cost of Health Care.“

(12) Wall Street Journal.  2005.  “Unsocialized Medicine.“

(13) Moffit, Dr. Robert and Nina Owcharenko. 2008. “The Obama Health Care Plan: More Power to Washington.“

(14) American Medical Association. 1950. “The Voluntary Way is the American Way.“

(15) The Constitution of the United States. 1787 to present.

(16) The Constitution of the USSR. 1977.  Soviet citizens also had the “right to submit proposals to state bodies and public organisations for improving their activity, and to criticize shortcomings in their work.” Sardonically, “persecution for criticism [was] prohibited.” Tell that to a survivor of the gulags.

(17) Paul, Dr. Ron. July 2009. “Health Care is a Good, Not a Right.“

(18) FAQ on EMTALA, Question #1.

(19) Pipes, Sally.  2008.  The Top Ten Myths of American Health Care: A Citizen’s Guide. Pacific Research Institute.  See Myth #8.

(19-B) Towne, Jake. December 2009.  ”Health Care is NOT a Right.”

(20) Towne, Jake. June 2009. “The ’50 Laboratories’ Model.”

I also want to add a special note on state health care mandates.  These are a major factor in driving up the cost of premiums – most states are between 18-40%.  While the intention of adding these mandates was “benign,” the end result is you are paying the insurance costs on some items that you do not need or want; in some cases, you are just paying for the insurance of others.

In the state of Pennsylvania, our state legislature mandates that you must pay 70 mandates, including insurance for diabetic supplies, autism, cleft palate, chemotherapy, mental health parity, telemedicine, chiropractor, optometrist, drug abuse counselor, and many more.  The mandates for Pennsylvania are estimated at >>19%, probably closer to 40% of your total premium.  The logic follows that if you do not need or want this insurance, you should not be forced to pay for it. (21) (22)

(21) Roche, Shelly.  2009. “State Mandates and Health Insurance.”

(22) Council for Affordable Health Insurance. 2009.  ”Health Insurance Mandates in the States 2009.”

Another special note is on the portability of health care over state lines – there is none of this currently, most likely in large fact due to the different state mandates mentioned above.  As Congressman, I am for portability over state lines which via the Commerce Clause is a congressional responsibility.  However, the Commerce Clause does not give Congress unlimited power over health care, just to smooth out transactions from state to state – which would increase competition.  Perhaps one of the greatest acts of fallacy by the federal government today is the illegal misinterpretation of this clause, as explained below.

(23) Towne, Jake.  October 2009.  ”To Nancy Pelosi on Health Care – Are YOU Serious?“

Yet another note is that states have the power to nullify federal acts, such as the current health care bill.  In this article, I rehash solutions to the current health care situation and discuss nullification.

(24) Towne, Jake. January 2010.  ”The Next Defense – Nullification of the Health Care Tax.”

Lastly, I compared the enormous levels of military spending and ask the critical question – where should we allocate resources?

(25) Towne, Jake.  January 2010.  ”Guns or Health Care?“

In this article, the current health care tax’s unintended consequences from changes of labor laws are discussed in more detail.

(26) Steib, Eric. M.  December 2009.  ”The Health Care Tax Will Devastate the Working Class.”

August 4, 2009

In September 2009, covered Health Care Economics with Michael McKay of Radio Free Market.  Here is the summary.

A couple 1-page handouts on this plank for download and printing out are available below, backup is here, along with the entire plank in PDF.