Tag Archives: Risk

Millions Will Lose Health Care from their Employer Under the Democrats’ Plan

House Republican Leader John Boehner
House Republican Leader John Boehner

I spotted this scary post over at John Boehner’s blog. The post, written by Kevin Lewis, links to this AP article that highlights a new study from the Lewin Group. I blogged before about the Democrats’ plan to equalize life outcomes and redistribute wealth by nationalizing health care. Now we get more details of how they’ll do it.

Here is a summary of the Democrats’ plan:

President Barack Obama and many Democrats want to create a government insurance plan to compete with private plans that now cover about 170 million Americans. The issue is major sticking point for Republicans and the insurance industry.

And the predicted results of that plan:

The Lewin study found that if such a plan were open to all employers and individuals, and if it paid doctors and hospitals the same as Medicare, the government plan would quickly grow to 131 million members, while enrollment in private insurance plans would plummet.

“The private insurance industry might just fizzle out altogether,” said John Sheils, a Lewin vice president and leading author of the study.

By paying Medicare rates the government plan would be able to set premiums well below what private plans charge. Monthly premiums for family coverage would be $761 in the government plan, compared with an average of $970 in private plans, the study estimated. Employers and individuals would flock to the public plan to cut costs.

Lewis cites two of the study‘s key findings:

“If as the President proposed, eligibility is limited to only small employers, individuals and the self-employed … The number of people with private coverage would fall by 32.0 million people.”

“If the public plan is opened to all employers as proposed by former Senators Clinton and Edwards, at Medicare payment levels … The number of people with private health insurance would decline by 119.1 million people. This would be a two-thirds reduction in the number of people with private coverage (currently 170 million people).”

More here at the Heritage Foundation.

Further study

Here are some previous links that are relevant:

An analysis of the Democrats socialist health care policies

I would summarize the ideals of Democrats (socialists) as follows:

  1. There are unequal life outcomes in society
  2. Those who have little wealth are the victims of those who produce wealth
  3. We (democrats) must transfer wealth until everyone’s life outcomes are equal, regardless of their life choices
  4. We (democrats) must use government coercion to achieve this equality
  5. Since we (democrats) are so morally superior, we are not obligated to transfer our own wealth to anyone

Consider health care. Some risky lifestyle choices are more likely to require more health care services. The socialist’s goal is to make sure that no one is deterred from making these risky choices. Those who do not engage in these risks must be forced to pay for the health care of those who do choose to take on these risks. That way, everyone is equal in the end.

The way this is done is to make sure that people who don’t engage in risky behaviors cannot pay less for their health care than those who do engage in risky behaviors. Let me explain.

Suppose a safe person S knows that he only needs coverage for catastrophic care, since his lifestyle choices eliminate the need for elective treatments like abortions, birth control, STD medications, sex changes and drug addiction treatments. He can be covered for a very low premium.

Consider another irresponsible, risky person R who is engaged in all kinds of risky behavior. He can be covered for all of the medical services for a very high premium. His own choices expose him to risks that will require more medical services.

Democrats (socialists), solve this problem by forcing S to pay for mandatory health care with a very high premium that covers services he will never use. That way, he is really paying for his own health care, and R’s health care, too.

Take a look at this article I found on Health Care BS. In the article, they cite Michael Tanner of the Cato Institute, who analyzes the health care policies that may be included in the Democrats’ health care reform bill.

This is the one I want to draw your attention to, because this is what single-payer countries like Canada have that causes them so many problems:

An Individual Mandate. Every American will be required to buy an insurance policy that meets certain government requirements.  Even individuals who are currently insured — and happy with their insurance — will have to switch to insurance that meets the government’s definition of acceptable insurance, even if that insurance is more expensive or contains benefits that they do not want or need.

And here is another one that will force employers to lay off American workers because employers have to pay more for the same productivity.

An Employer Mandate. At a time of rising unemployment, the government will raise the cost of hiring workers by requiring all employers to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.

Yes, that’s right. Socialism attacks businesses. Attacking businesses causes unemployment.

And there’s more:

A Government-Run Plan, competing with private insurance.  Because such a plan is subsidized by taxpayers, it will have an unfair advantage, allowing it to squeeze out private insurance.  In addition, because government insurance plans traditionally under-reimburse providers, such costs are shifted to private insurance plans, driving up their premiums and making them even less competitive. The actuarial firm Lewin Associates estimates that, depending on how premiums, benefits, reimbursement rates, and subsidies were structured, as many as 118.5 million would shift from private to public coverage.   That would mean a nearly 60 percent reduction in the number of Americans with private insurance.  It is unlikely that any significant private insurance market could continue to exist under such circumstances, putting us on the road to a single-payer system.

When government controls your health care, you pay them at gunpoint and when you want care you get in line behind people who paid nothing into the system. That is socialized medicine, the dream of all Democratic socialists.

And there’s also redistribution of wealth:

Massive New Subsidies. This includes not just subsidies to help low-income people buy insurance, but expansions of government programs such as Medicaid and Medicare.

And remember what I said about the government needing to reducing costs when demand skyrockets for “free” care?

Government Playing Doctor.   Democrats agree that one goal of their reform plan is to push for “less use of aggressive treatments that raise costs but do not result in better outcomes.”  While no mechanism has yet been spelled out, it seems likely that the plan will use government-sponsored comparative effectiveness research to impose cost-effectiveness guidelines on medical care, initially in government programs, but eventually extending such restrictions to private insurance.

This is all caused by the good intentions of people who have no knowledge of economics, whatsoever. And it is important to note that it is this kind of naive, incompetent meddling in the free-market that leads to poverty and the loss of all of our liberties.

Further study

Here are some previous links that are relevant:

How redistribution of wealth kills the entrepreneurial spirit

There is a perception, especially on the left, but also on the “big government” right, that the federal government should be responsible for redressing every inequality that occurs in society. This is true whether the person brings misfortune on themselves or whether it is accidental. The problem with this wealth redistribution is revealed when you think about the incentives this introduces to the producers and the victims.

  1. Government does not transfer wisdom, skill or responsibility from producers to victims
  2. Government transfers money from producers to victims
  3. Being productive involves risk and hard work on the part of producers
  4. Receiving money involves ingratitude and rationalization on the part of victims
  5. If the government confiscates a large enough portion of the earnings of the producers, they stop producing
  6. Every dollar taken from producers is a dollar less they have for engaging in their productive plans, (e.g. –  running a business or raising a family in a responsible way)
  7. The more money is that transferred to victims, the more the frequency of bad behavior increases – because being a victim is easier
  8. If you subsidize being a victim, you get more of it
  9. If you tax production, you get less of it

“Going Galt” is named after the character John Galt in Ayn Rand’s novel Atlas Shrugs. Galt is an industrialist who withdraws from the economy when faced by punitive tax rates and burdensome regulations. Going Galt refers to slowing down or ceasing production, because the risks and effort involved in producing are not worth the portion of the earnings that producers keep after taxes are redistributed to the victims.

The idea was first brought up afresh by Dr. Helen Reynolds in October 2008 on her blog Ask Dr. Helen. A more recent discussion of the phenomenon is here at the Washington Independent web site.

Excerpt:

“Just this weekend,” said Rep. John Campbell (R-Calif.) on Wednesday in an interview with TWI, “I had a guy come up to me in my district and tell me that he was losing his interest in the business he’d run for years because the president wanted to punish him for his success. I think people are reading ‘Atlas Shrugged’ again because they’re trying to understand what happens to people of accomplishment, and people of talent and energy, when a government turns against them. That’s what appears to be happening right now.”

The plot of Rand’s novel is simple, despite its length — 1,088 pages in the current paperback edition. The United States is governed by bureaucrats, “looters” and “moochers,” who penalize and demonize creative people. The country is in decline because creative people are disappearing — they have followed the innovative John Galt to a mountain enclave, “Galt’s Gulch,” where they watch society crumble. Creativity has gone on strike (the working title of the novel was “The Strike”), and the engine of capitalism cannot run without it.

For Campbell, this is a powerful and relevant story. The congressman calls “Atlas Shrugged” an “instruction manual,” and inscribes the copies that he gives to interns. Rep. Paul Ryan (R-Wis.), the ranking member of the House Budget Committee, also gives copies of the novel as gifts and refers to it to make the case against President Obama’s policies. “It’s an audacious scheme,” said Ryan in his speech to the Conservative Political Action Conference last week. “Set off a series of regulatory blunders and congressional meddling, blame the free market for the financial crisis that follows — then use this excuse to impose a more intrusive state. Sounds like something right out of an Ayn Rand novel.”

Michelle Malkin is posting a lot of messages on her blog from people who are suggesting other ways to Go Galt.

Excerpt from one of the producer’s letters:

It is now fashionable and politically expedient to extend blame for the current financial crisis on greedy businesses and predatory lenders. The reality is that individuals and poorly managed businesses were responsible for the bulk of the problems. Government also played a role – and it was both parties – that encouraged and supported unsound business practices. Now the Government “must” step in to “save” these poor people from losing their homes, and “save” these “too big to fail” financial institutions. What about those of us, and those businesses, that chose to act responsibly? Who chose to live within their means? Who chose sound financial decisions over high risk behavior?

Enough is Enough. Let them all fail. It is not too late. I don’t care about the homeowner that borrowed more than they could afford and now find themselves potentially without a home and bankrupt. I don’t care about the businesses that overlooked sound financial decisions in the name of short term profits. We all make choices in life and it is time to let those that made the bad choices live with their decisions and finally reward those that chose to act responsibly. It has come down to this – either we let those that made the bad decisions fail, or we end up sacrificing our nation, our national identity and our very way of life.

Related posts.