Having Cake and Eating It, Too?

September 20, 2009
"This Week", ABC News

George Stephenopoulos interview with President Barack Obama

Stephenopoulos alleged that to require individuals to purchase health insurance and then to impose a fine on those who refuse to purchase insurance amounts to a tax increase. Obama countered with the following.

OBAMA: "No. That's not true, George. The -- for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase. What it's saying is, is that we're not going to have other people carrying your burdens for you anymore than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase.

People say to themselves, that is a fair way to make sure that if you hit my car, that I'm not covering all the costs."

"What it's saying is, is that we're not going to have other people carrying your burdens for you anymore."

This is important - perhaps even more important than how Merriam Webster defines a tax. How can the President claim that he is not willing to permit you to continue to require others to carry your burden when he is one of the United States' strongest proponents of redistribution of wealth - when his administration has provided for the country's most productive to be taxed more heavily while the least productive have an effective negative tax rate, financed not only by the most productive, but by borrowing billions - even trillions - of dollars on the credit of the United States? I don't buy for one second that the President believes in his own argument here.

"Right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase."

There are two important differences between a requirement that every automobile be insured against liability and that every individual's health be insured.

First, automobile liability insurance is required in order to ensure that should you cause damage with your vehicle to another's person or property that you have the means to cover those damages. This provision is to protect the persons and property of others from you, not to protect your property or person. No one is required to purchase full coverage insurance. In the case of health insurance, a similar provision would require each individual to be insured in order to cover injury or sickness that they may cause in another person, not to insure their own good health.

Second, automobile liability insurance is required by STATE governments, not by the federal government, and the federal government has no Constitutional authority to require you to buy either automobile liability insurance or health insurance. Similarly, it has no Constitutional authority to levy taxes to pay for programs it has no authority to operate.

September 9, 2009
President Obama's Address to Congress Concerning Health Care Reform

OBAMA: "Now, my health care proposal has also been attacked by some who oppose reform as a "government takeover" of the entire health care system. As proof, critics point to a provision in our plan that allows the uninsured and small businesses to choose a publicly sponsored insurance option, administered by the government just like Medicaid or Medicare. (Applause.)

So let me set the record straight here. My guiding principle is, and always has been, that consumers do better when there is choice and competition. That's how the market works. (Applause.) Unfortunately, in 34 states, 75 percent of the insurance market is controlled by five or fewer companies. In Alabama, almost 90 percent is controlled by just one company. And without competition, the price of insurance goes up and quality goes down. And it makes it easier for insurance companies to treat their customers badly -- by cherry-picking the healthiest individuals and trying to drop the sickest, by overcharging small businesses who have no leverage, and by jacking up rates."

As proof, critics point to a provision in our plan that allows the uninsured and small businesses to choose a publicly sponsored insurance option, administered by the government just like Medicaid or Medicare.

Social Security, Medicaid and Medicare are our country's three largest entitlement programs. The United States borrows trillions of dollars every year to pay for them. What precedent has the federal government set that gives anyone the gall to say with confidence that a publicly sponsored insurance option, administered by the government just like Medicaid or Medicare, will benefit this country? If there exists somewhere billions of dollars of waste, fraud, and abuse in these government run programs with which President Obama intends to pay for these programs, why not find that money now and use it to pay for the entitlement programs to which we are already obligated and which we cannot afford?

My guiding principle is, and always has been, that consumers do better when there is choice and competition. That's how the market works. (Applause.) Unfortunately, in 34 states, 75 percent of the insurance market is controlled by five or fewer companies. In Alabama, almost 90 percent is controlled by just one company. And without competition, the price of insurance goes up and quality goes down.

Bravo, Mr. President. You are absolutely right. However, you are absolutely wrong to suggest that a government sponsored health insurance option will create this choice and competition you so ardently support. The primary cause of lack of competition in the health insurance market is regulation that prevents the sale of health insurance across State lines. It is absurd to suggest that the only way to create competition is not only to provide government sponsored health insurance at below market rates, but to require that every individual be insured and to mandate what all health insurance providers must cover to conform to government standards.

What incentive do businesses have to continue to offer employer-provided health care? They will have every incentive to drop it. They will not have to worry about their employees being without coverage; the government will provide it for them, and they no longer have to shell out the funds. One by one, private health insurance providers will go out of business as they lose clients to the government option.

Health insurance costs will go down if we remove barriers to the sale of insurance across State lines, if we institute a "loser pays" tort reform to reduce the practice of defensive medicine, if we offer tax deductions for the purchase of health care insurance, and if we promote non-taxable individual health savings accounts coupled with catastrophic health insurance. When patients pay out of pocket, health care costs are appreciably less than when they pay with insurance.

A health savings account is linked to a debit card that can be used to pay for qualifying medical expenses, effectively allowing a patient to pay for most routine medical expenses out of pocket, thus lowering the cost of doing business with that patient, and lowering the cost of medical care. It may also somewhat reduce the burden on the health care system, as patients will no longer feel as though someone else is paying for their care - as they do when they are responsible for nothing more than a co-pay. They will use the system less frequently and only when necessary.

2003, Illinois State Sen. Barack Obama to AFL-CIO: “I happen to be a proponent of single-payer, universal health care plan.”

2007, US Senator for Illinois, Barack Obama, while campaigning for President: “I don’t think we’re going to be able to eliminate employer coverage immediately. There’s going to be potentially some transition process. I can envision a decade out, or 15 years out, or 20 years out.”

I do not believe that President Obama is entirely concerned with choice and competition as he so frequently repeats. I believe that President Obama is and will always be a proponent of single payer health care, and I believe that he intends to place the country on a nigh-irreversible track toward that system. I believe that his government sponsored insurance option is one of the first steps in that direction.

President Obama, despite his words, has demonstrated a continual disdain for the private sector, private profits, and market capitalism through his nationalization of two-thirds of the domestic automobile industry, 90% of the home mortgage industry, and the student loan industry among others - and now his attempt to begin the nationalization of the health care industry.

There are problems with the United States' health care system - problems that should be addressed. But despite these problems, our health care system is the highest quality health care system of any on the face of this planet, and it does not warrant another historically enormous expansion of the federal government to dismantle that system and replace it with something far inferior. This would be a more than a disservice to this country and her people; it would be disastrous.