The Real Coming Health Care Choices

Experience in Massachusetts with health care points at a remarkable outcome: the ability to afford grand expansions of health care access may result in rethinking many other formerly sacrosanct government programs.

While Democrats and liberal media focus on raising taxes on our most productive citizens and economic sectors, to continue to fund bloated government, relatively little attention is paid to two areas where there’s much to be obtained: rich benefits programs for government workers and the tax-exemption of non-profits offering insufficient benefits to the public.

The issue of health care reforms offers the telling illustration.

The benefit-rich Massachusetts program resulted in budget-busting figures, already costing more than a third above forecasts. Proposed expansions add another third to costs.

No wonder 67% in a recent Field poll of Californians – also a predominantly liberal state – believe the cost forecasts of universal health care to be understated.

Democrats in Massachusetts’ legislature propose taxing the now tax-exempt endowments of its major universities, to add $1.4 billion, 5%, to the state’s revenues.

Although the powerful universities are expected to prevail, arguing their other economic benefits to the state, the Boston Globe reports the surprise that, “the issue had gained momentum.”

This coincides with the efforts of the US Senator, Chuck Grassley, to restrict tax abuses by tax-free non-profits, including that endowment-rich universities should spend at least the common 5% of assets and more on financial-aid to students.

State and local governments are hard-pressed to meet the financial obligations of their employee and retirement health care programs, leading to reductions or restrictions of basic services and voter-liked programs and to calls for voter-disliked taxes.

Public employee unions, the most powerful in America, closely allied with Democrats, push for more government programs and taxes. The only segment of our workforce that is expanding in this trying economy is public employees. These unions spent over $100 million to scuttle Governor Schwarzenegger’s reforms and are planning to spend over $500-million to get their way in the 2008 elections. The California city of Vallejo just declared bankruptcy in the face of public employee costs. California’s budget deficit is projected at up to $20-billion, most spent on public employees and Medicaid, and other similarly liberal states like New York are expecting proportional deficits.

The federal deficit for Medicare spending is expected in a generation to exceed the entire current federal budget.

Democrat proposals to reform US health care stress increased access, with hazy promises to control costs through administrative efficiencies. Those worthy efforts are already in motion but haven’t produced significant savings. Indeed, the investment in them requires increased costs, particularly by health care providers.

The Republican approach is to shift the tax benefit of employer-provided insurance to individual tax credits, and reduce state benefit mandates to increase fitting and affordable choices for individuals. The purpose is to provide added incentive to shop and self-control, reducing cost inflation via competition among providers and insurers. This approach is limited by lack of transparency about costs of procedures, inability to make informed decisions, and the highest costs coming from end-of-life treatments when accounting is less able or a priority.

No knowledgeable analyst expects either approach to significantly reduce the increase in health care expenditures, which are primarily driven by technological advances and secondarily by high utilization, aging population, and defensive medicine.

The best, and worst, of both sets of proposals are incorporated in the bipartisan plan by US Senators Wyden and Bennett. Employer tax-deductions for providing insurance would be eliminated, and employers additionally taxed. Individuals earning below what in most of our urban areas is a middle-class income would be subsidized through tax credits for individual insurance. The benefits would be set and regulated by the federal government. Insurance would be mandated, and premiums would be collected by the IRS. The primary cost control to the government would be that its subsidies would lag medical cost inflation, thus over time shifting even more costs to taxpayers and those covered.

This major, radical transformation of the US health care system, according to the Congressional Budget Office’s self-admitted not “formal” estimate, may be revenue neutral but “actual experience—and the results of a formal cost estimate—could differ substantially in either direction.” The Heritage Foundation’s analysis stresses the Medicare-like stifling of innovative coverage and treatments by a government-controlled health care system, and the lack of fit of benefits to individuals’ needs. Physicians stress the increasing shortage of primary care doctors as the work and compensation disincentives grow.

Although polls show consumer fears about the affordability of future health care, the Gallup survey shows 83% satisfaction with the quality of their care and 57% satisfied with their costs. Votes and polls demonstrate an unwillingness to surrender current insurance arrangements or to pay more than a minimal amount to extend coverage to the uninsured. The National Institute for Health Care Management’s latest report analyzes the uninsured: most are illegal immigrants, already eligible for government programs or able to afford coverage. Schemes to increase access through government programs to those above poverty level result in up to 60% coming from existing medical insurance, not benefiting those uninsured.

The real choice that is evident to voters, but not yet to enough legislators, is that more government is not the answer, and current trends may require sacrifices among liberal bulwarks, like non-profits and government workers, to avoid drastic cutbacks in preferred programs, quality of health care, and individual freedoms.