Lies My Congressman Told Me Print
By Troy Senik
Wednesday, October 21 2009
Whether or not one believes in the ideological tenets of health care reform, its practical promises amount to little more than a blend of hope and willful delusion. So before the votes are called, let us disabuse ourselves of the fantasies that aspire to carry the day.

The Inconvenient Truths Behind Health Care Reform

The five most dangerous words that can be a spoken by a member of the United States Congress are “we have to do something!” It’s a credo only a politician could love.  Doing something, it should be noted, is not the same as doing it well.  But in the parallel moral universe of Capitol Hill, the virtues of style are always understood to outweigh the vices of substance.  Action is paramount. Consequences will be forgotten.  Regrettably, there is little Zen in the legislative branch.
This is a fundamentally American pathology. We are, after all, the people who left the cathedrals of Europe behind for the unbroken wilderness of a new continent.  A few centuries later, we had cleared a path to the Pacific.  Possessed of a spirit of discovery that could not even be tamed by gravity, our footprints were on the moon within a few centuries more.  Thus, belonging to the cult of action is something just shy of an American birthright.
But this trend is particularly perverse in postmodern government.  If anything it retards freedom. Members of Congress no longer open new frontiers; they simply divide existing ones.  These days, liberty only seems to expand in the private sector, through innovations such as the digital revolution.  In public forums, the discussion is far more often about how to bend the fruits of freedom to serve the ideological dispositions of the party in power.
Even laying aside these philosophical considerations, however, Americans are left with a dilemma: simply put, we are not represented by serious individuals.  Despite the fact that it’s the dominant feature of about 80 percent of their jobs, few members of Congress have even a rudimentary grasp of economics. They give virtually no thought to the doctrine of unintended consequences.  And they tell voters (and perhaps earnestly believe) that the sincerity of their intentions ensures the success of their endeavors.  By the standards of any other profession, their rate of malpractice is a firing offense.
As the Democrat-driven health care reform winds it way through Congress – and perhaps eventually to the President’s desk – it’s important to keep these principles in mind.  Because whether or not one believes in the ideological tenets of health care reform, its practical promises amount to little more than a blend of hope and willful delusion.  So before the votes are called, let us disabuse ourselves of the fantasies that aspire to carry the day:

A Public Option Will Introduce Competition into Health Care – There are currently 1,300 firms providing health insurance coverage in the United States.  If, as the President has promised, a “public option” will operate on the same cost basis as a private insurance provider, you have to believe that 1,301 providers form a competitive market, while 1,300 leave us subject to the rapaciousness of Gilded Age-style corporate malfeasance.  Thus, one has to conclude that the “public option” is either a Trojan horse for expanded government care or an institutionalized metaphor for the Obama Administration’s incomprehension of markets.
In calling for a move towards greater competition, Obama has noted that in 34 states, five or fewer health insurers control 75 percent of the market.  In Alabama, he said, "almost 90 percent is controlled by just one company." Without competition, he continued, "the price of insurance goes up and quality goes down."  All true.  But those massive market shares only exist because of the federal government’s continued refusal to let Americans buy insurance across state lines – an obstinacy driven by liberals.  If more competition is the goal, why is Obama willing to go to the mat for one more provider, but notably silent about chances to create a nationwide market of 1,300?

Health Care Reform Will be Deficit-Neutral – Hardly. The Congressional Budget Office’s scoring of Max Baucus’s bill in the Senate Finance Committee did indeed promise a package that wouldn’t add to the national debt.  But that conveniently ignores that Democrats in Congress are attempting to pass a separate bill to increase Medicare reimbursement rates by nearly $250 billion.  It’s amazing how quickly you can balance the books when you’re moving one-quarter of a trillion dollars off the ledger at will. 

Health Care Reform Will Drive Down Costs – Correction: health care reform will shift costs. One of the fundamental drivers of health care inflation is that patients – largely insulated from the cost of treatment because of employer-provided insurance – have little sensitivity to the price of their treatment.  By exacerbating this effect and adding costly new mandates onto America’s health insurers, costs will continue to increase. Government payments might reduce prices, but remember that what you save as a consumer you’ll have to pay back as a taxpayer.

Americans Who Like Their Current Health Care Plan Will Be Able to Keep It – About as untrue as any of the claims in this debate.  Most Americans (nearly 165 million) don’t choose their health care – their employer does.  One proposed aspect of health care reform is imposing a tax on employers who don’t provide insurance for their workers.  But with the rate of taxation being set lower than the average cost of providing health care, the overwhelming economic incentive will be for business owners to dump their employees onto public insurance. Not only will you not get to choose whether to keep your insurance – the government will be stacking the deck to ensure that you don’t.

Health Care Reform can be Achieved Without Taxing the Middle Class – President Obama made much on the campaign trail of his pledge not to raise taxes on Americans making less than $250,000 a year.  At first blush, proposals to fund reform by increasing taxes on insurers, pharmaceutical companies, medical device makers and other corporate interests in the health care industry may seem to adhere to that pledge.  But tax assessment is not the same as tax incidence.  The costs of those new taxes will get passed on to consumers in the form of higher prices – with no reference as to how much those consumers make a year.

On these and many other issues, advocates of health care reform have either been dishonest or gullible.  Those activists regularly tell us that health care reform is urgent.  But should getting it right be any less important?