A counterpoint to the President’s health care reform email

Yesterday President Obama sent an email on health care reform to the White House mailing list.

Respectfully, here is my counterpoint.


From: Keith Hennessey [mailto:kbh.blog@gmail.com]
Sent: Thursday, July 30, 2009 2:00 PM

To: Taxpayers
Subject: What health insurance reform means for you

Dear Taxpayer,

If you’re like most Americans, you like the health insurance you have today but think the system needs improvement. You would like things to work better, but are aware of the threats that arise from politicians who promise you something for nothing.

President Obama is correct that the underlying problem with health care is rising costs. Because of this problem, your paycheck grows more slowly, millions of Americans cannot afford to buy health insurance, and the escalating costs of Medicare and Medicaid will force enormous tax increases onto you and your children. The President wants to slow the growth of health care spending, and so do I.

Congress has gone in the opposite direction. Rather than changing incentives to reduce the cost of health insurance, they are trying to shift those costs onto someone else: you. The facts are not in dispute. The bill being developed in the House of Representatives would mean:

  • No reduction in the growth of average private health insurance premiums;
  • More than $1 trillion of new government spending over the next decade;
  • $239 billion more debt in the short run, with ever-increasing additions to the deficit forever; and
  • More than $500 billion of tax increases, including higher income tax rates on successful small businesses.

The U.S. economy is struggling to recover from a deep recession. America cannot afford a bill that imposes these extra burdens on an already weak economy. Rising health care costs are the problem, and so Congress’ solution begins by spending a trillion dollars more on health care. That doesn’t make sense.

The President is correct that it’s time to fix our unsustainable health insurance system. I disagree with the way that Congress is trying to fix it.

You will soon hear that these bills would not increase government involvement in your health care. That is incorrect. These bills give government officials authority to determine benefit packages, copayments and deductibles, relative premiums, as well as health plan expenses and profits. The government would, in effect, control health insurance. That’s the wrong way to fix a flawed health insurance system. There is a better way.

Health insurers today are partially insulated from competitive forces. If they convince the human resources manager at your employer to offer their plan, they’re all set. Your choice is secondary and therefore less important. We need a system that instead forces health insurance companies to compete for your business.

You can’t watch a televised sports event without being overwhelmed by the competition among auto insurers. They compete based on reliability and service when you have an accident and need help. They offer incentives for safe driving. Some emphasize that they can cover you even if you are a high-risk driver with a less-than-perfect driving record. They aggressively cut premiums to attract new customers. They reassure you that you’re “in good hands” if you choose to give them your premium dollars. These insurers don’t behave this way because they’re nice. They do it because it’s how they win your business, and because they know you will go elsewhere if you can get better value. Your health is both different and more important than your car, and we need to bring those same benefits to the health insurance market. We need a thoughtfully regulated market that means insurers will compete for your business by offering reliable, high quality health insurance that you can afford.

When insurers have to compete for your business, it will put you and your doctor in control, rather than your insurer or your employer. The bills moving through Congress assume that we all have the same health care needs, and they create one-size-fits-all solutions. But your situation is different from your neighbor’s, and only you can make the right decisions for you and your family, based on advice from medical professionals you trust.

This does not mean you’ll have to negotiate prices in the ambulance. Health insurance must protect you and your family when you need it most – when there is an emergency, or a severe accident or disease that threatens not only your family’s health, but your family savings. We buy insurance to protect ourselves against the small chance of a really bad situation, and that’s what health insurance must do.

More control means putting the resources in your hands while giving you both the information you need to make good decisions, and the incentives to consider whether that fourth MRI is really necessary, or whether you could save some money with a generic drug or a semi-private recovery room in the hospital, instead of a more expensive alternative. Health care and health insurance cost a lot today primarily because we’re often spending someone else’s money, so we don’t think about the cost of the care that we use. These tradeoffs and decisions about what care is worth the cost must happen. We must answer a basic question: who is more likely to make good decisions about your health insurance and health care – you and your doctor, or a government bureaucrat who doesn’t know or care about your particular situation?

The right kind of health care reform is not a free lunch. It carries obligations as well. While others offer you the hollow promise of government-provided and underfunded health care security, I’m telling you that you’re going to have to take more responsibility for decisions about your own health. A well-functioning system will offer financial incentives to keep yourself healthy, and to avoid risky behaviors that are the source of so much of the costs in today’s system. You will have to spend more time talking with your doctor and making hard choices yourself, although that’s far preferable to spending that time fighting with your insurer or with a government bureaucracy. You will have to shop intelligently for health insurance and decide what tradeoffs make sense for your family situation. You will have lower insurance premiums but more financially responsibility for relatively minor medical costs, and you can have a tax-free reserve fund that you can spend wisely on everyday non-critical medical expenses. It means more personal responsibility and control, and less dependence on the government. It means your health security comes from you buying insurance to protect your family against catastrophe, rather than hoping the government won’t ration your care when it’s needed. Others want to tell you that you have the right to have someone else pay for your health insurance. I think you have the responsibility to provide for your family’s health security, and that it’s government’s job to set rules so that you have affordable options, and to subsidize the poorest who cannot afford basic catastrophic protection.

The right kind of health care reform means your wages will grow faster as insurance premium growth slows. It means portable health insurance that you can take with you from one job to another, so you don’t get locked into your current job because you’re afraid to lose your health insurance. It means that millions more Americans will be insured because premiums are less expensive and the uninsured can better afford to buy it, not because we are shifting those costs onto other hard-working Americans and small businesses through higher taxes. It means no increase in the short-term budget deficit. It means dramatic reductions in unsustainable long-term budget deficits, rather than the explosive deficit increases contained in the current legislation.

The President is promising to guarantee your health care security by changing the way health insurance works and making someone else pay for it. If you’re reading this, you’re probably that someone else. You’ll probably pay for it through higher insurance premiums, as they do in New Jersey where these “protections” make insurance unaffordable for many. You’ll probably pay for it through higher taxes, whether you’re one of the eight million people who would remain uninsured and still pay higher taxes under the House bill, or a successful small business owner who would face higher income tax rates that kill your ability to grow your business. You and your kids will definitely pay for it through higher taxes when the massive deficit increases from this bill come due, on top of the unresolved long-term problems of Social Security, Medicare and Medicaid.

Over the next month you will hear the claim that opponents of the pending Congressional health care bills are defenders of the status quo. You are going to hear that the choice is between a broken system and these bills, and that reform is better than no reform. You will hear that the cost of doing nothing is too high, and that we must therefore enact one particular solution, no matter how flawed.

This is misleading, and there is a better way. I strongly oppose the health care bills now being advanced in Congress, and I think the status quo is a mess. There is no free lunch in health care reform, and fixing our current system without breaking the good parts will involve some hard choices. There are alternatives to the pending bills that do health care reform the right way. I have a plan you can find at KeithHennessey.com. If you’d rather see a good plan from someone who actually matters, then check out the Ryan-Coburn Patients’ Choice Act from Rep. Paul Ryan and Senator Tom Coburn.

You will soon be told that it’s time to act, and that we must therefore enact the wrong kind of reform. You can help by telling your friends, your family, and the rest of your social network that Washington needs instead to start over, and to put you, the patient/worker/taxpayer/consumer/citizen, at the center of health care decision-making, not the government. We need the right kind of health care reform, not these bills now being considered.

Washington – Please stop promising us free lunches. The country is going bankrupt – don’t make it any worse. We’re adults. We can handle the hard choices.

 

Sincerely,

Keith Hennessey

KeithHennessey.com

19 thoughts on “A counterpoint to the President’s health care reform email”

  1. Mr. Hennessey, I think there are currently 3 different bills in the house (possibly a fourth) and two working their way through through committe in the senate. Is it possible for you to give us a brief comparison of each to the other? In other words what proposals are in all of them, what proposals are in more then one and what proposals stand alone in each bill. Thanks! Joe Hohmann

  2. Very good post Keith. I think the auto insurance analogy is a little strained though, or at least needs further elaboration, because of the adverse selection problem. I am very curious as to what national ground rules you would put in place before allowing insurance shopping across state lines. To a large extent, we don’t want health insurance companies to compete the way auto insurance ones do because it is more acceptable to charge someone a higher rate because they have been a careless driver than because they are old or had a parent die from Huntingtons.

  3. Mr. Hennessey, I have been following your blogs since April and have learned much. I agree with Joe’s comment but would add that your audience is limited and you need to get out of your bunker and shed some light on the uninformed.

  4. “We can handle the hard choices.”

    Can we? I ask you to take a quick look at this.

    “In the latest WSJ/NBC poll, 68% of respondents said raising taxes on families making more than $1 million a year was an “acceptable” option.”

    http://blogs.wsj.com/health/2009/07/30/poll-raise-taxes-on-wealthy-to-pay-for-health-care-overhaul/

    Apparently, 68% of Americans want someone else to pay for their health care and then they wonder why it costs so much. Do you have any idea how much I would spend on lobster dinners if you were paying the premiums for my lobster dinner insurance?

  5. Kingstu,

    You raise a good point but I think some of the poll numbers reflect a belief that Washington is so littered with wasteful spending that if politicians were less free spending our tax dollars on garbage there should be no need to raise taxes or cut services. This may or may not be enough in reality to deal with looming shortfalls in entitlements, but people might be willing to make difficult choices if they were presented with an honest argument about what needed to be done to prevent bankruptcy of the country. They are never going to buy an argument like the one they are being sold now though, because none of the proposed plans even do what they are supposed to do in order to prevent a catastrophe. I also think the President lost loads of credibility when he sold a stimulus under the same pretenses that has failed to live up to the hype. I think the President overestimated his ability to sell this to the American people.

  6. “The government would, in effect, control health insurance.”

    Wrong. The government plans to, literally, control every aspect of medical CARE in this country. The intent contained within those 1,017 pages of the House bill is whether or not you can be born, the kind of care you’ll receive during your life, and when and how you’ll die. They’ll control who is allowed to be a doctor, and even tell you how to raise your children.

    It’s deadly medicine.

  7. “They are never going to buy an argument like the one they are being sold now though, because none of the proposed plans even do what they are supposed to do in order to prevent a catastrophe.”

    In my opinion, people need to pay for their own health care with their own dollars. It’s the only viable long-term solution that will work in America. The American people will NEVER accept government rationing and they will never accept tax rates high enough to pay for unlimited end of life care…something has to give.

  8. Pingback: AIP Blog
  9. Why doesnt the government create “catastrope insurance” which everyone can buy into as a % of annual income (i.e. 2% of income). Set the “catastrople floor” as one average salary year over the last ten years. (all numbers are examples of course) The rest of insurance remains privatized. Premiums go down because the high outliers are covered through a government plan. This avoids the resdistribution and moral hazard issues current bills raise.

  10. In the discussion about universal health care affordability, one question seems never to be asked or answered: Which hurts us worse, large federal deficits or millions of people suffering with inadequate health care?
    Most people who don’t have health insurance can’t afford health insurance. So a law requiring people to buy health insurance is silly.
    Requiring businesses to pay for health insurance is equally silly. To pay more for health care, businesses would have to lower salaries or reduce the profits needed to survive. Which poison do you prefer?
    Any so-called “savings” in the health care system will come from doctors, hospitals and/or pharmaceutical companies. Pay doctors less and you’ll have fewer doctors. Already, some doctors have opted out of Medicare because of insufficient payments.
    We want hospitals to offer CT scans and PET scans, lots of well-trained nurses and emergency rooms that accept everyone who walks in. The machinery costs millions. The nurses, always in short supply, cost millions. Pay hospitals less, and you’ll have fewer and less equipped hospitals and fewer nurses.
    The pharmaceutical companies we love to hate, spend billions developing drugs to ease our pain and save our lives. Getting a drug developed, tested and approved costs hundreds of millions. For every success, a thousand failures. Pay pharmaceutical companies less and your cancer may not be controlled, and “swine-flu” may kill a million souls.
    Now consider those large federal deficits, we also love to hate. The media tell us deficits should be minimized. Except, no evidence exists that deficits have any negative effect on our economy.
    No, deficits have not caused recessions, depressions, inflations, deflations or stagflations. Deficits actually have helped cure most of these problems.
    No, deficits cannot force the U.S. into bankruptcy. In 1971, we went off the gold standard to give the government the unlimited ability to pay its bills.
    No, deficits will not make foreign nations stop buying our debt (though we can pay our bills without borrowing.)
    The simple fact the media never tell you: While federal surpluses have caused every depression in U.S. history, growing deficits have cured every recession and depression, and are necessary for economic growth.
    So, which hurts worse, large federal deficits, which historically have had a positive effect on our economy, or millions of people suffering with inadequate health care?
    The federal government can and should pay for universal health care via deficit spending.

    Rodger Malcolm Mitchell
    rmmadvertising@yahoo.com
    http://www.rodgermitchell.com

  11. @Rodger Malcolm Mitchell – So with no evidence at all, you think that taking over the industry to give a few to 10 million people health insurance who don’t currently have it is worth the cost to the medical field, our children, our grandchildren, and fiscal policy. With absolutely no evidence except the failing socialized health systems throughout the world, and with the inadequate Medicaid/Medicare/VA programs, I disagree.

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