Monday, July 28, 2008

Schroeder on the Wyden Plan

During the past week, four different people (including supporters and opponents) have drawn my attention to the "universal health care" plan proposed by Oregon Senator Ron Wyden, known as the "Healthy Americans Act".

I haven't spent much time looking into the details, but at first glance it appears to include many of the same elements that have made the Massachusetts plan such a disaster, including an individual insurance mandate, subsidies for people making up to 4 times the federal poverty level (FPL), additional restrictions on what sorts of products insurance companies must and must not sell, a "connector"-type agency to match customers to sellers, etc.

Pediatric cardiologist Dr. James Schroeder sent me the following insightful analysis, which I am quoting with his permission. (Segments in bold are my emphasis.):
Sounds like Romney-care gone national, with all the right buzzwords (choice, affordable, meaningful, etc). I especially like the phrase, "For starters, every American will have the power to choose - and will be required to choose - a comprehensive health insurance plan." So reminiscent of Hillary Clinton's 'we want you all to participate voluntarily, but if you don't volunteer we are prepared to make you participate' philosophy!!

The biggest bamboozlement is the comment that the employer tax break for health care insurance "costs" the government 200 billion dollars! So instead of giving individuals a comparable tax break, they propose taking that tax break away from everybody, and funding the subsidized portion of the program with that imaginary money. Sounds like a cost shift and a new tax to me, whether it ends up being mandated onto the worker or onto the employer, somebody is going to have to chip in that money.

The other typical stuff about increased efficiency because it's the government, and decreased utilization because the worker is paying the premium, and subsidizing up to 400% FPL is not surprising. The advocates of socialized medicine have learned the vocabulary of the market without applying any of the principles. This type of plan is the health care reform equivalent of a stealth bomber, because it is sneaky and it is going to bomb, for sure. Unfortunately, it seems like a substantial number of Republicans are prepared to go along with it because it sounds good superficially. Of course, in 2-3 years, when the cost overruns kick in and the government has to step in for "cost-containment" purposes, it will be too late, we will be smack in the middle of nationalized health care.
I believe Dr. Schroeder's analysis is completely on target. This sort of plan appeals to conservatives because it preserves the veneer of a "marketplace" while introducing still more government controls. Then when it fails (as it inevitably will), people will blame the failure on the "market" and say, "See, free market reforms don't work -- now we need to go to a fully government-run medical system."

Hence, it is critical that supporters of genuine free market reforms oppose this "stealth" socialism masquerading as market reforms.