Stop the Healthcare Bailout BEFORE it Starts

Full Article at The Heritage Foundation

"In his primary challenge with then-Senator Hillary Clinton, then-Senator Barack Obama said he was against government mandates that would force individuals to buy health insurance. Now that he is in power, President Obama is much more open to the idea. Before he departed for the Middle East and Europe last week, President Obama sent a letter to Congress explaining he would support mandates if they enabled him to also establish a government run health insurance plan. We’ve covered the dangers of a public health insurance plan before, so we’ll turn to a study written by one of Obama’s own nominees, HHS Assistant Secretary of Planning and Evaluation Dr. Sherry Glied, to detail why individual mandates would be terrible public policy:

High Costs: “Funds diverted from uncompensated care would not be sufficient to pay for the subsidies needed to cover most uninsured people. Eliminating the free-rider problem through universal insurance might make the health care system more fair, but it wouldn’t make it less costly.”

A New Tax: “The mandate is in many respects analogous to a tax. It requires people to make payments for something whether they want it or not.”

Special Interest Bonanza: “The relative invisibility of the mandate ’tax’ may make it easier for special interests to achieve their goals. The mandate, then, would become a means through which special interests use government to force transfers of funds from consumers to the health care sector.”

Unprecedented Intrusion: “Like taxes, a mandate requires enforcement if it is to be effective. …Developing a system to promptly identify and penalize scofflaws will take effort and ingenuity, particularly in our diverse and mobile country. It may require a degree of intrusiveness and bureaucracy that some will find unpalatable.”

The insurance industry’s willingness to accept a government mandated bailout is extremely shortsighted since it ignores the reason their industry is in trouble in the first place: existing government health care. The Los Angeles Times explains:

The industry’s real trouble begins in 2011, when 79 million baby boomers begin turning 65. Health insurers stand to lose a huge slice of their commercially insured enrollment (estimated at 162 million to 172 million people) over the next two decades to Medicare, the government-funded health insurance program for seniors.

“The rate of aging far and away exceeds the birth rate,” said Sheryl Skolnick, a CRT Capital Group healthcare investment analyst.

There is an alternative principled path to health care reform, which controls costs by putting health care decisions in the hands of consumers, not bureaucrats in Washington. Tomorrow at 7:00 PM, Rep. Paul Ryan (R-WI) will host a special tele-town hall to discuss a conservative vision for health reform. Sign up to join the discussion today."