The Obama Plan and Your Health Care

Blog / July 7, 2009

By the Honorable Arlene Wohlgemuth

President Barack Obama’s plan for health care, expressed in a letter to Senators Ted Kennedy and Max Baucus this month, was a wake-up call for the nation. The letter was followed by draft legislation and numerous press statements. As Washington tries to lead the nation down the pied piper path toward government-run health care, it is incumbent on the people to examine the promises versus the reality.

Obama’s letter promises health insurance for all: “I understand the Committees are moving towards a principle of shared responsibility – making every American responsible for having health insurance coverage, and asking that employers share in the cost. I share the goal…”

But the reality is that the government takeover will begin by requiring every person to have insurance and every employer to provide insurance, with a few politically popular exceptions. Polling shows that a significant majority of people – 61 percent, to be exact – do not agree with this policy. The Congressional Budget Office (CBO) estimates the mandate will continue to leave 30 million people uninsured.

Obama’s letter gives lip service to fiscal restraint: “Health care reform must not add to our deficits over the next 10 years – it must be at least deficit neutral and put America on a path to reducing its deficit over time. To fulfill this promise, I have set aside $635 billion in a health reserve fund as a down payment on reform.”

But as the CBO wrote on June 15, “…enacting the proposal would result in a net increase in federal budget deficits of about $1.0 trillion over the 2010-2019 period.” And the CBO excluded some of the costliest proposals such as Medicaid coverage for everyone below 150 percent of the federal poverty limit. Ten-year cost estimates now exceed $1.6 trillion, not including the costs pushed off on the states.

Obama’s letter guarantees cost controls: “… the recommendations of the Medicare Payment Advisory Commission….on cost reductions would be adopted unless opposed by a joint resolution of the Congress.”

What that means is the rationing of care. First, the government will cut payments to providers until there are so few left, patients will have to wait months just to see a doctor and then wait months again for treatment just like they do in Canada and England. Medicare reimbursements are already so low that few physicians will accept new Medicare patients, and Medicare is far more favorable than Medicaid or Children’s Health Insurance.

Second, the Institute of Comparative Effectiveness created in the stimulus bill lays the groundwork for denying care. That fear became reality last week when the Senate committee rejected along party lines an amendment that would have prohibited federal health care plans from denying services based on their “research.”

Obama’s letter pledges to the public that, “…if they like the coverage they have now, they can keep it….”

But as former White House senior economic advisor Keith Hennessey recently wrote, “If the government determines benefits, cost-sharing, relative premiums, expenses, and profits, and can take funds from one health plan and give them to another, then the insurance function is governmental.” Translation: no longer private insurance.

The “public option” creates a government plan that will be in direct competition with private insurance. Actuaries estimate there is a 70 percent chance the government plan will replace private insurance.

The inevitable results of health care reform driven by Washington politicians is that the American people will have their health care decisions made by government committees and will pay a higher price for it, though that price be through taxes instead of insurance premiums. Bloomberg reported on June 12, “Health-care overhaul legislation being drafted by House Democrats will include $600 billion in tax increases and $400 billion in cuts to Medicare and Medicaid, Ways and Means Committee Chairman Charles Rangel said.”

The stark realities of the health care proposals pending before Congress are higher taxes and less care. Americans deserve better.

The Honorable Arlene Wohlgemuth is a Visiting Research Fellow at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. She served 10 years in the Texas House of Representatives, specializing in health care issues.