Obama's Being Slick and Disingenuous on Healthcare

From Obama:

"When you hear the naysayers claim that I'm trying to bring about government-run health care, know this -- they are not telling the truth," Mr. Obama said in remarks prepared for delivery to the AMA. "What I am trying to do -- and what a public option will help do -- is put affordable health care within reach for millions of Americans."

In one sense what he's trying to do is a modest step towards insuring those who are uninsured. He is not, right off the bat, dismantling private health insurance plans through employers or for the self-insured. So, in the very short term he can claim he is not "socializing medicine." However, if you like to think strategically, it is easy to see why this is a first step towards a socialized, government-run healthcare system.

Companies incur a significant cost for providing health insurance to individuals. It is an operating cost on their balance sheets. Every company I have worked for has sent me an annual statement of my total compensation that includes my salary and the cost of my health insurance, which is one of my benefits. Depending on how a government, public option, health program is priced, you could easily see why there is an incentive for my employer to move me towards it in the longer term. If my company can move the cost of my benefit to a government run program, it would be in there interest to do so. At that point there is a competition between my private plan and the government plan. If the government plan is cheaper it makes sense to do so. It depends on what it costs for my company to do so. If the government plan is a "freebie" and there is no cost for my company to adopt it, they will. And I will be on the government dole for my health insurance.

In addition, if the government plan offers lower quality service and charges less, if anything to me and my employer, my private plan will follow suit. My company may still provide a private option but it will cost me much more to purchase it for my healthcare needs. I will likely see my premiums go much higher depending on how the tax is treated. It will be very difficult for any private plan to compete against a government sponsored program that has deep pockets funded by taxpayer dollars in the long term.

The argument that this could cut costs overall is ludicrous. Adding millions of people to the rolls combined with an aging population and opening up the pool of people by almost 50 million with minimal to no deductions and copays cannot possibly cut costs. Nobody can seriously believe that the government option could be more effectively administered. Medicare and Medicaid are two case studies indicating it is not cost effective. The only way to cut costs is to slash services and reimburesments to massive degrees. This means waiting for or just plain foregoing X-rays, needed prescription drugs, and other things. To say that we will all become healthier because of an emphasis on prevention is incredibly naive. To say that electronic record keeping will save enough to pay for it also defies credibility.

The only way to seriously cut costs and insure more people is to incentivize private companies to do so and engage competition and eliminate many needless regulations that insurance companies have to currently comply with that make up a relatively high proportion of administrative costs in private health insurance plans. The other way is to have pro-growth policies that help people to work for companies that provide health insurance. The fact that Republicans did not seriously move in this direction is one of their major failures during the past 8 years. They could have injected better market based healthcare plans to help cover the uninsured beyond simple medical savings accounts. They didn't and we're about to pay a steep price for their failure to seriously address the issue when they had the chance.

So when Obama says that this is not a government-run healthcare plan, he is either not thinking ahead about how employers and individuals are likely to react given the cost incentives discussed above -or- he is being slick, disingenuous, and plainly dishonest. You decide.