There's No Free Health Care
By Fred Barnes in The Weekly Standard
September 28, 2009
Give President Obama credit for persistence. And stubbornness. And lack of imagination. He declared again last week that his health care plan “will slow the growth of health care costs for our families and our businesses and our government.” And this historic achievement will be accompanied by a dazzling array of new medical benefits that everyone will receive—guaranteed by law. Okay, you’ve heard this before. But that’s the president’s story, and he’s sticking to it.
The question is, why? Does he think we’re stupid? His argument has failed to persuade a sizeable majority of the American people precisely because they’re not stupid. They understand the laws of addition and subtraction. When you offer more—much, much more in this case—of a good, it’s going to cost more. Somebody has to pay for it. Yet Obama says we’ll all be paying less, and that includes businesses and government.
If he could actually pull off this feat, he would indeed be the One we’ve been waiting for. But he can’t. This is apparent whenever Obama explains where the “savings” will come from. They’re from eliminating “hundreds of billions of dollars” in waste, fraud, and abuse (WFA) in the health care system. Surely, he knows better. Everyone in Washington recognizes these savings are imaginary. They’re offered with a wink. They never happen. President Reagan promised to slash WFA in the 1980s. The result: zilch. Where Reagan failed, Obama is not likely to succeed.
Obama may be unaware, but there are three programs—in Maine, Massachusetts, and Tennessee—currently testing his idea of get-more-pay-less. The evidence is already in: Expanded health care coverage costs more, an awful lot more. There are no known exceptions.
The test cases mirror Obamacare in one way or another. In 2003, Maine decided to cover the uninsured by expanding the state’s Medicaid program and creating a government-run “public option” to provide health insurance with subsidized premiums. Controls on hospital and doctor costs would lead to reduced premiums and savings for everyone, without tax increases, or so it was claimed. Five years later, “the system that was supposed to save money has cost taxpayers $155 million and is still rising,” the Wall Street Journal reported. Meanwhile, Medicaid enrollment has doubled to 22 percent of the state’s population, and access to the public plan has been capped.
In Massachusetts, “universal” coverage was enacted in 2006 along with a requirement that everyone be insured or pay a fine. (By 2009, the fine was up to $1,068.) Again, the claim was made—a claim Obama repeats—that costs would decline once everyone was covered. Today, 97 percent of Massachusetts citizens are covered, the highest rate in the country. But costs have soared to the point the _New York Times_characterized them as “runaway.” Spending on the state’s health insurance program has risen by 42 percent. A major cause shouldn’t have surprised anyone: The newly insured have flooded doctors’ offices for medical care paid for by others. Now Governor Deval Patrick, a close ally of Obama, wants to impose cost controls.
The Tennessee experiment began in 1994 with one thought in mind: curbing the rise in health care costs. TennCare was established to cover everyone either on Medicaid or unable to obtain insurance. Rather than bend downward, the cost curve has steeply climbed. In a decade, spending surged from $2.5 billion to $8 billion. To cope with this, the state is cutting the TennCare rolls and reducing benefits. The program still consumes a higher share of the state budget than any Medicaid program in the country.
Meanwhile in Congress, there’s a new strategy for financing Obamacare: Tax the health care industry. This, too, is bound to drive up costs. Take the $4 billion annual tax the legislation fashioned by Max Baucus would slap on the medical device industry. Not only would it dampen research into innovative technology, it would raise the price of medical equipment. The higher costs would be passed on to hospitals and doctors and patients, leading inevitably to higher insurance premiums. The president hasn’t voiced an opinion on this idea, though he’s praised Baucus for producing a bill.
Obama is stuck. He is promoting his health care plan as a money-saver because that’s what pollsters tell him the American people want to hear. But it’s plain to nearly everyone that Obamacare would be just the opposite. There is a way out: Propose a reform plan that would credibly curtail the growth in health costs. Such a plan exists. The president need only ask Republicans for a copy of it.