Could It Be A Smoke Screen?

Many Americans have been watching the health care reform debate in Washington with increasing dismay and disbelief.

Congress has been so doggedly determined to pass a bill that it has: passed a “bill” out of Senate committee that was only conceptual and not actually written; ignored legitimate warnings regarding the bill’s multiple violations of the Constitution; forged ahead despite surging public disapproval as we discover the actual provisions and costs; and attempted to silence the opposition by engaging in open and vicious attacks against critics in business, media, and the public.

Could these tactics be a smoke screen for the real problem facing the nation’s health care system?

Those of us who believe in free enterprise know that in most cases the solution is not more government; rather, the problem is the government. Government programs now account for about half of all health care expenditures. A quick look at the past performance of Medicare and Medicaid, enacted in 1965, paints a picture of what government-run health care reform will look like.

Data from the CMS National Health Expenditure chart show that from 1970 to 2007, total health care expenditures increased 460 percent. Dig deeper into the data and we find the real culprits driving up the costs: Medicare and Medicaid, each of which increased more than 1,000 percent and far outpaced their projected costs.

Yet the current proposals advanced by the President and Congress will add another 14 million people to Medicaid and put what is left of private sector health care into more regulated and costly government-controlled systems.

Medicare and Medicaid have intruded in the economics of health care by increasing the regulatory burden, misdirecting resources, and creating a system rife with fraud. The problems that plague these programs were not created by the patients and providers. Instead, Congress and bureaucrats have dug this hole, into which they now seek to throw the rest of us.

The costs for these proposals have been understated by Congress. The Texas Public Policy Foundation’s recent study by Arduin, Laffer, and Moore Econometrics, “The Prognosis for National Health Insurance,” calculated that the total national health care expenditures would increase by an additional 8.9 percent and U.S. economic growth would be reduced by almost 5 percent. The total cost of higher health care expenditures, higher taxes to pay for the new programs and reduced economic growth would be $4,354 for every man, woman, and child in the country.

This study was followed by a PriceWaterhouseCoopers study that concluded the Senate Finance Committee plan would increase the cost of private insurance by an overall 18 percent and families would pay $4,000 more for insurance than if no reform were passed. Higher premiums would undoubtedly drive everyone to the public option plan, or was that the plan all along?

While the reform’s costs are problematic, the much more serious concern is the unfunded liability America faces for these two programs. The Social Security Trustees report estimates that the unfunded liability for Medicare alone is $89.3 trillion-more than six times our nation’s economic output. This is the serious problem that exists behind the smoke screen of “health insurance reform,” and shoving everyone else into these or similar programs is simply going to make the situation worse.

Everything being proposed under the banner of “health care reform” has been tried and failed. It is ignorant for Congress to think it can try the same thing again and get a different result. And, if passed, the Obama version of socialized medicine would certainly give us all an equal share of misery.

It is time that Congress started addressing the real problems-Medicare and Medicaid. In the meantime, “do no harm.” Insurance and taxes are already high enough.

The Honorable Arlene Wohlgemuth is a Senior 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.