Letters & Opinion
The pitfalls of ObamaCare Pt. 2
Considering the incentives and lower costs that the public option will provide, there will certainly be more than 5% of Americans signing up for the public option. This is when President Obama’s premium option becomes unattainable due to Moral Hazard. What Moral Hazard is this – protecting people against risks reduces the care people exercise in avoiding those risks. For example, when people have coverage for medical costs, people will inevitably spend more on healthcare.
Unfortunately, healthcare, like any other tradable commodity, is a finite good. As the demand for the public option’s healthcare rises, it is inevitable that the cost of meeting those needs will rise, which can only mean that premiums will rise. After a certain point, when the government is no longer able to provide a public healthcare option that is cheaper than the services provided by private health insurers, the government will have to choose one of two options.
The government could continue to keep the program alive while still providing lower costs to the public by subsidizing the program heavily. This would be in direct contradiction to President Obama’s promise that he would veto any healthcare initiative that would add “one dime” to the deficit, it also doesn’t make any sense in regards to President Obama’s mention of Medicare. One thing that the president was right about is the cost of Medicare –Medicare has an unfunded liability worth about $38 trillion. How does it make any sense to add to this nation-destroying debt by creating a public healthcare option that will surely make the deficit skyrocket even further?
Another option that the government could forge ahead with is, in order to ensure that the deficit doesn’t blow up; the government will have to either raise the premium rates of those who have opted to be part of the public healthcare option or raise taxes on the rest of the populace in order to continue funding the program. This will negate the very reasoning behind the creation of a public healthcare option – the lowering of healthcare costs.
Either fortunately or unfortunately, this is the point where the rules of economics give way to the game of politics. Should a bill that supports the creation of a public healthcare option pass through both in the House of Representatives and the Senate, it will become near impossible to reverse course and undo the program.
Case in point, before the creation of Medicare, it was the Republican Party that opposed it fiercely. In fact, prior to being elected the governor of California in 1967, Ronald R e a g a n was one of the biggest o p p o n e n t s of Medicare. A l t h o u g h there is no doubt that M e d i c a r e has helped c o u n t l e s s numbers of seniors a great deal to retain h e a l t h c a r e w i t h o u t becoming economically displaced, it also cannot be denied that Medicare could potentially ruin this nation’s economy.
Many in the Republican base had hoped that after being elected president, Ronald Reagan would begin to dismantle Medicare. Although there is no doubt that President Reagan was philosophically opposed to Medicare, both due to misplaced optimism in the resilience of the US economy and the game of politics, he did no such thing. The same is true of President Obama’s public healthcare option. Even when it reaches the point that this president’s healthcare option becomes as dangerous as Medicare, after it has passed, it will become near impossible to put this genie back in the lamp.
I desperately want to believe that President Obama will not sign a bill that adds “one dime” to our deficit and I also want to believe that the public option will not be subsidized by taxpayers but the reality of the political and economic situation is that President Obama’s promise is sadly a hollow one. The increased taxes that will be required to support this government-run program would be a huge drain on the economy, which would subsequently drastically reduce the incentives of Americans who earn higher incomes to work and invest. Behind the guise of aiding the downtrodden, President Obama and his supporters are threatening to make us all much worse off.
Damn the economy and damn jobs, the news of raising taxes will hardly come as bad news to those who support a larger role for the government, such as Representative Barbara Lee (D. California) who supports a single-payer system much like the Canadian healthcare system. But why is she and the rest of her supporters (and many of those people are solidly behind this president) willing to allow the government to levy even more taxes on the people considering the fact that the current tax system that we already have is unconstitutional? There is only one legitimate reason that the government ought to have to collect taxes – to raise revenue. Any other purpose is the very definition of corruption. And the tax system that we have is the government’s attempt at social engineering.
Ridiculous, you say? Then take this into consideration. The government encourages people to get married and become homeowners by handing out tax cuts and it discourages people from drinking alcohol or smoking cigarettes by spiking up taxes on those products. People might say that this is the government’s way of encouraging good behavior but the fact of the matter is that it is none of the government’s business in telling people how to behave. But it does. By giving the government additional power to tax us behind this guise of a government-run healthcare system, we are allowing the government to run our personal lives even more. And throughout history, whenever people cede power to government, government always uses that power and it never gives up power.
Supporters of the public healthcare option have often responded to this by asking why it would make a difference at all as to whom we take our orders from – the government or private health insurers – when the result is the same. There is a difference, however. If we do not like the fine print that are written in contracts of private health insurers, we can always switch health insurers until we come across one that meets our individual needs. When it comes to the government, however, unless we are willing to leave behind most of our friends and families and have been financially fortuitous enough to start over with a new life somewhere foreign, we don’t really have much of an alternative to the United States government. The government has virtually complete monopolistic powers and the government will be intruding into our private lives telling us how to live and how to behave. We already have laws for that. The government should have no business in controlling the lives of private citizens beyond the enforcement of already existing laws.
However, the conservatives are not without an alternative to President Obama’s plans for healthcare reform. One of the alternative plans that the conservatives are offering, an alternative plan which I personally think holds great promise, is Health Savings Accounts, which are basically tax-free individual accounts that people can purchase that will allow people to save money so that they can pay for their routine health care expenses directly without the need for a third-party. Of course, due to the reality of the political situation, neither Medicare nor Medicaid will be gotten rid of (though it needs to be reformed as soon as humanly possible) and therefore, these two government-run programs, along with traditional health insurance will be used for the truly catastrophic healthcare costs. By utilizing Health Savings Accounts, people will be more directly involved in their healthcare thus being in direct control over their own lives and destinies. Furthermore, due to the fact that the savings in HSAs are tax-free, people will invest their incomes the way they want to which will therefore improve savings and economic prudence, thus bringing about the age of personal responsibility and ending the age of false entitlement.
President Obama’s goal of creating a government-run healthcare, in this nation that was founded on the concept of federalism, is wishful thinking at best and at worst, a plan that will be detrimental to the economy. To quote President Ronald Reagan, “In this present crisis, government is not the solution to our problem; government is the problem.”
