As mentioned in an earlier post, employer sponsored health plans dominate the health care market. As already stated, this poses a problem on at least five levels:

1. It reduces the incentives private health insurers have to create a variety of products that could be used by those who do not have group coverage through their employer.
2. It creates a dependence of employees on the employer for health care.
3. It creates a one-size fits all approach for the employees of the company.
4. It creates an ethical problem where an employee’s health is a form of compensation.
5. It means if you lose your job, you lose your health insurance.

This has to change - and that is coming from a Benefits Manager at a Pharmaceutical Company.

One Size Fits All

Employer sponsored health plans usually provide extreme levels of coverage. They can be so rich that they provide many more benefits than 95% of employees need. These plans are of little use but of high cost to everyone enrolled. It could also be the exact opposite – providing little more than the basics and at high costs. The ability to find a plan based on an individual’s needs doesn’t exist in our current system because employer sponsored health plans are not designed with the individual, bur rather recruiting and the masses, in mind. An individual focused plan also won’t exist in a government system. It will only exist in a free market system.

This reality is one of the other major reasons for the rise in health care costs - plans designed with the masses in mind. The customer in our industry is the masses - not the individual. It is the employer and not the employee.

If we are to create a free market where companies compete for people as customers, then you have to create a market of customers. One of the easiest ways of doing that is by ending the employer monopoly over health care.

In the book, “The World is Flat,” Friedman argues for health care reform that ends the dependence of the employee on the employer. Some would argue that this eliminates a very important part of an employer’s ability to recruit and retain top talent. However, this change can be done in two ways:

1. National Health Care Plan
2. Employer Vouchers for Health Care

I have already proven through logic and reason that the first option is too costly, inefficient and unjust for us to adopt. If faced with the facts and a choice between free market reform and government reform, the answer for most becomes obvious. Furthermore, National Health Care would also truly eliminate an important part of an employer's ability to attract and retain top talent.

Vouchers

The second option preserves this ability, takes health care out of the hands of the employer, places health care decisions in the hands of those who need that freedom, and is an easy reform towards Freedom and Justice in Health Care.

Rather than an employer paying directly for an employee's health care in an employer sponsored health plan, an employer can provider a voucher the employee could use in choosing their own insurance, co-op or health share plan - tailored to their own medical needs - that they can take with them to whatever employer they choose to work for (footnote 1). The voucher becomes the competitive piece an employer can use in attracting and retaining their talent – not the plan.

Furthermore, the employer can still receive a tax deduction for a voucher they provide for a private health plan – but not for contributions to an employer sponsored plan – that tax treatment goes away.

The end of the employer sponsored health plan greatly opens up the market to innovate in its product offerings and prices and allows all citizens of every level, employed or unemployed, rich or poor, young or retired, to receive the benefits of the increased competition that will result in the end of the employer sponsored health plan and increase of millions of individual customers. It would figuratively open up the flood gates into an area all but dead by decades of drought. It would bring life to our health care system and all would benefit.

This change should make every heart leap for joy in the true opportunities and blessings that await our Nation after true reform that restores Freedom and Justice to the health care industry.

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Footnotes

1. http://healthcare.cato.org/free-market-approach-health-care-reform

One of the largest issues in our health care market today is the complete dominance of employer based health care plans. This poses a problem on at least five levels:

1. It reduces the incentives private health insurers have to create a variety of products that could be used by those who do not have group coverage through their employer
2. It creates a dependence of employees on the employer for health care. In the 21st century we want employers to be able to retain top talent but not manipulate them through certain programs that should be transferable regardless of the employer.
3. It creates a one-size fits all approach for the employees of the company.
4. It creates an ethical problem where an employee’s health is a form of compensation.
5. It means if you lose your job, you lose your health insurance.

Some of these points are so obviously wrong that they merit no more discussion than proving that matter exists. Although more on this topic will be discussed at a later time, it is important to note that this dominance of employer based health care has been created, in part, by the tax treatment employers receive for offering health care. This has to end.

Employers receive a tax deduction for every dollar they spend on contributions made toward health care. It also reduces the amount of payroll taxes as employee contributions are all pre-tax. For employers looking for a break from the nearly 40% corporate tax rate, this deduction appears to be a win-win. However, it is only a win in the short term. The long term consequences are those we are now experiencing: a dearth of options for those who are employed without employer based health care, almost no private market for the low-income or retired, no options for the unemployed, and large business plans at large business prices forced into small business operations. The model is unsustainable.

A model encouraged by the Government now becomes criticized by them. Regardless of where the blame lies, reform must be enacted to establish Justice in our health care system by ending the dominance of employer sponsored health plans.

To do this, the first thing that is needed is to end the tax deduction for employer contributions to an employer sponsored health plan. If an employer wishes to contribute to a private health plan, this is another topic that will be discussed at a later time.

The second thing that needs to take place is end the special pre-tax contribution an employee makes to their employer sponsored health insurance. This special type of tax treatment is only for employer sponsored plans – it discriminates against all other kinds of health insurance type products. Let all health insurance type products be tax deductible – no matter where they come from (footnote 1). The type of tax treatment I already discussed should be favored rather than the current exemptions.

Certainly this change would have to be implemented over time and would have to include other reform in the US Corporate Income Tax code to allow private industry a chance to adjust to a truly free market system. Nevertheless, this should be a welcome change for all - corporations and individuals.

Government manipulation in the private market has in part created the problem we are now facing. Ending this preferential tax treatment on employer sponsored health plans will help place the government in its proper role, end an employee’s health as part of their compensation, reform health care in America, create an incentive for the industry to begin furnishing competitive health care products to individuals based on their needs and health care goals, and allow individuals to no longer be completely dependent to an employer for something so important. This must be an integral part in any change that is to lead to a better America.

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Footnotes

1. http://healthcare.cato.org/free-market-approach-health-care-reform

As has been shown, government involvement in health care is the true crisis at hand. The Federal Government is forced to find an additional source of funding for its tremendous unfunded liabilities. The most likely source for this new funding is through expanding its insurance jurisdiction. Amazingly, the government's involvement in health care is one of the major sources in the rise in health care costs throughout the industry. Its involvement has also completely removed any market for private insurers to offer products for the uninsured low income and elderly.

What incentive does a Blue Cross or CIGNA have to offer a low cost insurance product for the low income or elderly? They have none and there is no market. The government fully dominates these areas.

If we wish for the private industry to provide health care for all Americans, then the government must eventually get out of the insurance business. It is a fallacy to blame the industry and at the same moment keep the industry out of those markets. If we want the marketplace to work, the government will slowly have to step back. It is that simple.

How then do you open up these areas to the private market? The answer lies in limiting over time the role of Medicare and Medicaid. This doesn't mean take away these programs from those who already have them. The reform that is needed is in their future expansion and availability. If you want to help those with a low income be able to obtain affordable health coverage, you have to open up these markets. Here is how you do it:

1. Freeze the number of enrolled Medicare & Medicaid members at their current levels. As members fall off the rolls, do not replace them with new enrollees.

   
   

2. For a fixed period of time, such as five years, provide vouchers for those new applicants who would otherwise qualify for Medicare of Medicaid to purchase a type of coverage created from the newly established free market (Footnote 1). The vouchers could only be used to purchase a qualified plan that adequately meets their needs. This provides a “stimulus” into an emerging market and ensures that those who would have qualified for these government programs would still receive the benefits of insurance.

   
   

These adjustments would still provide coverage for those who presently can't afford it and provides a safety net during the transition.

Reducing the government involvement in health care on the side of insuring individuals is paramount to creating a fair and competitive market. This marketplace includes all options and the freedom to choose the type and level of coverage they feel is best for them.

This influx in members into privately ran options will further increase competition and lower prices. With more customers wanting private insurance (and not employer based plans), an opportunity would arise for the marketplace to provide various kinds of insurance plans and other health care options such co-ops and health shares. Through this kind of market creativity, people are better served. This is the direction we as Nation should be racing to go in.

Furthermore, by limiting the expansion of Medicare & Medicaid, you greatly reduce the burgeoning federal deficit. Five years from now the government can actually begin to reduce spending and use those tax dollars in other needed areas such as education, infrastructure and the national defense.

By creating a market that takes care of the needs the government has been dominating for the past 40 years, we not only are able to better provide for those in need but we are also able to help restore the government to a sustainable level.

Responsible health care reform, such as this, will still take care of those on government health care but will also provide a way to create a marketplace for the low income and the elderly.

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Footnotes

1. http://healthcare.cato.org/free-market-approach-health-care-reform

As was just discussed, there need to be options for the American consumer to choose in health care.

In the reformed world of free market forces, those options so far include:

1. Health insurance purchased in a market that truly competes
2. Health security through a co-op or HealthShare
3. Remain uninsured by using the formula discussed in my past post

There is another product that exists that could become 3a: Health Savings Accounts.

Currently, health savings accounts are attached to a high deductible health insurance plan. This is further evidence of the entire monopoly that insurance companies enjoy over our health care market. There are tremendous benefits to HSAs and those benefits need to passed onto more than just the insured.

Michael Cannon of the CATO Institute, in his paper, "Large Health Savings Accounts: A Step toward Tax Neutrality for Health Care," proposed making some changes to HSA's which would encourage more competition and therefore drive prices down to a competitive level. His proposals are as follows:

1. Increase HSA contribution limits dramatically. For illustrative purposes, assume the maximum annual contribution limits would be roughly tripled, from $2,850 to $8,000 for individuals and from $5,500 to $16,000 for families.

2. Remove the requirement that HSA holders be covered by a qualified high-deductible health plan. HSAs would be open to those covered by any type of insurance, as well as the uninsured.

3. Allow HSA holders to purchase health insurance, of any type and from any source, tax-free with HSA funds.

Cannon writes, "Restructuring the exclusion for employer-sponsored health benefits in this way would enable more individuals to obtain health insurance that matches their preferences, would increase efficiency in the health care sector, and could reduce inequities created by the exclusion. These changes also offer a means of limiting the currently unlimited tax exclusion for employer-sponsored health benefits that may be more politically feasible than past proposals. " He concludes: "Large HSAs could serve as a step toward a tax system that offers no preferred treatment to health expenditures, and thereby forces the health care sector to accomplish more with the resources devoted to it (Footnote 1)."

This option, tied to the one previously discussed, would create a truly viable option for the uninsured. Such an expansion of the HSA could be an additional product that would bring more competition, and therefore greater options at lower prices, to the consumer.

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Footnotes

1. http://www.bepress.com/fhep/11/2/3/

As discussed in my previous post, the market has failed to deliver options that create competition, add value and drive down prices. Reform is badly needed to restore Justice to our health care system. One reform that must be looked at is decreasing the amount of risk the uninsured have to bear.

One of the major advantages the insured have over the uninsured is that, although their premiums are astronomically high, the cost is not nearly as high as the actual cost of major health care services. Because the actual cost is so high, people purchase insurance to keep themselves financially safe in case the need arises.

Insurance companies are able to pay out billions of dollars in bonuses and profits because they are able to leverage their huge population of insured individuals against hospitals and doctors and demand, or rather force, them to accept less for the services than they would have otherwise billed.

The government with its even larger population of insured is able to do this even “better” than insurance companies. This creates some unintended consequences within the whole system. For example, a typical profit margin is 30%. If Medicare reimburses you at 60% of billed charges, you have actually lost money. The provider has to make it up somewhere. Who do they pass it on to? The insurance companies and the uninsured. This pushes up premiums and costs at an alarming rate and financially devastates those without insurance. Because of the fear of the financial loss that comes from being uninsured, people will eventually do all they can to get insurance.

Increased competition will lower costs. In addition to the other recommendations I have made, one more reform that needs to take place is a measure that places a maximum amount the uninsured can be charged for medical services. This would increase competition and provide a level of security. For example, if the original price of a service is $1,000 and the insurance company reimburses the provider $500 for the service, the uninsured should not be stuck with the full bill of $1,000. That however is exactly what is happening in most cases.

There certainly should be some advantages for having insurance. However, one of them should not an exclusive window to discounted prices.

There is no easy way to solve this problem. If you lower prices on some customers it has to be raised on others. The problem is that the uninsured are always the ones who get the worst end of the equation. It is not Just that a system which presently forbids competition and forces prices up leaves those who cannot afford insurance left in the most vulnerable situation.

So, what is the solution?

The most logical solution is that the uninsured will not pay more than 1xx% of the average reimbursement amount (or the advantage the insured enjoy) the Insurance Provider pays for a given procedure, test, or visit. It seems right to me, that the percentage should be about 120%. The exact science of this formula would have to be determined. When using this formula in the situation above, the uninsured consumer would have paid $600 instead of the full $1,000. Through health reform legislation, the differential, or $400, could become a tax deduction for the provider or even a temporary tax credit.

Even without the extra protection from the tax code change, this could still be a viable option. However, without the tax benefit, this push prices up in other areas. Nevertheless, the insured still would enjoy the advantage they expect by being insured and the market would find the appropriate balance with these safeguards in place.

With or without the tax code change, being uninsured becomes its own product. It comes with a risk but it also comes with a safeguard – or type of insurance - and possible reward based on the health of the individual. More on this topic will be discussed in my next post.

This is not the perfect solution. However, it is one solution among many that must be considered. Bringing the insured vs. the uninsured costs to a similar level creates options for the American consumer. With this kind of safeguard, the consumer has options: remain self insured or purchase health insurance. Whereas presently, the consumer doesn't truly have a choice. They are forced into one situation or another. Furthermore, this kind of provision could be one for a temporary duration of time, for example of five years, while the health care market begins to grow and take hold on free market principles. As it does, other options will be created that will provide the insurance and protection needed. For the time being however, this is a necessary change to provide justice in an unjust and perhaps even predatory system.

Choice lowers costs through increased competition and options. If we believe in health care for all and in prices that all can afford, this is something that must be debated and considered.

As shown in my last post, monopolies in health care are at the core of the problem we all must deal with. To break up monopolies, there need to be other options in health care for people to choose besides health insurance. Options create competition and competition drives down prices.

Presently, if you do not have insurance you are left incredibly vulnerable. Health care expenses can be astronomical. Health care needs can be detrimental. When combined together, the sum often is unbearable suffering of both body, mind and pocket book. The lack of options puts all of us at a disadvantage.

Because of the lack of options and sadly for the American consumer, it is difficult for a person to get medical insurance at an affordable rate. Here is why:

1. Monopolies in health insurance have allowed prices to climb un-challenged by the market because no true free-market exists
2. Pre-existing condition clauses increase premiums for all and often eliminate badly needed care for those who need it most
3. Price are so high for medical insurance that people cannot afford it if their employer is not subsidizing it
4. There are so few insurance companies to be able to choose from that the lack of competition reduces the need these few companies have to compete for customers. This dearth of choices eliminates all competition for better service at lower prices

In this setup, the consumer has only three choices if they don't have a job or have one that doesn't offer health insurance: pay an incredible amount for an individual insurance policy, purchase a high deductible health plan, or risk going uninsured. Many people take the risk of going uninsured because they simply cannot financially afford their own policy.

This is a failure of the market. We already discussed one change that has to be made. Here are two others:

· Privately Ran Health Care Cooperatives or HealthShares
· The establishment of standards for rates billed to the uninsured vs. the insured

The latter will be discussed in a later post.

What are Health Care Cooperatives or HealthShares?

A health care cooperative is a group of individuals who join together to insure each other's health needs. The cooperative is owned by the members of it. It is similar to that of the Credit Union model. I am not referring to a managed care health care cooperative where the Co-op provides the medical services in addition to the coverage. I am only referring to a cooperative that acts as the insurer. This kind of cooperative would allow for competition in the health care reimbursement market.

One such HealthShare is Altrua (http://www.altruahealthshare.com/)

Here is an introduction to Altrua from their homepage:

“You're probably here because you're looking for affordable health insurance. Would it surprise you to learn the answer to affordable medical benefits may not be health insurance at all?!“Altrua HealthShare is not health insurance. Altrua HealthShare is a nationwide faith based membership of individuals who share in each other's medical needs by bearing the burdens of others.“Because we're not health insurance we can offer our members lower monthly costs than they were paying for health insurance AND provide MORE options and service than they were receiving.“Health sharing began over 30 years ago as a non-profit medical need sharing concept of members caring for one another. And it's becoming more popular every day as a trusted alternative to health insurance.”

You can probably get a feel for the advantages of such a product. Our health care market needs more of these types of options for the American consumer to choose from.

However, through tax code treatment, co-ops are discouraged over health insurance. This discouragement further entrenches the insurance & government monopoly over health care. This entrenchment is what has brought us to the current crossroads.

If we wish to increase competition in health care, we would be wise to learn from some of the things said by the The Heritage foundation:

“If Congress wants to provide Americans access to health co-ops, it would need to make it possible for an institution to combine tax-exempt (non-profit) status with mutual insurance status, something health plans cannot do today. Congress should allow mutual health insurance companies to form based on the credit union model. Under this model, Congress would simply grant non-profit status to mutual insurance companies, justified by the "member benefit" they provide.

“Very likely, with this form of health care arrangement possible, various non-profit memberships and other organizations might link with a health co-op to make coverage available. State farm bureaus or consortia of churches, for instance, could establish such co-op health insurance.

“In addition to these steps, addressing the tax treatment of health plan benefits in the individual tax code would help spur co-ops. If families could receive the same tax relief for joining a co-op--or any other free-standing health plan--as for enrolling in an employer-sponsored plan, there would be new options for the uninsured or underinsured (Footnote 1).”

Further options equals additional competition. Additional competition, as long as the Antitrust exemption has been removed, means additional benefits to the consumer through increased services at lower costs. This will lower health care costs and increase options for the uninsured.

In short, it will help to bring about Freedom and Justice in health care.

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Footnotes

1. http://www.heritage.org/research/healthcare/wm2493.cfm

What is the end or purpose of Government? According to the first draftsman of our Constitution, “Justice is the end of government. It is the end of civil society. It ever has been and ever will be pursued until it be obtained, or until liberty be lost in the pursuit (Footnote 1).”

We need government and we need it to administer justice for all. Therefore, government has a place in health care. As has been plainly illustrated to a point beyond reasonable argument, that place is not in the further entrenchment of the government in taking over private industries but is rather in regulating them and seeing that the principles of Justice and Liberty are protected and strengthened – not lessoned or altogether destroyed.

An over zealous government, however, is not the only way to lose Justice and Liberty. Unfair and unbridled capitalism can be just as dangerous to justice and the liberty of the People. To protect the citizens of a Free country against the usurpation of power and undue influence by others, including corporations, government serves as the arbitrator and administrator of supposedly blind justice. These just laws bring all mankind to the level and force us to operate as equals – each having their fair chance to succeed or fail based on their own efforts, or lack thereof, and not by the unfair forces of others.

One such just law is the the Antitrust law.

In 1993, the Supreme Court ruled that the purpose of this laws is:

"not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself (Footnote 2)."

If, from this statement, Antitrust laws are instituted to protect the public from the failure of the market, can we not infer that one of the major causes of market failures is a lack of competition itself – hence the need to create and enforce such laws? Indeed we can.

And, who will not agree with the fact that the health care market has failed the consumer by not providing them with quality services at affordable prices? So, if the health care market has indeed failed us, can we not conclude that part of its failure is based on the injustice of trusts or monopolies which altogether eliminate competition and free market forces? Again, indeed we can.

The failure that has lead us to this issue has arisen from a suppression of the Free Market – not the result of a free market - and an unjust protection by government on the insurance industry.

I will explain.

As much as some would like us to believe that reforming health care is a complicated issue, the truth of the matter is that making some very basic and essential adjustments would do more for American health care than most of the changes being debated. The most basic and immediate of changes that is needed is reforming the insurance industry to increase competition. One major obstacle toward creating a competitive market in health insurance is that the insurance industry, by law, doesn't have to compete.

The Insurance Industry is one of only two that are exempt from Federal Antitrust laws. The other industry is that of Major League Baseball (how did that happen?). Again, by law, insurance companies do not actually have to compete on a fair and level ground with each other. On the contrary, they are free to fix prices, collaborate on product offerings and gather information together. How is that a free market? It isn't. Also, in such an environment how can prices be driven lower through market forces if free market forces don't even exist? The answer is they won't ever go down. On the contrary, because of the ambition and self interest of man, they will only go up.

If we want the market to succeed as it does in every other well established industry, wouldn't we want “to protect the public from the failure of the market” and institute a law against health insurance monopolies “which unfairly tends to destroy competition itself”?

We would – absolutely.

Accordingly, that is why the first, and most basic reform in creating a free market health care system that works for America, is that of repealing the Antitrust exemption health insurance companies enjoy. It is necessary. It is absolute. It is non-negotiable if we are to truly create an environment where Justice is administered and society is blessed. Only by creating an environment where companies compete for business will better service at lower costs be offered. This is the first step to that.

Both an over zealous government and unfair and unbridled capitalism are detrimental to justice and the liberty of the People. To restore Justice and Freedom to the health care industry, this is a recommendation that must be enacted.

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1.Federalist #51, James Madison
2.Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 458 (Supreme Court 1993)

Even though the current plan being debated in the halls of congress will expand coverage for more individuals, it does nothing to improve health care in the United States over the long run. It will actually deteriorate its quality as has been seen recently in Canada and Norway. In Canada their health care system was found nearly unconstitutional because the level of service was so poor and sub-standard that it was not meeting their constitutional requirement for health care (Footnote 1). The supreme court of Norway recently found the incredibly long waiting line to see a doctor illegal and mandated that the government actually transport its citizens to foreign countries to receive their needed health care (Footnote 2). The deteriorating level of care is a result of the government's monopoly on health care and the lack of a free market at work – the very system being devised for us.

Despite the American health care system being the best in the world, we should in means be pleased with how it works or fail to make major reforms to our ailing and inequitable system.

Currently, our health care system is one of government manipulation in the marketplace, monopolies in the insurance industry, and a dearth of options for the individual when it comes to their own insurance options at a price that is unaffordable for almost everyone. It has to change. I am, and think the American public should also be, for Freedom when it comes to health care.

I have said much about the President's plan and have shown how, despite its best intentions, it is destructive of individual freedoms and is the wrong direction for America in the present and future at the individual, national, and family level. The case I have presented is strong in its opposition to the current plan. However, reform is very badly needed or else the status quo, which is also wrong for America, will continue.

Necessarily then, I will now proceed to show the type of reform that is needed to bring about sustainable and improved health care for all desiring citizens.

Health Care Reform must include health insurance reform. The kinds of reform that are needed are as follows:

1. End the exemption to the federal anti-trust laws that the insurance companies enjoy

2. End the monopoly insurance companies have over health care reimbursements through:

   • Privately Ran Health Care Cooperatives
   • The establishment of standards for rates billed to the uninsured vs. the insured

3. Freeze Medicaid & Medicare at their current levels

4. End the Federal Government's manipulations on the health insurance market by eliminating the payroll tax deduction on employer contributions made to health insurance

5. Reform tax treatment for health care costs

6. End the employer based health care plan monopoly over health insurance

7. Increase competition within the insurance industry by creating a health insurance exchange that includes insurance plans across state lines

8. Eliminate the pre-existing condition clauses for most plans

9. Change the way health care is paid for: results vs. procedures (which is a valuable part of the current plan under debate)

Over the next several weeks I will expound upon each one of these and the potential impact they would have on the insured, the uninsured, and the American tax payer. These concluding pieces will show how the principles of Freedom and Justice are the most effective, principled, and correct rules to guide our actions in bringing affordable health care to Americans and supplying them with the best quality and level possible. Freedom, together with the government in its proper role, can truly create a more perfect Union, ensure domestic tranquility, and promote the general welfare of the the Citizens of the United States of America. Freedom truly is the last best hope of man.

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Footnotes

1. http://www.opinionjournal.com/editorial/feature.html?id=110006813

2. http://www.cato.org/mediahighlights/index.php?highlight_id=731

I got the following directly from http://www.barackobama.com/. It explains better than anything the health insurance exchange:

“The Obama-Biden plan will create a National Health Insurance Exchange to help individuals purchase new affordable health care options if they are uninsured or want new health insurance. Through the Exchange, any American will have the opportunity to enroll in the new public plan or an approved private plan, and income-based sliding scale tax credits will be provided for people and families who need it. Insurers would have to issue every applicant a policy and charge fair and stable premiums that will not depend upon health status. The Exchange will require that all the plans offered are at least as generous as the new public plan and meet the same standards for quality and efficiency.

Insurers would be required to justify an above-average premium increase to the Exchange. The Exchange would evaluate plans and make the differences among the plans, including cost of services, transparent. The Exchange will have the following features:

Comprehensive benefits. The benefit package will be similar to that offered through the Federal Employees Health Benefits Program (FEHBP), the program through which Members of Congress get their own health care. Plans will include coverage of all essential medical services, including preventive, maternity and mental health care.

Affordable premiums, co-pays and deductibles. Participants will be charged fair premiums and minimal co-pays for deductibles for preventive services.

Simplified paperwork. The plan will simplify paperwork for providers and will increase savings to the system overall.

Easy enrollment. All Exchange health insurance plans will be simple to enroll in and provide ready access to coverage.

Portability and choice. Participants will be able to move from job to job without changing or jeopardizing their health care coverage.

Quality and efficiency. Participating hospitals and providers that participate in the new public plan will be required to collect and report data to ensure that standards for health care quality, health information technology and administration are being met.”

I love this concept except for two very important points:

For the health care exchange to truly increase competition, it needs to extend beyond state boundaries. To have two to four companies competing against each other isn’t competition. In most states that is what it will be (Aetna, Blue Cross, CIGNA and some other provider). Health Insurance reform must change the way insurance is written in the states and begin to allow plans to extend beyond single states. If you want to see competition, try 10-20 plans that offer comprehensive in-state and out-of-state benefits competing for your business – that is when you will really see the benefits of this kind of exchange.

The public option will drastically reduce the private insurance industry. The Free Market is the best road for reform and the Public Option will forever close it. You cannot just rebuild an entire industry once it has been destroyed. Rather than destroy it we must seek to make it better.

The health care exchange with the public option is just a mechanism to get people onto the public option quicker than they otherwise would be and therefore would lead to a decline in the free market even faster. The attached video shows the intent of the exchange and public option.



The exchange could be a wonderful tool if used to truly increase free market forces and did so with the modifications listed above. Otherwise, it is a wolf in sheep’s clothing as shown in the video. Free market reform must include the Health Insurance Exchange as tailored above. A modified exchange is an excellent idea that we must push forward. If not modified, it will become a political tool and the consumer will lose.

Some may think we are close to time travel but we can be assured that the masses don't have power to use it within the next generation or two. For if they could, they would comeback in droves and wage a revolution of their own with an all too familiar battle cry: “No taxation without Representation!”

Surprising to us however, we are the tyrants and they are ones we have put in chains. How? Deficit spending and our national debt are exactly that – taxing those without a voice in our political process, the unborn that is, and laying the burden upon their shoulders.

Chief Justice John Marshall wrote in 1819, “The power to tax is the power to destroy (Footnote 1).” It certainly is a power that, when misused, can lead to a destruction of economy, prosperity, growth, and liberty. It is also a power that when properly wielded provides for efficient government, enforcement of the law, protection of our citizens, and support for the prosperity of the people.

Because it is a double edged sword, and because it is the people's money that must be collected, the power of taxation can only be justly employed when it is by representation of the people who must be taxed.

If you and I are represented by our Congressmen who serve us for the duration of their term, who is it that represents those who are not yet even alive? By the law of representation, no one can.

If we believe that representation is the only just way to regulate taxation, burdening the unborn and unrepresented with the expenses of today is unjust and immoral.

Debt is bondage. Anyone who has had debt knows the truth of this saying. To be in bondage as a result of our own choice is one thing. To be in bondage for the choices of the dead is entirely different and infinitely more cruel. It is a form of slavery, taxation and redistribution of wealth to which they will see and receive almost no benefit (Footnote 2).

It is simply wrong to ask future generations to pay for our education, our wars, our freedom, our cash for clunkers, and our welfare entitlements. There is no way around it. It is simply wrong and unjust. The unborn are not the recipients of the benefits of these policies, entitlements, programs and wars. Alonzo Fyfe put it this way:

“The National Deficit is the redistribution of wealth – the value of the slave labor – that is to be taken from those who have no political voice to be handed out to those whose votes the politician wants to buy.

It is no different than imposing a tax that is imposed only on those who are black, then using that money to write checks that are distributed to white people (Footnote 3).”

Certainly there are some rare exceptions to when this would be just. However, those exceptions are rare and involve in no way entitlements for the living today.

As has been shown in several of these short essays, the true costs of health care reform placed on the American taxpayer are not even fully known but surely far exceed those being projected. Current unfunded liabilities for Medicare are already $74 trillion (footnote 4). Currently, the house version of the health care reform bill has over $13 trillion of unfunded liabilities (footnote 5). As much as I agree with the President that health care reform should be deficit neutral, the fact of the matter is, it won't be. Among so many other things, the government's management of Medicare is proof of this.

Paying for our health care is our responsibility. We cannot argue with this. We cannot put our children and grandchildren in bondage for our benefit today.

If we create a bondage for those who cannot be represented in the process, and redistribute their wealth even before they are born and have a chance to acquire it, it is the truest form of taxation without representation and the greatest form of tyranny and oppression.

If We the People, through our representatives desire this kind of health care reform, then so be it as long as we, and only we, are the ones who pay for it. If we make this choice, then we must live with the consequences – not the unborn and those who have no voice in our system, those whose futures should be their own, and not ours, to decide.

Our beautiful National Anthem contains these solemn words:

“Oh, say does that star-spangled banner yet wave

O'er the land of the free and the home of the brave?”

It may yet wave, but for the unborn they are not free. And for us, if we fail to do the right thing and not take responsibility for our freedoms and privileges by paying for them in our own time, then no longer can America be called the home of the brave - as Bravery is to do the right thing in the face of difficulty and opposition. Bravery is to sacrifice. Bravery is to seek the truth and to live by it. Let us be Brave and keep ourselves, our children and our grandchildren Free.

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Footnotes

1. http://www.bartleby.com/73/1798.html

2. http://chestofbooks.com/finance/Amasa-Walker/The-Science-of-Wealth/Fallacies-Respecting-A-National-Debt-Part-3.html

3. http://atheistethicist.blogspot.com/2009/06/sad-fate-of-future-generations.html

4. http://online.wsj.com/article/SB120373015283387491.html

5. http://www.cato.org/pub_display.php?pub_id=10422

“I've also pledged that health insurance reform will not add to our deficit over the next decade, and I mean it...

President Obama July 22, 2009 (Footnote 1)

I believe this is a laudable and praiseworthy goal and I hope it is true. However, in what reasons, assurances and truth do I have to hope?

The American people have no basis upon which to believe anything from Washington D.C. when spending money is concerned. If you need proof of that, as of the moment this post was being written, our National Debt was $11,889,652,785. What does that look like? According to CNBC.com, “If denominated in $1 bills, the cash would stack as high as the tallest building in the world, the 2,683.7 foot Burj Dubai skyscraper… 1,474,918 times. At this height, it would create a block of bills with a base approximately twice the size of the Empire State Building's, which is just under the size of three American football fields.

If consolidated into a single stack of $1 bills, it would measure about 749,666 miles, which is enough to reach from the earth to the moon twice (at perigee), with a few billion dollars left to spare... It is also interesting to note that this number is approximately 13 times the amount of US currency in circulation, according to the Treasury bulletin, which lists the amount at $853.6 billion as of December 31, 2008 (Footnote 2).”

If you need further proof, think of the Iraq War, Medicare, Medicare Part D, and the War in Afghanistan. Almost all of this debt is from former administrations and we cannot blame the current president for past errors. Our national debt and recent events however show a long train of abuses when it comes to the public purse. Even now, President Obama continues to fund our wars in Afghanistan and Iraq through supplemental bills just as President Bush did so he can say how his budget cuts the deficit when it really doesn't. Four weeks ago he touted on Prime Time TV how he had cut the deficit by $2,200,000,000,000 (Footnote 1). Yesterday the White House announced that they had reduced it by only $200,000,000,000 (Footnote 3). That is a two trillion dollar error in a matter of weeks.

The President said, “I'm not going to sign a bill that, for example, adds to our deficit.” However, this year the Federal Government has spent $1,580,000,000 that it didn't have (Footnote 3). Granted, a lot of that was emergency spending for things that many believe may help our economy in the short term. However, not all of it has been helpful and some would argue that none of it was necessary or helpful - including the non-partisan congressional budget office (Footnote 4).

So, on what grounds do we have to believe the current President's projections for how much health care reform will cost? We have no such grounds. Those who do believe the government's projections are disregarding not just history, but the present reality.

If we can't trust the cost projections, how can we trust the President when he says “health care reform is not going to add to that deficit”?

Reality has proven to us that costs are always higher than they tell us. The president tells us that health care reform will cost $1,000,000,000,000 over the next 10 years (Footnote 5). Is that all? Some project health care reform to be $8 trillion over 10 years…60% as large as our current national debt (Footnote 6). Even the current house bill has a projected budget shortfall of $13,600,000,000,000 (Footnote 7) – far more than the $1 Trillion being discussed. According a Walt Street Journal article last year, Medicare alone has an unfunded liability of $74,000,000,000,000 (Footnote 8). How will all of this be paid for? It will be paid for by deficit spending – that is, taxing the unborn to pay for expenses today.

The fact of the matter is, they are not being honest with us regarding the costs of the bill in an effort to pass it. This will cost much, much more then they are telling us because a) it always does, and b) government programs always expand over time. We have to account for this.

To not be honest about the costs and what this means for us in the near and long term is irresponsible and misleading at best, reckless and dishonest at worst. In either case, it is a far cry from good government and representative democracy.

The right way to do this would be to be open and honest about the costs and the reality of what it will take to pay for it. But we're dreaming if we think that will happen...

The president and those who are pushing for this change and trying to sell it with these cost projections are peddling dreams – not reality. And even worse, their dreams will become our financial and economic nightmare in the not too distant future as the public becomes straddled with the true costs of government health care reform and are forced at all levels and in more than one way to pay for it.

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Footnotes

1. http://voices.washingtonpost.com/44/2009/07/22/transcript_of_obama_prime-time.html

2. http://www.cnbc.com/id/30108264/?slide=12

3. http://www.reuters.com/article/newsOne/idUSTRE57K4XE20090821

4. http://www.washingtontimes.com/news/2009/feb/04/cbo-obama-stimulus-harmful-over-long-haul/

5. http://moneywatch.bnet.com/economic-news/article/health-care-reform-what-it-will-cost-you/330206/

6. Health Reform 2009: Watershed or Waterloo? A Lockton Benefit Group Webcast

7. http://www.cato.org/pub_display.php?pub_id=10422

8. http://online.wsj.com/article/SB120373015283387491.html

For those who have read any of my recent articles, it is no mystery what my views are regarding most of the parts of the proposed health care overhaul bill. I want reform just as badly as the President but I want a different kind of reform and, throughout these posts, have been making part of that case. However, before proceeding, I must first declare how utterly wrong and contemptible many of the techniques are that are being used either to sell or thwart the proposed legislation.

I do not support the derogatory label of “Obamacare” or the likening of this legislation to that of the Nazis. I am disappointed in those who would attend a public forum and use it to turn it into a shouting match. I am disappointed at those who would deface property, resort to calling names and make crazy accusations about our government with such things as death squads and fascism. They have deceived themselves into thinking that the desired end justifies the means. And importantly, it seems as though they have failed to remember that Americans are generally good people and that our Representatives generally try to do good and to help our country – in both Parties.

Conversely, the techniques of not being honest about the reasons, alternative solutions, true costs, and possible outcomes of this proposed legislation is dishonest, sinister and wrong. They too have fooled themselves into thinking that the desired end justifies the means.

They both err in that you cannot separate the end from the means – the means become the end. The means being used on both sides will not lead us any closer to a society of peace, unity and brotherly love. In fact, they lead us further away from the very thing we seek to create.

This is still America and we all still love our Country – no matter what side of the isle we are on. The primary difference is not in what we want to accomplish but in how we wish to accomplish it. Just as you cannot separate the means from the end in the legislation being discussed, you cannot separate the means from the ends in the techniques that are being used to thwart or pass it.

Respect, honesty, reason and building on common ground must be the means as it is the only end we truly desire. The current tactics will only further divide the ground we are on and cause us to no longer be One and Indivisible.

Those exalted and noble means are what we must expect from ourselves and one another – on all sides of this argument. That is the only way we will actually become anything better as a result of this debate. We want to build a better society; the place that begins is within each one of us and in the choice of means we use to get there. In this debate and all others, let us all make the choice to take the road less traveled – that of respect, honesty, reason and building on common ground – as that is the one that makes the difference.

Discovering the true cost of Health Care Reform is paramount to finding the proper way to fund it. To do that, we have to look at many different sources, including the White House and the press. I found this article provided an important perspective on the debate. I hope you enjoy.

by Jagadeesh Gokhale and Kent Smetters

This article appeared in National Review (Online) on August 6, 2009.

Even a popular president like Barack Obama cannot win arguments against two forces: God and mathematics. While the president has openly shared his reverence for the former, he has decided to take on the latter. It's a fight that he will lose.

Upon taking office, President Obama decided to postpone his campaign promise to implement a true cost-saving reform of Social Security and Medicare. Instead, he's trying to expand the nation's entitlement offerings with massive new government spending on health care.

The Congressional Budget Office's mid-July "score" of the main House health-care bill puts the price tag at about $1 trillion over the next decade; the Blue Dog Democrats managed to shave off only about $100 billion. But ten-year budgets, as even the CBO has warned in the past, are not reliable for assessing entitlement programs. Most of the spending in the House plan is phased in over several years, making the ten-year cost look deceptively small. Extending the budget window by just three years doubles the program's cost to over $2 trillion.

This enormous shortfall is equal to about 1.6 percent of all future projected GDP, or 3.5 percent of all future payrolls subject to Social Security taxes. From those numbers, this additional burden might actually seem manageable. But President Obama promised that he would raise taxes only on those in "rich" households.

That's where the arithmetic gets especially interesting. Funding the new health-care plan on the backs of households making $200,000 or more per year would require permanently increasing their annual total tax payments by about 50 percent. So, for example, a household that currently pays $50,000 in federal income taxes would need to pay another $25,000. Remember, however, that Social Security and Medicare already face enormous shortfalls. Shoring up these programs — another Obama campaign promise — would require collecting 328 percent more tax revenue from the rich. No, we didn't forget a decimal point: That is three hundred and twenty-eight percent.

Most households making between $200,000 and $500,000 per year would not have enough money to pay their federal, state, and local tax bills, much less eat. Rich households in California or New York would not be able to pay their tax bills regardless of their incomes. And a family of four living in a low-tax state (South Dakota) would need to gross almost $900,000 per year to have enough income left over to reach the poverty line. In fact, there is no mathematical configuration of taxes on the current rich alone — including additional levies on the "super-rich" making more than $1 million per year — that is compatible with putting the nation's entitlement programs and the new health-care plan on a sustainable course.

U.S. federal income taxes are already very progressive. The top 10 percent of income earners pay the majority of federal income taxes. The top 1 percent of income earners pay a quarter of all taxes.

But can't we expect the rich to pay even more? Maybe for a few years — but not without disastrous consequences to America's future.

A major tax increase causes the tax capacity of the rich to shrink gradually as two factors kick in. First, many of the households falling into Obama's "rich" definition are married couples in which both partners are working professionals. When tax rates rise, the lower-earning spouses in these couples tend to work less. Often, they quit work entirely. Second, many of the "rich" are budding entrepreneurs and small-business owners. They finance their operations using their own after-tax income, or with after-tax resources from family and friends. Small-business innovation is the fuel for long-term economic growth. In fact, many of the largest companies in the United States today were either small or nonexistent just 25 years ago. Killing small business kills the American economy.

We cannot allow federal health-care subsidies — mainly Medicare and Medicaid — to continue to grow faster than inflation indefinitely. The challenge is to find ways to make the nation's commitments to retirees and others sustainable without harming economic growth prospects. In this regard, the Obama administration is charting a course in the wrong direction — expanding entitlements on the backs of our nation's job creators. The math will work against the Obama administration and, eventually, against us all.

Jagadeesh Gokhale is a senior fellow at the Cato Institute and Kent Smetters is a professor at the Wharton School and a visiting scholar at the American Enterprise Institute.

More by Jagadeesh Gokhale

Accessed at http://www.cato.org/pub_display.php?pub_id=10422 on August 16, 2009

In my last post I showed how the government has usurped, in many ways, the role of the family in providing certain kinds of care that Nature intended the family to provide for one another. Today I will show how the government weakens the family by providing that care.

If a Nation is to become stronger, its families must become stronger. And, as with exercise where weight must be added for the muscle to grow, families must lift together the burdens placed on their shoulders.

State Welfare & the Metaphorical Arch

When the government steps in and takes upon it the responsibility of providing shelter, loans, certain kinds of education, medical care, food, utilities, and personal income to name a few, it usurps the role of family and removes the “weight” off the family’s shoulders. As with exercise, by lessoning this burden, the family is prevented from growing at best, or weakened at worst. It eliminates the struggle and the tension necessary for growth and the gaining of strength.

The hard and difficult experiences of life that force us to grow, necessarily create a type of tension within us and the family unit. However, that tension is not destructive and shouldn’t be removed at all costs. What should happen is that by the individual and family growing as a result of the tension, those burdens which once were hard to bear become bearable. By becoming stronger ourselves we are then able to bear one another’s burdens. By the family becoming stronger, we can bear the burdens of those not part of our own immediate family, but reach out to the broader family of neighbor, community and world. However, without first becoming strong ourselves we have no strength to offer to those in need.

With the tension gone because of the lack of sacrifice, it weakens the individual and family unit. When we become weaker as individuals, our families become proportionally weaker. When our families become weaker, the Nation likewise weakens. What we need is not an elimination of tension and opportunities to bear our burdens; what we need is to bear them together. This is illustrated by the following quote.

Victor Frankl, a Holocaust survivor, wrote in his moving memoir Man’s Search for Meaning:

“I consider it a dangerous misconception of mental hygiene to assume that what man needs in the first place is equilibrium or, as it is called in biology, “homeostasis,” i.e., a tensionless state. What man actually needs is not a tensionless state but rather the striving and struggling for some goal worthy of him… If architects want to strengthen a decrepit arch, they increase the load that is laid upon it, for thereby the parts are joined more firmly together.”

The family is the arch. The responsibilities of life are the load. When the government decreases the load upon individuals and families by supplying out of its seemingly boundless resources the necessities Nature intended the family to supply for each other, it succeeds most often in this one thing: keeping this metaphorical arch – the individual and the family – from rising to their potential. Furthermore, their help is, often times, actually not help at all and can be detrimental. For me to say otherwise would be to deny my years of personal experience and observations.

Human Potential

Is humanity not the crowing creation of Nature? Indeed we are. We are not here because we are lacking in capacity or natural endowments. We are in the position we are because we are strong and endowed with gifts that must be used for the benefit of ourselves and each other. The mind, imagination, moral perception, imagination, industry and science placed in the being of Mankind is awakened, instructed, strengthened and refined through the experiences nature provides us in supporting ourselves, supporting others, and, at times, allowing ourselves to be served by those around us.

A baby chick hatching from its egg struggles to make its way through. If aided, it will die as it didn’t gain the strength necessary to survive upon its arrival into the world. So too has Nature deemed that through struggle and sacrifice we should live as well as grow in strength and capacity. Through these experiences we can become refined as polished stones – both as individuals and families – and thus become more fit to help and serve one another. We learn that we are entitled to nothing but our own freedom but instead are indebted for everything we have and are. We learn that through love we become One.

Conclusion

I believe in a society where love and peace prevail and where we are all our brother’s keeper. To do this, we must be the keeper – not the government. The government weakens us and our families by taking away the opportunities for struggle, service and sacrifice. If we can no longer bear our burdens by having been weakened through inaction, how can we expect to bear one another’s burdens that theirs may be light? Is not that our divine responsibility? A welfare state weakens our ability to fulfill that.

The families of America are in trouble. There is no disputing this fact. Again, we turn to Confucius, “To put the world right in order, we must first put the nation in order; to put the nation in order, we must first put the family in order.” Just as architects who desire to strengthen a decrepit arch increase the load that is laid upon it, so should we allow families to work together to carry the burden life has entrusted them to carry, and thus they, like the arch, will be more firmly joined together.

No one likes to struggle. No decent person likes to see another person struggle. However, as much as we hate to see people struggle, the government should not be the hand that reaches out to help. It should be the hand of Mother, Father, brother, sister, son, daughter, Grandmother, Grandfather, aunt, uncle, cousin – it should be yours. Strengthen those hands – the hands of Family – and you will strengthen the Nation that we all might bear one another’s burdens that they may be light.

In this post and the next I will briefly illustrate how government welfare weakens the family unit in two ways: