ATLAS: Beware of ObamaCare

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By Scott Atlas

COMMENTARY:

Sen. Barack Obama has a plan for American health care. He has pledged to solve the problem of the uninsured and ever-increasing health-care costs in a way that, by comparison with what we had heard from his fellow Democrats Hillary Clinton and John Edwards, almost seems moderate and thoughtful.

Mr. Obama's silver tongue has indeed lulled many in the media, including both sides of the aisle (see the Wall Street Journal, "The wages of HillaryCare" Feb. 7), to report that ObamaCare calls for more competition and only moderate government control. But those comforting misconceptions are only fool's gold to those who more feared Mr. Edwards' total government take-over of health care and Hillary's edicts for health insurance on her terms, whether you want it as she construes it or not.

It is understandable that Mr. Obama's plan might seem reasonable when compared to those of his rejected Democratic competitors, who declared they would further empower government, micromanage health insurance, marginalize the independence of patients and doctors and then force it on a naive American public that mistakenly seems to believe that if government pays it is free and that government-run health care is higher quality.

Beware the superficial illusion of moderation - Mr. Obama's plan is filled with fantasies about costs, new government mandates and bureaucracies, and in the end, taxes and faith in big government that necessarily will be far greater and broader than his campaign admits, or perhaps worse yet, fails to understand.

First, let's be very clear: Mr. Obama's plan would instill new government mandates and expand costly government entitlement programs already stressed far beyond their sustainability. He creates a mandate that all families buy health insurance coverage for their children. He expands Medicaid and SCHIP eligibility, programs already overreaching by either covering families who can already afford insurance but choose not to, or by insuring adults (even childless ones) via a program designed strictly for children. He establishes a new government-run National Health Exchange, a Big Brother bureaucracy that will oversee the private insurance industry and "will act as a watchdog and help reform the private insurance market by creating rules and standards for participating insurance plans."

He calls for a new public insurance entitlement program for those without employer-provided care, once again repeating the mistake of positioning the government as the all-knowing insurer rather than as the provider of money to empower individuals and families so they themselves can purchase insurance they value.

Government mandates are in fact one of the root causes of high health insurance costs - the approximately 2,000 different state mandated benefits currently increase the cost of basic health coverage by little less than 20 percent to more than 50 percent, depending on the state.

Moreover, government-controlled health insurance has proven unable to rein in costs. Most other countries, including even the mother of all welfare states, Sweden, recognize this and are turning toward instilling competition and privatization to bring down costs.

Second, Mr. Obama's plans are funded by fantasies and new taxes. The financing of his plan depends heavily on purely hypothetical cost savings, most of which are already discredited by the Congressional Budget Office (see May 2008, "Evidence on the Costs and Benefits of Health Information Technology"), including his naive estimates from "investments in IT to reduce administrative costs, better disease management, reduced insurance overhead, reinsurance, and reduced uncompensated care" and claims that "businesses will save $140 billion annually in insurance premiums... and the typical family will save $2,500 per year."

He goes on to paint the illusion of pain-free government expansion and his new public insurance system by invoking key tenets of unabashed class warfare, anti-business liberalism with his new personal income taxes "on the rich" and new payroll taxes, both of which ultimately reduce workers' wages and inhibit much needed economic growth.

Americans have a clear choice between candidates on this issue. John McCain empowers the individual, not the government, by putting control of the health-care dollar in the hands of Americans, so they can make value-based purchases of health insurance they actually want, rather than insurance they are forced to buy.

Mr. McCain's health-care tax credit will introduce fairness into the tax treatment of health-care expenses, and specifically assist lower-income workers and their families, as well as small-business employees, i.e. those who do not benefit from the current tax treatment of health coverage, to purchase private health insurance coverage.

Mr. McCain will force transparency on the system with access to information on quality, price and healthy lifestyles for disease prevention. He will create insurance affordability for all, by generating a new, competitive national health insurance market.

The concept of bold change may be the central theme of Mr. Obama's campaign, and a significant proportion of Americans has been attracted to that vision. But in health care in particular, it is crucial to both recognize reality and to understand the consequences of misguided policy. Hiding under the veneer of positive change, Mr. Obama's health plan relies on a radical expansion of overburdened entitlements, and on creating new government programs that only seem moderate when compared to other extremist advocates of even more centralized power.

And just as other promises of entitlements to the American public, this one requires new taxes, far more intrusive government bureaucracy, a trust in government over the American people in the most personal decisions of all, and a naive belief in health-care fantasies rivaling even former President Jimmy Carter, who shockingly proclaimed in a 2002 address to the people of Cuba in support of Fidel Castro's dictatorship that Cuba has superb systems of health care and universal education" while admonishing America's government for withholding the "right" of universal health care from its people.

While Americans may reel from fear and uncertainty regarding the future of a sick economy, we can only hope they understand the stakes may be even higher when voting on the future of their own health.

Scott W. Atlas is senior fellow at Stanford University's Hoover Institution and professor at the Stanford School of Medicine.