cr may pages

8/7/2019 CR May Pages

http://slidepdf.com/reader/full/cr-may-pages 1/4

Centennial ReviewEditor, John Andrews

Principled Ideas from the Centennial Institute

Volume 3, Number 5 • May 2011

Publisher, William L. Armstrong

Sally C. Pipes is president of the Pacic Research Institute in San Francisco.She was previously with the Fraser Institute in Vancouver, BC. Her books includeMiracle Cure: How to Solve America’s Health Care Crisis , The Top Ten Myths

of American Health Care , and The Truth About Obamacare . She grew up inCanada and is now a U.S. citizen. This essay is based on her lecture at ColoradoChristian University on February 18, 2011.

Centennial Institute sponsors research, events, and publications to enhancepublic understanding of the most important issues facing our state and nation.By proclaiming Truth, we aim to foster faith, family, and freedom, teach citizen-

ship, and renew the spirit of 1776.

When Canadians’ demand for health care proved far greaterthan the government anticipated, policymakers had to se

a global budget in order to control costs. The result has

been long waiting lists for care, rationed care, and a lack

of access to the latest treatments and procedures. In 2010

according to Canada’s Fraser Institute, the average wai

from seeing a primary-care doctor to getting treatment by a

specialist was 18 weeks. Americans are not used to waiting

and don’t want to wait.

When it came to passage of the Affordable Care Ac

however, President Obama, Speaker Pelosi, and Senate

Majority Leader Harry Reid did not seem tocare what Americans wanted. In a Rasmussen

poll prior to the vote, 55 percent were not in

favor of the legislation.

The people’s dissatisfaction was increasingl

evident in the Tea Party movement and

town-hall meetings, climaxing in the 2010

election. The new Republican House quickly voted to

repeal Obamacare. But the Democratic Senate voted

against repeal—and a presidential veto awaited the bill in

any case.2

Shaky Pillars

Let’s look at President Obama’s main pillars in this far-

reaching legislation: universal coverage, reducing the cos

of health care, and the individual mandate. Fourteen

pillars are described in my book The Truth About Obamacar

(Regnery, 2010), but these three are central.

According to the administration, the Affordable Care Ac

will make it possible for 34 million of the 50.7 million

uninsured Americans to be insured by 2019. Ofcial

estimate that 18 million of them will be added to Medicaid

the program for low-income Americans.3 The rest wil

receive a subsidy from the federal government to help

OBAMACARE: WHAT NOW? WHY IT IS FAILING AND

HOW TO REPLACE IT

By Sally C. Pipes

March 23, 2011, marked the

rst anniversary of Obamacare

becoming law. “We have to pass the

bill so we can nd out what is in it,”

said Speaker Nancy Pelosi before

Congress voted on the 2,500-pagePatient Protection and

Affordable Care Act. It

passed, and we found out.

This essay will outline key components of the

legislation, explain why it will be disastrous for

our country, and offer solutions that will keep

America’s health care system the nest in the

world.

Americans want affordable, accessible, quality health

care for everyone. How do we achieve that? One vision

for reform focuses on empowering doctors and patients.

The other focuses on increasing the already large role

of government through mandates, subsidies, taxes, and

controls.1

Unfortunately, it is this latter vision that Barack Obama

favors. Prior to becoming president, he repeatedly

advocated a single-payer, government-run system—what

the late Senator Ted Kennedy called “Medicare for all.”

After taking ofce, Mr. Obama gave 58 speeches on his

goals for reforming health care so as to provide universal

coverage and reduce costs.Canada Isn’t the Answer

The United States spends 17.6 percent of GDP on health

care—one-sixth of our economy—and Obama contends

that number is much too high. He says our example should

be Canada and its single-payer system, which only spends

10.4 percent of GDP on health care. But most Americans

don’t realize that this percentage is what the Canadian

government determines it can afford to spend on health

care.

Americans

don’t want to

wait 18 weeks

for a specialist.

W e s t

C o n s e r v a

S u m m i t 2 0

M o r e S p e a k e r s A d d e d

R e s e r v e T o d a y - S e e P

a g e


http://slidepdf.com/reader/full/cr-may-pages 2/4Centennial Review, May 2011 ▪ 2

CENTENNIAL REVIEW is published monthly by the Centennial Institute atColorado Christian University. The authors’ views are not necessarily those ofCCU. Designer, Danielle Hull. Illustrator, Benjamin Hummel. Subscriptions freeupon request. Write to: Centennial Institute, 8787 W. Alameda Ave., Lakewood,CO 80226. Call 800.44.FAITH. Or visit us online at www.CentennialCCU.org.

Please join the Centennial Institute today. As a Centennialdonor, you can help us restore America’s moral core and preparetomorrow’s leaders. Your gift is tax-deductible. Please use theenvelope provided. Thank you for your support.

- John Andrews, Director

them buy insurance in the state-based exchanges that will

be set up in 2014.4 Yet the nonpartisan Congressional

Budget Ofce (CBO) has estimated that, by 2019, 23

million Americans will still be uninsured. So much for the

president’s goal of universal coverage.

On bending the cost curve down, Mr. Obama wanted to

be able to sign a bill that cost no more than $900 billion

over the rst 10 years. He didn’t achieve that either. First,

the CBO forecast puts the cost of Obamacare at $940

billion over the same period.

Second, that forecast itself is low, since major

features that will drive up the cost of health

care do not come into effect until 2014. These

include setting up the state-run insurance

exchanges, federal subsidies, expansion of Medicaid, elimination of discrimination based

on pre-existing conditions, and the hiring of government

employees to staff the boards and commissions.5

When you take all of these factors into account, it is likely

that the Affordable Care Act will cost in the range of $2.5

trillion in its true rst decade, 2014 to 2024. Obamacare is

the largest entitlement program to hit America since the

Great Society. So much for the president’s goal of reducing

costs overall. Nor does the legislation guarantee lower costs

for you personally. Contrary to the president’s oft-repeated

statement that premiums for the average family will declineby $2,500, the CBO stated after passage in March 2010

that they will increase by $2,100.

Then there was Obama’s mantra that “if you like your

health insurance and you like your doctor, nothing will

change.” The chief actuary of the Centers for Medicare

and Medicaid Services in his own administration, Richard

Foster, not only told Congress that the bill “won’t hold

costs down.” He also admitted that it “won’t let everybody

keep their insurance if they like it.”

Pushback by Judges and Lawmakers

The individual mandate, forcing people to purchas

insurance or pay a ne, is probably the most contentious

part of the legislation. Several lawsuits over the

constitutionality of the mandate and the entire law have

been led. In one case led by Virginia’s attorney general,

and in another led in Florida by 26 states along with the

National Federation of Independent Business, federa

judges have ruled against Obamacare. Three other judges

have upheld the legislation.

Under the U.S. Constitution, Congress has the authority

to levy taxes on the American people but not the power

to force individuals to purchase a good or service in the

private market. This is the key issue in these cases. It i

not clear how the Supreme Court will ultimately rule, but

if the mandate or the entire law is overturned, it will be

a victory for limited government—and for the American

people. There is no question that they do not want the

government to be in charge of their health care.

It is important that the Republicans in the House andSenate keep up the pressure for full repeal and replacement

of this legislation. If the GOP wins the presidency and

Congress in 2012, there is a good chance that Obamacare

could be overturned in 2013. There is a precedent: the

Medicare Catastrophic Coverage Act was repealed in 1989

In the meantime, while the

constitutional challenges move ahead

the House is pursuing strategies to

repeal parts of the legislation and to

defund it. The tax on medical devices

the Independent Payment Advisory

Board, and the long-term-care component (known as the

CLASS Act) are all candidates for repeal. The burdensome

1099 requirement for business transactions over $600 has

already been repealed. Denial of funding for Obamacare is

also important, since it would halt implementation of such

provisions as the major Medicaid expansion, the hiring of

new IRS agents, and federal subsidies to help lower-income

people buy insurance.

Agenda for Genuine Reform

If the Patient Protection and Affordable Care Act isrepealed by Congress or annulled in the courts, what then?

It can be replaced with practical and viable solutions tha

Universal coverage?

No. Lower costs?

No again.


http://slidepdf.com/reader/full/cr-may-pages 3/4Centennial Review, May 2011

STATE LEGISLATORS

IN A QUANDARY

By Mark Hillman

Even before 2010, tackling healthpolicy at the state level was not easy.Federal tax law narrows the options, asSally Pipes explains. And people haveexpectations that are economically unrealistic, because we’ve transformedhealth “insurance” into a forced savingsplan to nance routine procedures.

Economists dene an “insurable event” as something that occurs without warning, is unlikely to occur, andis undesirable. We understand this for all other types of insurance, but we expect health insurance to pay for themedical equivalent of tune-ups and oil changes.

Well-meaning legislators forbid insurers from denyingcoverage or raising rates based on pre-existing conditions —only to nd that doing so makes health insurance lessaffordable for younger and healthier customers.

Mandates that require insurance companies to coverpreventive examinations are touted as cost-savers. Butthey reduce costs only for the few in whom they detect aserious illness. For the vast majority, preventive screeningsnecessarily increase costs.

Under the misnamed Patient Protection and AffordableCare Act, state legislators can no longer debate health carepolicies on their merits. Instead, they must consider themultitude of uncertainties created by federal law.

Some implore state lawmakers to pass nothing thatacknowledges Obamacare, condent that the Supreme Court will nd its individual mandate unconstitutional. Thoughperhaps the safest course politically, this is tantamount tobetting all your chips on what Justice Anthony Kennedy had for breakfast.

It’s no small risk. The Heritage Foundation has warnedthat “the sooner a state declares ‘non-compliance’” withObamacare, the sooner the federal government will beginto impose its own regulations.

So others believe that states should act swiftly to preservetheir own authority rather than allow the federal government

to usurp that role. The challenge is to enact “defensive”policies—doing the minimum to achieve compliance— while thwarting federal intervention into state policy.

If insurance policy weren’t sufciently problematic beforeObamacare, today’s options are even worse. ■

Mark Hillman championed market solu-

tions for health care during his tenure in the

Colorado Senate, 1999-2005. He later served

as State Treasurer. He is now a wheat farmer

on the Eastern Plains, a news columnist, and a

Centennial Institute Fellow.

Voices of CCU

Centennial

Institute

Colorado Christian University

really would lead to universal coverage and lower costs. This

would put America on the road to providing affordable,

accessible, quality health care for all. The agenda for

genuine reform should include:

• Make each policy-holder’s health insurance his own,

just like long-term care, home, car, and life insurance.

Insurance should not be linked to one’s employment.

• To effect this, change the federal tax code so that employees

no longer get insurance fromtheir employers. Current law,

while it gives employees a

pre-tax benet, ties people to

their jobs. If they lose their

job, they lose coverage, since

insurance is not currently portable. If they then go into

the individual market, they will have to purchase coverage

with after-tax dollars. By xing this distortion, we can allow

the growth of the individual insurance market.

• Permit the purchase of health insurance across state lines,

further encouraging a competitive marketplace.

• Temporarily increase federal funding to state high-risk

pools (about $25 to $50 billion would be needed) so that

the eight million Americans who are chronically ill with no

health insurance for two years or more can get affordable

coverage until a properly functioning individual market

evolves.

• Encourage states to do medical malpractice reform by

capping non-economic damages and punitive damages.

According to Pricewaterhouse Coopers, the cost of

doctors practicing defensive medicine is about $210 billiona year. Medical malpractice reform as enacted in Texas has

signicantly reduced frivolous lawsuits and what doctors

have to pay for insurance.

• Encourage states to reduce costly mandates and

regulations on insurance companies, which add signicantly

to the cost of a plan. Currently, there are about 2,100 such

mandates across the nation.

• Expand tax breaks for Health Savings Accounts.

• Voucherize Medicare and Medicaid.

Who Do You Want in Control?

But suppose the Affordable Care Act is not repealed and

replaced? Many economists believe that the legislation

will eventually be amended to include a government-run

insurance plan—the so-called “public option.” After that,

exactly as occurred in Canada and Britain, demand for

health care will be higher than projected by the government,

the cost will increase beyond what government wants to

pay, and a global budget will have to be set—one that

government can afford.

If repeal fails,

single-payer is

our future.


http://slidepdf.com/reader/full/cr-may-pages 4/4

Centennial Review

May 2011

Centennial Institute

Colorado Christian University 8787 W. Alameda Ave.Lakewood, CO 80226

Return Service Requested

Obamacare: What Now? Why It is Failing andHow to Replace It

By Sally C. Pipes

One year in, the President’s

government-dominated vision for

health care is missing its targetsand losing support. Unless we

reverse course, Canadian-style

rationing awaits Americans.

Centennial Review, May 2011 ▪ 4

Private insurers will then be “crowded out” and everyone

will be enrolled in a Canadian-style single-payer system

with the inevitable long waits, rationed care, and lack of

access to the latest treatments. The governor of Vermont

is already calling for such a single-payer system—as is the

head of MassHealth in the Bay State, where there are huge

cost overruns from the implementation of Romneycare.

The question Americans must ask themselves is, Who

do you want to control your health care: a government

bureaucrat, an HMO bureaucrat, or you? Most of us would

agree with what Newfoundland Premier Danny Williams

bluntly told the Canadian media about ying south to pay

for his own heart surgery in Miami: “It’s my heart, it’s my

health, it’s my choice.”

Choice—universal choice—is the key to universal coverage

in America. President Obama’s government-dominated

vision for achieving universal coverage while bending thecost curve down is not possible. Taxes will be up, care will

be rationed, and the quality of care will decline.

If the United States gets a single-payer, “Medicare for all”

system like Canada’s, where will Canadians in life-and-death

circumstances go then? Where will we as Americans go

Unless the Patient Protection and Affordable Care Act is

repealed and replaced, we will all be on Hayek’s “road to

serfdom.” We need an off-ramp, and we need it soon. ■

Footnotes:

1. Many think that America has a free market in health care, but the reality

is that 50 percent of our health care system is in the hands of governmen

through Medicare, Medicaid, SCHIP, and the VA system.

2. Although the Obama Administration remains committed to

implementing its signature piece of legislation, public support for the law

continues to erode. A Rasmussen survey on the bill’s anniversary found

that almost 60 percent of Americans supported repeal. Indeed, according

to a recent KaiserHealthNews poll, 22 percent think the law has already

been repealed, and 26 percent are unsure.

3. A new report estimates that this expansion will cost the states $118

billion, signicantly higher than the CBO estimate.

4. It is worth noting that, of the 50.7 million uninsured, 14 million ar

already eligible today for Medicaid and SCHIP and have not signed up

This is because, if you enroll in these programs, it is very difcult to nd adoctor, since government reimbursement rates to doctors are too low and

as a result, doctors do not accept these patients.

5. There are 159 new boards and commissions to be set up and staffed

under the law—and about 16,000 new IRS agents to be hired to ensure

that lers show on their tax returns that they have insurance and, if not

that they pay the penalty.

You’re Invited • Register Today

Western Conservative

Summit 2011“Fulflling America’s Promise”

July 29-31 • Denver Marriott City CenterConrmed speakers are shown. More to come.

Individuals $200 • Host a Table $2,500

John BoltonDick Morris Dana Perino

Arthur Brooks

Kevin Jackson

Dennis Prager Gov. SusanaMartinez

Pat Caddell

For tickets and inormation go to WesternConservativeSummit.com

Centennial Institute’s second annual rally on the right will be

even bigger than 2010. If you love liberty, don’t miss it!

cr may pages

Documents