With a torrent of red ink spilling from the federal government, no wonder Coloradans by the thousands turned out at the state Capitol last week bedecked in tea bags and toting protest signs. The prospect of crushing public debt and higher taxes tends to prod even quiet citizens out of their seats.
As it happens, though, the “tea party” focused on only a small part of the upcoming fiscal debacle. Protesters decried the bailouts and spending sprees that will add $10 trillion or more to federal debt over the next decade. But bad as that is, taxpayers need to brace themselves for worse. The unfunded liability of Medicare alone is several times as large — with no slowing of its growth in sight.
Naturally, Congress and the Obama administration are convinced that the answer to this crisis is not to reform the government’s role in health-care finance but to restrict the reach of the private sector. As The New York Times explains, the chairmen of five key congressional committees have reached consensus on the “main ingredients” of health-care legislation to be debated this year. “The chairmen, all Democrats, agree that everyone must carry insurance and that employers should be required to help pay for it,” The Times says. “They also agree that the government should offer a public health insurance plan as an alternative to private insurance.”
Barack Obama touted a public insurance option during his presidential campaign, so it’s no surprise that congressional Democrats are preparing to push one now. But make no mistake: The public plan is a stealth weapon for those seeking to relegate private coverage to a small corner of the market.
To be sure, the current health- care system is expensive, wasteful, bureaucratic and opaque. Millions go without coverage while the rest of us are kept ignorant of actual prices even as our premiums soar. Reform is inescapable.
But what type of reform?
As Regina Herzlinger writes in her book, “Who Killed Health Care?,” “There are two broad sets of belief here: One group believes in the transformative powers of big, organized institutions, such as government and large insurance firms. The other camp believes that . . . only consumers and the entrepreneurial institutions that serve them can transform health care.”
During their years in power, Republicans lacked both the courage and vision to push major reforms that would put consumers and innovative providers in charge. Democrats, who believe in the transformative power of big institutions so long as they’re not corporations, boast both the courage and the vision to act now.
A new public insurance option has nothing to do with a mandate for universal coverage. It is needed, proponents say, to drive down the price of private insurance. That sounds reasonable, except that government historically has set its reimbursement rates for Medicare and Medicaid artificially below the private market (to the everlasting frustration of doctors and hospitals), and no doubt would do so with any new plan, too. On a purely cost basis, consumers would gravitate out of private insurance into the public alternative.
If that happens, the unfunded liability for government could swell at an even faster rate. Meanwhile, in a desperate attempt to hold down outlays, regulators would likely resort to the mainstays of government cost-containment elsewhere in the world: denying or restricting expensive treatments and equipment, and rationing care.
With private insurers out of the way, who will be the scapegoat then for health care’s travails?
E-mail Vincent Carroll at vcarroll@denverpost.com
