Don't Hurt People and Don't Take Their Stuff: A Libertarian Manifesto (10 page)

BOOK: Don't Hurt People and Don't Take Their Stuff: A Libertarian Manifesto
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In the early part of the twentieth century, there was no third-party payment system for health care. Individuals who got sick would pay their doctors directly, and this personal accountability kept costs low; doctors could not make money if none of their patients could afford to see them.

All of this began to change in the run-up to World War II. In a politically motivated, economically illiterate effort to boost employment and reduce income inequality, President Franklin Delano Roosevelt imposed wage controls on businesses, dictating the amounts they were allowed to pay their workers.
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Good economics always takes a backseat in the ordering of political priorities. As John Maynard Keynes once said: “In the long run, we’re all dead.” He was speaking to the political class, who would eventually hear instead: “In the long run, when the political reckoning for the consequences of shortsighted policies come, I’ll be out of office, maybe lobbying Congress for more complexity that favors my clients.”

So it was with FDR and wage and price controls, and his penchant for throwing bad economic ideas against the wall to see how long they would stick.

Business owners naturally wanted to employ the best talent they could find, but these wage controls hampered their ability to attract the best workers by offering higher salaries than their competitors. In order to get around the law, and to appease one of his most important political constituencies, the labor unions, FDR authorized nonwage perks, one of which was the first incarnation of employer-sponsored health insurance.

Why link health insurance to your employment? It doesn’t make much sense, and it gives someone else more control over your health-care decisions. This government-driven market distortion was the first of many corruptions that put distance between the patient and the doctor. With deep-pocketed businesses picking up the bill for their employees, doctors had much less incentive to keep costs down, forcing insurance premiums to rise and making health care largely unaffordable for anyone outside the system. The tax code further complicates the problem with its unequal and confusing treatment of health-care costs. Inside the politically structured system, health insurance benefits were tax-free.

But outside the system, you pay inflated costs with after-tax dollars. This is what amounts to political “compassion.” It sounds so good when read compellingly from the dais teleprompter, but in practice the little guy gets screwed.

Instead of addressing these issues directly, ObamaCare doubles down on an already corrupted system. Imposing a fiendishly complex new system, against the will of the people, is no way to resolve the fundamental problems with the market for health services. If doctors and insurance companies raised prices when businesses were paying, they will only raise them more when government, with no profit motive or competition to restrain its spending, is picking up the tab. Congress and the administration will, in turn, impose price controls on hospitals and doctors. Because it worked so well when FDR tried it.

Rising costs and rising demand for “free” services can only lead to one outcome. It’s called rationing of health-care services. Or “death panels.” Or some gray-suited soviet, who just learned that you once sent $250 to Ron Paul’s 2012 presidential campaign, choosing winners and losers in a very complicated system that no one really understands.

One of the key features of the law is to require insurance companies to accept patients with pre-existing conditions, a requirement that undermines the entire concept of insurance. Insurance exists as a safeguard against a possible future disaster, something that is unforeseeable but potentially devastating. You cannot insure against something that has already happened. You cannot buy homeowner’s insurance on a house that is already on fire. If you could, it would no longer be insurance but a mere shifting of costs from one person to another.

Since insurance companies can now be certain that every one of their clients will be filing a claim, their rates will have to rise to compensate for the increased costs. Hence, the “individual mandate” targeting, by force, young, healthy people who cannot afford and don’t need the government-defined plans. Much more on the “social injustice” of this later.

The fact that ObamaCare will fail in its aims of reducing costs and increasing coverage seems to have become common knowledge, with huge numbers of businesses lobbying to get out of the employer mandate. And the federal government has been happy to comply.

The Department of Health and Human Services has announced that about 1,200 businesses have been granted exemptions from the ObamaCare employer mandate.
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Labor unions are not happy with the law, either, and have sought waivers en masse for their membership. Thus far, labor unions representing 543,812 workers and private companies employing 69,813 workers have been granted waivers.
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If ObamaCare is supposed to be such a good deal for workers, why do so many of them want out of it?

Private companies are scrambling to deal with the increased costs of the law as well. UPS has announced that it will no longer provide health coverage for employee spouses, while Walgreens and IBM are dumping employees from their employer-sponsored plans, asking them to buy private health insurance instead.
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As of this writing, five million Americans have received cancellation notices from their insurance companies,
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and some estimates put future cancellations as high as a hundred million.
22
So much for Obama’s original promise that “if you like your health insurance, you can keep it.”

Of course, the political class, fresh off a closed-door lobbying campaign to protect their generous health insurance plans did get to “keep it.” President Obama responded to their demands, personally asking that the Office of Personnel Management allow members of Congress to retain the massive subsidies conferred by the Federal Employees Health Benefits Program, despite the fact that ObamaCare would otherwise require them to purchase the same health insurance programs available to the population at large.
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The OPM, controlled by the president, quickly solved the problem for the insiders. According to the sympathetic
Washington Post:

[L]awmakers and their staffs previously had about 70 percent of their insurance premiums underwritten by the federal government through the Federal Employees Health Benefits Program. . . . Under pressure from Congress, the Office of Personnel [created a new ruling] saying the federal government could still contribute to health-care premiums.

The final rule would keep the subsidy in place only for members of Congress and affected staff who enroll in a Small Business Health Options Program (SHOP) plan available in the District of Columbia. Such plans most commonly will be aimed at employees of businesses with fewer than 50 workers, but perhaps the theory is that each lawmaker and his or her staff constitute a small business.
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When Senator David Vitter (R-LA) introduced an amendment to eliminate this
de facto
exemption for congressional employees, Democrats descended on him in a rage, calling the effort “mean-spirited,” while Republican staffers quietly lobbied against the efforts behind the scenes to preserve their special treatment.
25
Insiders on both sides of the aisle are equally invested in this two-tiered system, the inequities of which will surely come back to haunt them as “consumers” in the ObamaCare exchanges look for relief from the new system’s sticker shock.

Due to disorganization and a general reluctance for anyone to comply with an obviously bad law, many of ObamaCare’s deadlines have been delayed. Nearly two-thirds of U.S. states have outright refused to set up the health-care exchanges required by the law, forcing the federal government’s hand and resulting in multiple pushbacks of the initial deadline. The employer mandate has also been delayed until 2015, due to panicking businesses realizing that they were unprepared to bear the full financial toll of the requirement. Cuts to Medicare and numerous eligibility requirements for health insurance subsidies have also been put on hold.
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Overall, the rollout of the president’s signature legislation has been nothing short of a chaotic mess.

So what we have is a large, cumbersome, unworkable, ineffective health-care program that nobody wants, but which is nevertheless the law of the land. What agency could be trusted to enforce such a disastrous policy? You guessed it: the IRS.

Of all the federal agencies that could possibly be tapped to implement ObamaCare, it would be hard to come up with a worse choice than the IRS. We have already established the political corruption to which the agency is susceptible, but there are a number of other reasons that entrusting them with our health care is a uniquely bad idea.

First, ObamaCare adds a total of forty-seven new duties and enforcement powers to the agency, which has admitted to lacking the necessary resources to fulfill even its existing duties. In a hearing defending the IRS’s discriminatory practices, then IRS commissioner Stephen Miller testified that “it would be good to have a little budget that would allow us to get more than the number of people we have.”
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How can we expect fair and equal treatment from an agency that blames its ethical violations on lack of funding?

The gray-suited soviets at the IRS have proven time and again that they have no respect for the privacy of individuals or their records. Apart from the prying questions asked of tea party groups in the discrimination scandal, the IRS has allegedly violated the law by seizing 60 million medical records from a California health-care provider.
28
Allowing the agency to manage health-care subsidies and impose penalties will open the door to further abuse and remove the control of sensitive personal information from individual patient-doctor relationships.

Finally, the IRS has no expertise in the field of health care. They are being asked to regulate an industry they know nothing about, and given the quality of IRS employees we have seen in the public spotlight lately, it seems overly optimistic to expect them to be a quick study, or unbiased enforcer. Indeed, the sample of officials paraded before congressional committees in recent months exposes a workforce that is seemingly immune to public oversight or controls. In a misconduct hearing, Miller responded to an alarming number of questions by claiming that he didn’t know, couldn’t remember, or wasn’t sure of the answers. He expressed no knowledge of his own employees and claimed to lack any opinion on whether the actions of his agency were appropriate.
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If the IRS is truly as disorganized and unknowing as its leaders claim, why on earth should the agency be allowed to handle your health care? The other option, of course, is that they are obfuscating, parrying with political opponents to run out the clock, knowing that career civil servants will be around longer than any single politician or even a president.

This alternative scenario hardly seems reassuring. It raises a fundamental question about the legitimacy of the way business is conducted in the federal labyrinth. Do they work for us? Are they accountable to We the People? Or us to them?

In 2009, then–House Speaker Nancy Pelosi infamously said, “
We have to pass the bill so that you can find out what is in it
, away from the fog of the controversy” (emphasis added).

Well, now we have passed it, and the law is far more unpopular than the proposed legislation ever was. When the Healthcare.gov website debuted to disastrous malfunction on October 1, 2013, it became evident that this unpopularity was not simply a result of the “fog of controversy,” but an intuitive understanding of government ineptness.

Even after the botched launch, however, Nancy Pelosi was still cheerleading the law, oblivious to the reality that was quickly gripping the rest of the country. Speaking several weeks after the website launch, Pelosi insisted that she wanted to “say every chance I get how proud we are of [ObamaCare.]” She then went on to make the tenuous claim that the law “is life, a healthier life, liberty to pursue your happiness, as our founders promised.”
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It is telling that the president who consistently thinks of himself as the smartest guy in the room appeared downright baffled by his administration’s inability to successfully remake the nation’s entire health-care system with an unbending belief in smarter government. Redesigning one-sixth of the American economy, he now concedes, is more complicated than he imagined:

But even if we get the hardware and software working exactly the way it’s supposed to with relatively minor glitches, what we’re also discovering is that insurance is complicated to buy. And another mistake that we made, I think, was underestimating the difficulties of people purchasing insurance online and shopping for a lot of options with a lot of costs and lot of different benefits and plans and somehow expecting that that would be very smooth, and then they’ve also got to try to apply for tax credits on the website.
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An embarrassingly botched website is just the beginning. Friedrich Hayek refers to the grandiose pretentions of government redesigners as a “fatal conceit,” because of the unforeseen, and often dire, consequences of big government designs on private life. Real people are getting hurt by the pretensions of ObamaCare, and the only real winners seem to be the insiders who will administer the new complex structure.

ObamaCare seeks to supplant a broken system with more of the meddling and discretionary reengineering that broke it in the first place. Increased complexity and difficulty of compliance is precisely the opposite of what is needed to fix health care in America. The only certainty is that more bureaucrats will be hired, and that they will be given extraordinary discretionary power over the health care of your family.

A
N
E
MPIRE
OF
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ATABASES

BOOK: Don't Hurt People and Don't Take Their Stuff: A Libertarian Manifesto
13.17Mb size Format: txt, pdf, ePub
ads

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