The Medical Freedom Channel

With all the claims from nationalized healthcare advocates, about the huge number of “uninsured Americans,” and how their socialistic panacea is going to cure all of this, it’s easy to overlook the fact that even the vast majority of those of us who DO have health insurance policies are often also playing Russian roulette about our wellness, anyway.

Fortunately, there’s at least one “progressive” writer who addresses this issue head on, rather than hiding behind the “statistics” about the alleged nearly 50 million Americans who “lack” health insurance. In a Boston Globe column this past week, Boston University professor Laurence J. Kotlikoff advances a rather interesting plan for healthcare reform.

Titled “We are all uninsured now”,” the piece presents a rather intriguing perspective on how poorly even the folks who HAVE health insurance are faring under the current system. And it is here that he makes his strongest case, just as Michael Moore did in SiCKO on the same issue (despite that film’s many problems and inaccuracies on other aspects of the question).

Kotlikoff (whose forthcoming book is entitled, The Healthcare Fix) begins with a roster of those who labor under these deplorable conditions, beginning with former Supreme Court Justice Sandra Day O’Connor, whose major challenges stem from a grandchild with a “pre-existing condition,” rendering health insurance virtually unreachable to his father (her son).

As Kotlikoff extrapolates from this observance and several others, “we’re ALL uninsured” in the practical sense, at least with the way the present system is set up: “We too face terrible, albeit more remote, healthcare risks,” he notes, “that our employer will drop our plan, that Medicare will go bust, that our plan won’t cover our needs, that premiums will eat us alive, that our doctor will stop taking our insurance, that long-term care will wipe us out, and that our uninsured friends and family members will need major financial help.”

However, he quickly asserts, “These risks are entirely avoidable. We can have an efficient, transparent system that includes everyone; treats everyone fairly; covers all the basics, including prescription drugs, home healthcare, and nursing home care; and costs little more than what we now spend.”

The surprise with Kotlikoff, however, is how he plans to get there. Just when it looks like just another prescription for single-payer, government-run healthcare, he turns a sharp corner, and proposes a rather different pathway – some government involvement, to be sure, but a far cry from the usual “reform” nanny-statist prescription.
He actually thumbs his nose at the other ideas being advanced: Bushite medical savings accounts as panacea; state governments seeking federal bailouts to fund their own “universal” schemes; and the roster of almost all the Presidential wanna-bes, advocating expansion of SCHIP and other programs (the result of which would be, as he puts it, to “create a balkanized healthcare system, with the old in Medicare, the poor in Medicaid, most workers in employer plans, and the losers (the otherwise uninsured) in highly subsidized, limited-coverage ‘loser’ plans.”).

Kotlikoff then offers a somewhat new perspective, which he calls the Medical Security System. He’d begin by eliminating, instead of augmenting, the present systems of Medicare, Medicaid, and employer-based healthcare (the latter, by dropping the tax breaks). Instead, “The government would give everyone a voucher each year for a basic health plan, [with].the size of the voucher based on one’s health status. Those in worse health would get bigger vouchers, leaving insurers no incentive to cherry-pick. Furthermore, insurers would not be permitted to refuse a voucher or otherwise deny coverage.”

Other than setting “the total voucher budget as a fixed share of gross domestic product” and defining “what a basic plan must cover,” the government would play no further role in the Kotlikoff plan. As he further explains:

“We would choose our own health plans. If we cost the insurer more than the voucher, he would lose money. If we cost him less, he would make money. Insurers would compete for our business and could tailor provisions, like co-pays and incentives to stop smoking, to limit excessive use of the healthcare system and encourage healthy behavior.

“Nothing would be nationalized. Virtually all of the cost would be covered by redirecting existing government healthcare expenditures as well as tax breaks. Doctors, hospitals, and insurers would continue to market their services on a competitive basis.

“This is not a French, British, or Canadian solution. It’s an American, market-based solution that Republicans should love. It’s also a progressive solution that Democrats should love. (Democratic presidential candidate Mike Gravel has endorsed it.) The poor, who are, on average, in worse health, will receive, on average, larger vouchers. The rich will lose their tax breaks.”

Okay, so what works and what doesn’t in this proposal?

Well, to begin with, his ideas are not all that far off from those being advanced by the noted libertarian theorist Charles Murray, in his latest book, In Our Hands: A Plan to Replace the Welfare State. Under Murray’s proposed plan, the U.S. government would divert all the funding now being poured down the public-assistance industry rathole, and instead (as noted in an excellent review of the book in the upcoming issue of
(http://thefreeman.org): “… provide every American citizen with an annual grant of $10,000 to do with as he or she pleases.” Such grants, the reviewer notes, “would be untaxed for those earning less than $25,000 per year, thereby establishing a floor or national income, and entirely taxed back for high-income earners.”

On the surface, compared to all the other scams being put forth, both Kotlikoff’s and Murray’s plans seem head and shoulders more practical, while being far less injurious to the general public or the federal budget (as much as that seems to matter). They both take an acknowledged social problem, admit openly that it’s not going to solve itself, and that in neither case is the current miasma of statist/corporate oligarchy doing the trick. They then propose what many have said for some time: if we just pay people some sort of livable stipend, they might even choose to spend it wisely, and even if they squander it, at least they get to make that choice!

As the Cato Institute’s Michael Tanner (the reviewer of the Murray book in the Freeman piece), notes, there is at least one major flaw in Murray’s proposal, from a libertarian perspective as well as a constitutional one: “His plan would establish as both a legal and philosophical concept that every American citizen is entitled to a minimum income – exacted from the taxpayers. Once that “right” is established, the political process will inevitably expand it.”

As Tanner further speculates, although Murray’s vision is that $10,000 would be a fair allotment, it might only be a matter of time before politicians bowed to lobbying and constituent pressure, and raised the level of the giveaway. All too soon there would be many more people getting the handouts than were paying into the kitty; the pols would either just print more money, run more deficits … or lean even harder than usual on the “rich folks” … to subsidize the largess.

This criticism could also be leveled at Kotlikoff’s Medical Security System. There’s admittedly the same basic problem in both premises. And for hardcore libertarians, the very thought of proposing such a baseline subsidy to each American seems to contradict the very concept of a free and voluntary society, toward which we all claim to be working and struggling..

However, the fact is, something drastic is going to be done with healthcare in this country, and fairly soon, no matter who gets elected to the throne. And since most of the pols in the race now are only differing on the extent and severity of the government intervention, we’re looking at some sort of nationalized healthcare either way.
Given that fact of life, compared to what the others are saying, such ideas as Kotlikoff’s (and Murray’s) are at least worthy of some consideration. Whether the medium is tax credits (coupled with a variation on the current “earned income credit” for low-income parents, already in the system), or some other method of transfer payments, this could be a pathway that gets us out of the present morass known as “health insurance.”

It might thus be worthy of further discussion; who knows what kernel of truth lies within the rhetoric this time?