The Obama Administration has understood the fact that many Americans do not want a public insurance option. Although it is currently unclear as to whether or not the Administration will abandon the public option, the co-op solution that is gaining some support will extend the same problems that the current health care system has to more people. The only difference between co-ops and the public option is that the term “co-op” doesn’t have as negative of a connotation as “government run.” Once again, politics is put ahead of real solutions that will work.

The lawmakers’ rationale behind the co-op system is that the creation of private, not-for-profit insurance companies will serve as competition to for-profit private insurance companies in an effort to bring down the cost of insurance. This conclusion is illogical because profits are not the reason for the high cost of health insurance, and the following provides a better analysis:

The Misuse of Insurance

Over the years, health insurance has evolved into the key for getting access to health services as opposed to being a safeguard against catastrophe. Thousands of federal and state mandates exist that define coverage – from prescription drugs to hair transplants. When insurance companies are required to cover certain procedures and medications, the cost will rise. In addition, insurance coverage boosts the demand for services, but supply cannot grow at the same rate which also leads to higher costs.

The current system has the government defining the medical services that should be covered and mandates how insurance companies are able to charge for premiums. The community rating system establishes limits in charging different prices to different consumers which results in healthier people paying for those in poor health who require more care.

The co-op system focuses on getting people insured, when the focus should be on limiting the role health insurance plays in getting access to health care. Instead, co-ops will continue to boost the demand without addressing supply.

Three Percent Profit Margin vs. Not-for Profit

It has been established that the inception of co-ops will continue to stimulate demand for health services without addressing supply. Next, let’s examine the insurance companies’ profit margin. For-profit insurance companies average a 3.3 percent profit margin, and there are 85 industries that do better. (1) Ironically, the beverage/brewer industry is number one with a whopping 25.9 percent profit margin, yet there are no politicians complaining that we have a beverage crisis! Has there ever been a time where news reporters have interviewed families who cannot provide their children with a soda pop treat, or college kids complaining that the cost of a keg for their Friday night bash is killing their future?

Therefore, how can politicians blame profits when it is illogical to conclude that a 3.3 percent profit margin is driving up the cost of care? If co-ops serve their purpose, then they can reduce the cost of premiums by 3.3 percent. In addition, this cost reduction may not even be possible due to the supply/demand concern.

Public vs. Not-for Profit in “Capital” Terms

This is a concern that is currently being glossed over by the lawmakers. If co-ops are to be established, then how will they be funded; and how much of a role will government funding play? Not-for-profit companies do not have the advantages that publicly traded companies have when it comes to raising capital. For example, not-for-profit companies cannot issue common stock or sell bonds in the open market to raise capital.

The issue of raising capital is a critical issue to address since start-up costs will be involved in the establishment of co-ops. There are federal and state laws that require insurers to hold reserves of up to one-third of premiums. If co-ops are to be established in every state, it is possible that the federal government will have to contribute billions of dollars just in start-up costs without even addressing future capital requirements. The result would be as economically catastrophic as a public option and still does not address the high costs of insurance.

The Fallacy of Profits at the Expense of Care

One talking point that liberal politicians cling to is the argument that profit or the incentive to make a profit comes at the expense of quality care. This argument may have some merit if the majority of the health care industry was for profit, and the for-profit sector had very high profit margins. However, the opposite is true. According to the American Hospital Association’s 2007 annual survey, about 15.2 percent of registered hospitals in the United States are for-profit. (2) In addition, for-profit hospitals are not faring much better than the insurance companies as their average profit margin is 3.6 percent. (1)

Another aspect of this argument to consider is that the need to control costs does not disappear with the incentive to make a profit, as funds and resources are limited. However, there might be a correlation between limited resources and removing the incentive to profit. Returning to the beverage industry example, it seems that the supply of beverages is ample and the product is affordable, yet this industry is the most profitable. Although the beverage industry and the health care industry are completely different, the point to be made is that the incentive to profit boots SUPPLY. The problem with rising health care costs leads back to the simple economic concept of supply and demand.

In conclusion, if the government lets the free market work, as opposed to attempting to stifle incentive, we will solve the problem of high costs.

(1) http://seekingalpha.com/article/155858-health-insurance-industry-s-profit-margins-rank-86?source=yahoo

(2) http://www.aha.org/aha/resource-center/Statistics-and-Studies/fast-facts.html

John Travolta's character in Phenomenon almost got one of these.

BY: MIKE PORTER

The Car Allowance Rebate System (CARS) is the official title of the program. It has also been called “Cash for Clunkers,” which was the name originally chosen by some dealers to market the incentive-based program to consumers. Essentially, this is another big rescue program by our government intended to save struggling automakers, people who cannot afford a new car and the environment. From the onset, one may think our government has a winning program on their hands. After all, who could deny a program that generously helps people and the Earth? In reality, this program has helped very little and, in some ways, could make things worse.

The plan is loosely based on a program initially implemented in Germany, only this version has a few more restrictions. It issues a credit based on the car you are trading in against the new car you are purchasing. In order to qualify for the program, you have to own a car today that gets combined miles of 18 mpg or less according to www.fueleconomy.gov. Depending on how inefficient your old car is compared to the efficiency of the new car you purchase, the more of a rebate you will receive. The rebates available are $3,500 or $4,500 for your car as long as it is not more than 25 years old.(1) Apparently very old clunkers do not qualify for this program. There is a specific list of vehicles that are approved for you to purchase under this plan that cost $45,000 or less. All cars have to be purchased between July and November of this year to qualify. (1) This program is in addition to any dealer incentives your dealer may be offering such as cash back, low-interest financing, etc. The old car is sent to the salvage yard with the engine destroyed by the dealership. (1) Basically this is a check written from the stimulus package that goes straight to the dealership upon purchase of a new vehicle and the savings is passed onto the consumer at the time of the purchase. The initial amount funded for the program was one billion dollars, and it is now estimated that an additional two billion will be required to fund the remaining portion.

First, the misnomer is that the CARS program would actually save struggling dealers. There is a website set up to give dealers the information they need to comply. Many dealers have complained the site is unstable and crashes often. A poorly written disclaimer meant to discourage hacking into the site has actually frightened many into thinking the government can take over their computer if they browse to that website! This prompted Glenn Beck to do a segment on his program dealing with the issue on his television program. The initial disclaimer has since been changed. Also cars that may be clunkers by our standards are not necessarily clunkers in the eyes of the government. (5) Many people will not qualify for this program whether they believe they have a clunker or not. The numbers from the White House paint a rosy picture showing results of thousands of cars that have been sold and inefficient cars that are no longer on the road. What the White House is not telling you is that summer is normally a busy time for car sales.

Critics of the program predict many of these people would have bought cars eventually and as a result waited to buy a car once the “buzz” leaked about this program. Our government very well could have caused dealerships to have slower months leading up to when this program was started. How many people were let go in the auto industry between the time this program was announced and when it was finally available? Many also predict once this program ends car manufacturers will experience more down months which will result in more lost jobs. How does that help anyone in the car business? Forcing dealers to have months of sales squeezed in a limited amount of time can be problematic for the car industry who have cut back and are running with less people. Who is going to change their spending habits in this economy if they know this demand bubble is temporary and will not continue? Many of the cars purchased in this program are going to foreign car manufacturers. Is that really what our government intended to happen after dumping billions into GM and Chrysler? Also, why does our government choose the auto industry? Millions of people have lost their jobs in a variety of industries, but you do not see a program like this for washing machine manufacturers do you? Worse yet, what are the automakers going to owe the government in the end? I fear this could lead to more regulation and more control by our government in the auto industry moving forward.

Next, the idea that CARS is helping people who cannot afford to buy a new car is also a myth. Our government cannot explain how someone who cannot afford a new car could afford to have a new monthly car payment in an environment where we could be coming up on 10 percent unemployment. Increased demand also leads to dealers selling cars at higher prices with fewer incentives than they would otherwise. This could also lead to fewer options for the consumer as dealers run low on some models. Does any of this sound familiar? It sounds a little like the housing bubble we are experiencing today, doesn’t it? Would it surprise anyone if we saw an increase in people defaulting on car loans in the next few years? If that does happen, then you can bet our government would be discussing a big ticket rescue package to save these people who are defaulting largely due to past programs administered by our government. In the long run, I feel this may hurt people more than it may help by forcing some into a more expensive car just to qualify for the program. Also, since dealers are required to destroy the engine, this will result in fewer functioning engine parts for some older cars. Fewer engine parts available will mean higher prices to get these cars repaired which will hurt many who cannot afford to buy a new car even with CARS incentives.

Finally, the claim that CARS is saving the planet is also debatable. Many of the new vehicles purchased through this program average about 25 mpg. (2) At a taxpayer cost of 3 billion dollars, many people could have bought a used car they could actually afford and got similar if not better fuel economy. Is the White House taking into consideration the energy that is spent to properly dispose of these cars according to government rules? The Associated Press has estimated carbon dioxide will be reduced just shy of 700,000 tons a year as a result of this plan. (4) While this sounds like a lot, last year the US emissions totaled nearly 6.4 billion tons, which was down from years prior. (4) One doesn’t have to be a math genius to conclude this hardly represents progress.

In the end, we can conclude this is just another government program that provides very little results and could lead to other problems in the future. In addition, this is costing tax payers more than anyone had expected. The government really needs to stop picking and choosing industries they want to help and allow the free will of the market to decide how they should or should not spend their money. Since the average car being purchased is getting just over 25 mpg, one can easily see there is still a market for bigger cars that use more gas than the economical tin cans our government says everyone wants. We can add “Cash for Clunkers” to the list of many other government programs that cost tax payers a fortune and have not produced the results we had hoped.

(1) http://www.cashforclunkersfacts.com/bill-faq
(2) http://www.foxnews.com/politics/2009/08/04/clunkers-programs-environmental-impact-debate/
(3) http://www.foxnews.com/politics/elections/2009/08/05/experts-carbon-savings-cash-clunkers-small/
(4) http://www.foxnews.com/politics/2009/08/05/car-rebates-populist-stimulus-clunker/?loomia_ow=t0:s0:a16:g2:r2:c0.048353:b26960246:z0
(5) http://www.cbsnews.com/stories/2009/07/11/eveningnews/main5152636.shtml

Linda Douglass, the communications director for the White House Health Reform Office, must have long and tiring days searching for all of those “scary chain emails and videos” that she claims surface when health care reform is on the table in Washington. She also makes the assumption that the people responsible for making these videos and emails have quite a bit of time on their hands. She must not be familiar with the convenience of modern technology, as a simple search can produce results in a matter of minutes. At least the taxpayers are not paying for these scary videos. Instead, they are paying a White House official to spend time searching the internet for scary emails and videos. A wise use of scarce tax dollars, isn’t it?

Douglass Video Response

View the “scary video” here if you dare!

In the beginning of her response, she quipped that the video did not show the President reassuring the American people that they would be able to retain their employer coverage if they wish to keep it. However, if she took the time to watch the scary video (she could have kept the lights on if necessary), she would have seen that the video opens with a clip from President Obama’s recent speech to the American Medical Association that shows him addressing an “illegitimate concern.” The illegitimate concern he addressed was his opponents’ criticism that his plan will lead to a single payer system. The “scary” video then moves on to play clips from speeches that Obama gave at the SEIU Health Care Forum in 2007 and to the AFL-CIO Civil, Human and Women’s Right Conference in 2003 in which he CLEARLY stated that his position that he is in favor of a single-payer system. How is it scary to use Obama’s own words? The only thing scary is that it reveals the hidden truth that is becoming increasingly difficult to suppress.

Perhaps viewers could dismiss his claims as pandering to his base. All politicians make promises to their base that they know they cannot keep. However, the next person to show up in this video is Barney Frank, and he confirms the suspicion that opponents to President Obama’s health care plan have. Frank asserts that if a good public option is passed, it could lead to a single-payer system. He also goes on to say that this approach is the best way to reach the ultimate goal of a single payer system. This clip was taken from a left-wing organization called “singlepayeraction.org.” (View here) Do they make “scary” videos as well? At least Ms. Douglass is even handed!

Frustration continues to grow due to the fact that the Obama Administration continues to insult people’s intelligence. It is no secret that the Obama Administration and Congressional leaders that represent the far-left wing of the Democratic Party want a single-payer system, and they know they don’t have the votes for it. The only approach is to lure people into the public option so the private option will either be eliminated completely or only be available to the very wealthy over time.

Perhaps Ms. Douglass could take a more constructive approach to her job and refute the following claims:

1) How does a private company compete with a public plan when a) the government heavily regulates insurance coverage and b) the public option has access to blank U.S. Treasury checks?

2) Why will employers provide private insurance coverage when a public option is available? The current proposal in the Senate does impose fines on employers with 25 or more employees for failure to provide insurance coverage; however, there is no specific mandate that employers must provide PRIVATE insurance. Therefore, businesses will provide assistance for the public option. The public option will be offered at a lower cost initially to drive out the private option.

Ms. Douglass could also make better use of her time by giving specifics rather than encouraging people to report these “scary” videos. Giving specifics on policy proposals is not something this Administration does well, nor does it respond well to criticism. Recently, I wrote a three-part piece that constructively criticized “Obamacare” and explained how a free-market solution would work. Hopefully, my columns didn’t qualify as “scary,” although it would be an honor to be on Ms. Douglass’ watch list as one of those “scary” people. This can only mean that my work challenges people to think!

August is going to be a difficult month for Congressional leaders who will face their angry constituents. The following list of “scary” videos is a preview of coming attractions. Beware! You may run into these scary people at your local grocery store:

Arlen Specter and Kathleen Sebilius – Pennsylvania Town Hall (Specter actually states single-payer should be on the table.)

Tim Bishop – Setauket, NY

Lloyd Doggett – South Austin Texas

Protesters are also showing up at the President’s Town Hall Meetings, possibly because they are not being let in to politely discuss the issues! The motorcade had to drive through a protest four blocks long.

I’ve written extensively about bad economic policy for over a decade, not because I have too much time on my hands, rather it is an issue too important for me not to donate some of my limited free time. For the people who voted for “hope” and “change” last November and those who were blind to the Republican Party’s faults, it is never too late to see the light. I encourage people to speak their mind because, eventually, someone will listen. After all, “facts are stubborn things.”

Adam Smith once wisely said “Great ambition, the desire of real superiority, of leading and directing, seems to be altogether peculiar to man, and speech is the great instrument of ambition.” If only President Obama would embrace more of Smith’s beliefs…

The first two pieces (Part I, Part II) of this series exposed some major caveats in the healthcare bill that Obama is urging Congress to pass and addressed some of the common myths of a free market enterprise system. Now that the criticisms have been established, it is time to focus on the solution.

The Invisible Hand vs. The “Visible” Hand

As President Obama continues to campaign around the nation in an effort to win support for the current healthcare proposal, he is selling the “visible” hand approach. The visible hand has been present in the healthcare sector for decades. The result has been out-of-control costs and a monopoly by the insurance companies.

In 1964, President Lyndon Johnson promised the American people that Medicare would not cost more than $1 per month. For $1 per month, Americans would have a secure financial future knowing that all of their medical costs would be paid when they reach an age when they will require more medical care. It is safe to say that Medicare costs today are far off the inflationary curve, and Medicare no longer covers all costs.

Proponents of government healthcare say that rationing is a scare tactic used by the opposition. The truth is rationing is not a scare tactic, as it has taken place with Medicare. In an effort to control costs, Medicare no longer covers medical care in full. Senior citizens must purchase supplemental insurance in order to have little or no out-of-pocket costs.

Part II of this series touched on government regulation of the insurance companies and the community rating system. Obama’s plan is more of the same. People will not have the freedom to choose what is in their plan. Government regulations require anything from in-vitro fertilization to hair transplants to be covered. Those who may never require those services are forced to pay for those that do, which is why insurance premiums are so expensive. If people have the freedom to pick and choose what they wish to have insurance cover, the premiums will be more affordable.

The community rating system states that people must pay the same rates for their level of coverage regardless of their age or medical condition. It’s a wonder why so many young people opt out of purchasing health insurance when they have to pay the same rates as those who require more medical services. Under the current proposed plan, insurers would not be allowed to charge more than twice as much for one patient than any other patient with the same coverage.

Perhaps it is time for the invisible hand. Real healthcare reform should allow the consumer to freely choose what to buy, how much to buy and allow the producer to freely sell it. This means allowing people to purchase insurance policies across state lines, and removing all government mandates that dictate what should be covered.

Cost Control vs. Number Insured

Which is more important? The magic number is 47 million. Try and type the number “47 million” in a general internet search and leads for “47 million uninsured Americans” will appear. The focus in the current proposal is on the latter when it should be on the former. What good does insuring everyone do if the costs are not addressed? Furthermore, if the costs are not addressed, everyone’s quality of care will be severely diminished.

Countries that have universal care face rationing of care and lack of access to modern medical technology because rising costs do not allow for such investment. Healthcare reform should not be about getting people insured, but rather bringing down the costs in order to allow more people to have access to QUALITY care at an affordable price. Nations that reject centralized government control and incorporate market mechanisms have the best chance of accomplishing this feat. Nowhere in the world has any nation’s government been able to successfully control costs without it coming at the expense of quality care. France’s healthcare system, a country that Michael Moore suggests the United States follow, is the single largest factor driving their overall budget deficit.

Empowering the Government vs. Empowering the People

Which has the power to do more harm? The United States is a country that embraces freedom, so why does the Obama Administration want to empower the government to make the American people’s most PERSONAL decisions? Benjamin Franklin once said: “They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.” If the government bureaucrats are empowered to make people’s health decisions, the United States will suffer one of the greatest losses of liberty.

The Bush Administration didn’t get much right when it came to fiscal and economic policy, but one bright spot was the creation of the Health Savings Account (HSA). HSA accounts create a market that is strictly CONSUMER driven. People are empowered to make their own decisions and use tax-free dollars to pay for medical care. HSAs are not about insurance. They are about people spending their OWN dollars which induces far more cost-conscious behavior, which will play one of the largest roles in bringing healthcare costs down for everyone. This is due to the fact that people spend their own money much more wisely as opposed to “using their insurance.”

HSAs can be structured to reward those who live a healthy lifestyle and give people the freedom to choose the level of insurance based on their needs. People who complete personal health assessments are given funds, and employers can fund the accounts much more cheaply than being forced to insure their employees. Preventative care is encouraged and is FREE. In addition, some people may choose to use HSA dollars to purchase a high-deductible plan in an effort to guard themselves against higher medical costs. The bottom line is the consumer is empowered to make their own decisions as opposed to the government.

The modern technology of government takeover is not improving the wellbeing of America’s healthcare system. Perhaps it is time to try an age-old, natural remedy that has historical proof of success…

Republican Representative Jack Kingston (GA) and 29 Republican co-sponsors filed legislation that would force Obama to actually be accountable by vetting his Czars. This is probably one of the most needed pieces of legislation that we will see in our lifetimes. Obama has a list of 34 Czars – some ‘positions’ that still need to be filled but of that number 27 have not been vetted by Congress. In 6 months Obama has taken it upon himself to bypass Congress and the American people by appointing his very own ‘shadow government’. The Czars report directly to him and are not held accountable to Congress; therefore, not held accountable to the American people – who pay their salaries.

From the United States Constitution - Article II, Section 2:

“[The President] shall have power, by and with the advice and consent of the Senate, to make treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the advice and consent of the Senate, shall appoint ambassadors, other public ministers and consuls, judges of the Supreme Court, and all other officers of the United States, whose appointments are not herein otherwise provided for, and which shall be established by law: but the Congress may by law vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments.”

This clearly states that what Obama is doing by appointing Czars left and right is a violation of the Constitution. I realize that Obama doesn’t seem to think much of our Constitution but we, the people, DO. The only government officials who can make policy are the members of Congress who WE nominate. The ‘Pay Czar’ cannot tell anyone what their salaries or bonuses will be limited to, it has to be legislated by Congress. Yet Obama seems to think that his Czars can do whatever they want and most people probably don’t understand that his ‘Yes we can’ is really our “Hell no you can’t”. Finally someone is standing up for us against Obama’s outrageous appointments.

I am currently researching Obama’s ‘Shadow government’ appointees and so far I am finding that some of these people are clearly radicals like Obama. There is at least one Socialist (Carol Browner), a fellow ACORN organizer (Adolfo Carrion Jr.), a complete nut job who wrote a book about sterilizing people to quash the growing population (John Holdgren) and his latest appointment Cass Sustein who believes that animals should have the same rights as people, including bringing lawsuits against people. These Czars are clearly not representative of America or Americans. They should not be anywhere NEAR the White House or Capitol Hill other than to attend one of Obama’s Wednesday night soirees.

Presidents in the past have had Czars but they usually act as advisors and do not make policy. Obama has specifically appointed these people to make policy. The most Czars in any administration was during George Bush’s reign who appointed 14 Czars in 8 years. Obama has appointed twice the amount of Czars in 6 months as Czarist Russia had in 300 years! As Kingston points out on his website: “At this rate, we will have: 272 czars in Obama’s fist term (48 months) 544 czars if he lasts two terms (96 months)”. This is obviously Obama’s attempt to bypass Congress to further push his radical agenda by appointing radicals to make policy.

We all must push for this Act to be brought to a vote and passed. This is for our present and our future. We cannot let the House Oversight and Government Reform Committee sit on this. After reviewing some of the representatives who are on the Committee, it is clear that this may be a battle as it is filled with partisan party-line-voting Democrats -Tierney, Maloney, Kennedy, Kucinich - are some examples. Email, call, write, fax every member of the Committee to let it be known that WE, THE PEOPLE, are aware of the Act and fully support it. The Republicans have brought this Act forward, it is now up to us to tell Obama “Hell no you can’t”.

http://www.examiner.com/x-9100-Boston-Conservative-Independent-Examiner~y2009m7d25-Republicans-file-the-Czar-Act-of-2009--its-time-to-tell-Obama-Hell-no-you-cant

Links for information in the article:
http://kingston.house.gov/News/DocumentSingle.aspx?DocumentID=137527
http://www.opencongress.org/bill/111-h3226/text
http://kingston.house.gov/UploadedFiles/BKAC.pdf
http://www.opencongress.org/committee/show/281_house_oversight_and_government_reform

Part one of this column focused on criticisms of the Obama Administration’s Plan. This part will focus on dispelling the myths of a decentralized, free market approach, which should be the solution to providing affordable health care. The last and final part of this column (to be published next week) will elaborate on why a free market solution should be sought.

President Obama will address the nation in another press conference this evening urging the nation to back his health care proposal. It is very likely that he will continue to preach the same old, tired talking points in an effort to win support. The public is beginning to catch on, as support for Obama’s health care plan is steadily declining.

My columns are not meant to predict the future by any means, but it might be safe to say that at least two of these common myths will be discussed by the President this evening.

Myth Number One: Those who oppose Obama’s plan are in denial of the fact that America’s health care system needs reform and accept the status quo.

This statement could not be further from the truth. Politicians (including a growing number in the Democrat Party), columnists and economists who oppose the President’s plan have never said that the health care system is not in need of reform. Instead, they oppose a big-government, centralized solution.

Myth Number Two: More government control in the health care system is needed because insurance companies have “run-away profits” and are gouging the consumer.

Even Fox News’ Bill O’Reilly emphasizes this falsehood on a regular basis in his “talking points memo.” Leftists such as Michael Moore tout France’s system – a country he suggests the United States emulate. Perhaps Mr. Moore is onto something. The eye-opening fact that no one discusses is that France’s private health insurance market is less regulated than the United States. How so? Regulations in America come from both the Federal and State level. Many states in America require community ratings and/or put limits on premiums whereas private insurance in France is mostly experience rated. There are no regulations that specify what benefits must be included in coverage. Regulation from the U.S. Congress and state governments have gone as far as dictating which drugs doctors can prescribe and the dosage of medication that can be given. The health care market is one of the most regulated markets in the nation.

These types of strict mandates are solely responsible for driving up the cost of coverage. According to the Council on Affordable Health Insurance, state government mandates (mandates that prescribe everything from the treatments private insurance must cover or additional services they must add) can increase the cost of health insurance sold in the individual market by 20 to 50 percent, depending on the state and the mandate. In its annual survey, the group counted more than 1,900 benefit mandates in 2008. (1)

Therefore, the pundits have it backwards – more government regulation in the health care market INCREASES costs for consumers.

Myth Number Three: The free market health care system has failed the American people. Anyone who espouses such a system is obviously “in bed” with the insurance companies and not on the side of the hard-working American people who see their health care costs skyrocketing.

This is a very easy liberal talking point to debunk. America’s health care system is NOT free-market based! The dispelling of the penultimate myth is proof. The U.S. system is the furthest thing from a market-based system. Fifty cents out of every dollar paid for health care comes from the GOVERNMENT. (2) Since World War II, the health care market in the U.S. has been a hybrid system that utilizes very few free market principles and massive government intervention in most areas. The outcome has been an inefficient bureaucratic mess.

Centralized health care planners enjoy accusing advocates of a free market approach of being “in bed” with the insurance companies. However, is it the other way around? The answer can be found by tracing the history back to 1939 – the year of the inception of “The Blues” – Blue Cross and Blue Shield. Hospitals created Blue Cross and doctors started Blue Shield shortly thereafter. Under pressure from hospital and physician organizations and with the help of politicians, “The Blues” were able to win competitive advantages from state governments and special discounts from medical providers, which is how they and subsequent major insurance companies gained a MONOPOLISTIC position. Once these giant companies were able to gain most of the market share, the medical community could refuse to deal with other commercial insurers (which would have provided competition to lower prices) unless they adopted the practices followed by “The Blues.” Even the government’s Medicare and Medicaid plans are modeled after “The Blues.”

Those who support a decentralized system wish to end the monopolistic control of large insurance companies and force them to compete, which would play a significant role in lowering costs for the consumer. A decentralized system would also end the practice of state health insurance mandates. The federal government, through the "Health Care Choice Act," would allow health insurance to be sold across state lines. Through existing federal law, states could open their own markets to competition. In New Jersey, with the highest insurance rates in the country, this has just been done. If it were done in Illinois, a family living in Chicago, for example, could save upwards of $3,000 per year if they were able to buy their insurance in Iowa. (3)

In 2008, President Obama opposed the Health Care Choice Act. (4) Why would Obama oppose a measure that forces the insurance companies to compete and provide several low-cost options to the consumer? Insurance companies also oppose this measure. Why would they want to give up their monopoly? This action leaves one to wonder who is “in bed” with the insurance companies and whether this entire debate is not about care of hard-working Americans and more about power and control.

Myth Number Four: America is in a “health care crisis.” Immediate action is needed.

Rahm Emanuel says “you never want a serious crisis to go to waste.” Translation: when the government wishes to fundamentally restructure a major sector of the economy in which it stands to gain great power, it is best to sell it under the guise of protection when the public is too panic stricken to object. Power-hungry authoritarians have always sold their ideas at times when the public can be misled into thinking that personal choice and deregulation cause chaos in the market and that centralized planning best manages systemic risk which maintains economic stability. However, government power grabs quickly lose public support once the public realizes what these measures entail.

President Obama campaigned on transparency. In the first seven months of his presidency, transparency has meant ramming legislation through Congress without representatives reading the bill! A perfect example was the stimulus package that was passed earlier this year. The situation was too dire for Washington to play the usual political games. Immediate action was needed. This is the type of “change” in which America could be confident – the public’s elected officials passing legislation without reading it first.

The President has just recently admitted that he does not know all of the measures that are contained in the current health care bill. During a conference call with leftist bloggers, a blogger from Maine claimed Section 102 of the House health legislation would outlaw private insurance. He asked: “Is this true? Will people be able to keep their insurance and will insurers be able to write new policies even though H.R. 3200 is passed?” President Obama replied: “You know I have to say that I am not familiar with the provision you are talking about.” (5)

Myth Number Five: A government option provides more competition as it serves as a competitor to the private industry. Anyone who says this plan is a “back-door” government takeover of health care is simply not telling the truth.

Perhaps the President was confused by the question the blogger from Maine asked because he seems to be confused over the fact that the government can provide additional competition in the health care market.

In order to effectively break this point down, the following question must be asked: Can a private company with limited capital compete with a government plan that has access to a blank checkbook? Furthermore, if the government has the power to mandate and regulate a private company with limited capital, how can it compete? The answer is NO. A similar comparison would be a “mom and pop” shop competing with the likes of Wal-Mart. Just like the many well-intended government incentives of the past, the outcome is very different than the initial intention.

Since the U.S. Treasury gives Congress an unlimited supply of blank checks, the government can offer a lower price for its health care plan in the beginning in order to attract people towards the plan. After all, what is another trillion dollars added to the deficit at this point? Private insurance companies do not have access to such capital. In addition, if Obama’s plan is passed, the government will have even stricter control over what is to be included in the coverage. The end result will be many people dropping their private plan in favor of the government’s plan.

Moreover, the blogger in Maine had a very valid concern. There is a provision in the bill that restricts people from choosing a private plan should they lose their job. Page 16 of the now 1,018-page bill states the following: “Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.” (6)

Obama’s insistence that Americans will be able to keep the coverage they have if they are satisfied is a half-truth because there are exceptions. Page 16 of this bill states that those who currently have private individual coverage won't be able to change it, and neither will those who are laid off or leave a company to work for themselves be free to buy individual plans from private carriers.

In summary, there is one question I would like to ask of everyone: who is better equipped to make decisions regarding your well being and the well being of your family – you or government bureaucrats? Do not be fooled by the notion that everyone will receive quality care simply because they required to purchase insurance. Countries that have national health care systems have very serious problems that include rising costs, rationing of care and lack of access to modern medical technology. Profits and market-based mechanisms, (words despised by authoritative leftists) are the key reasons why America has been the leader in innovative technology and quality care and NOT the reasons why people cannot afford care, as blame there is attributed to government intrusion.

(1) JP Wieske & Victoria Craig Bunce. "Health Insurance Mandates in the States 2008." Council on Affordable Health Insurance, 2008, p3.

(2) Regina Herzlinger. Who Killed Health Care? America's $2 trillion Medical Problem – And the Consumer-Driven Cure. McGraw-Hill: 2007

(3) Greg Blankenship. "Should Affordable Health Care Stop at the State Border?" Illinois Policy Institute. February, 2008.

(4) http://online.wsj.com/article/SB122282743245193057.html

(5) http://fixhealthcarepolicy.com/in-the-news/obama-admits-hes-not-familiar-with-house-bill/

(6) http://www.ibdeditorials.com/IBDArticles.aspx?id=332548165656854