Thread: Mark Landsbaum: State-run health insurance reemerges in California

ocregister.com
OPINION
By MARK LANDSBAUM
Published: Jan. 13, 2012 Updated: 3:00 p.m.



A pending bill would establish the California Healthcare System, administered by another new band of bureaucrats, the California Healthcare Agency.

Demagogues know how to exploit our weaknesses. To gain control over us they slyly appeal to our genuine yearnings. They promise to relieve our universal sufferings. Too often they succeed in persuading many of us who should know better, and too many of us who have yet to learn better.

Universal health care is a particularly vile form of this demagoguery. Decades ago Americans were persuaded they could have their slightest sniffles and most critical illnesses treated into perpetuity, essentially on someone else's dime.

Who wouldn't want the best medical care for himself and loved ones if all it cost was a fraction of the real price?

The same deception has worked in countless other arenas. Buy a house without a down payment. The government will assume your risk. Get an education for a pittance. The government will foot the bill.

But these Ponzi schemes work only so long. Sooner or later we discover the government is ourselves. We meet the enemy, and his appetite is insatiable. We are the profligates running up the tab! And, inevitably, we cannot afford it.

California seems always in the vanguard of such self-deceptions. Have it all, for next to nothing. The government will provide.

There is yet another such scheme pending in the Legislature, a proposal for state-run universal health care. As if the mission of Senate Bill 810 were not foolish enough, proponents resorted to a mock funeral on the steps of the Capitol last week to dramatize deaths supposedly resulting from lack of medical care.

The fact is, it is extremely difficult to not be treated for medical problems in California, even if you don't pay. The law prohibits hospitals from turning away even illegal immigrants freshly arrived in the country. People without money have Medi-Cal and private charities that donate services, again, someone else picking up the bill.

But often it is not the 100-percent free-riders, but those who don't wish to pay the full cost of the medical care who complain the loudest. This attitude is inculcated by decades of being told the real cost doesn't matter: someone else will pay it.

We all are guilty of this. "How much is that co-pay?!"

Let's be clear. Devastating medical expenses bankrupt people and wipe out lifetime savings. The costs can be astronomical.

Let's also be clear on this: No one has a right to demand that someone else pay for his devastating problems.

That's tough medicine to swallow in these days of entitlement, as so many exceptions play out, such as tax-subsidized mortgages and tuitions.

Proponents of SB810, authored by the very leftist San Francisco Democrat Mark Leno, promise not only to feel your pain, they promise to relieve it. The government will provide.

It's interesting that to put this utopian-minded plan into action, the state will need the utopian-minded Obama administration to grant California a waiver. SB810 wants to go where (at least for now) even Obamacare dare not tread.

The bill would establish the California Healthcare System, administered by another new band of bureaucrats, the California Healthcare Agency, "under the control of a Healthcare Commissioner appointed by the governor and subject to confirmation by the Senate."

If you aren't getting a warm and comforting feeling with the prospect of politicians and bureaucrats in charge of your health care, good for you. You shouldn't.

All California residents would be included in a single-payer system, where the government will, "negotiate for or set fees for health care services." Are you feeling warm and comfy yet?

Despite centuries of experience that proves otherwise, the utopian-minded persist in believing that if government sets prices and wages, economic systems will hum along merrily. That has never happened, and never will.

What government management of economies results in are illusions like our own Medicare system. Granted, you will find many older people who praise Medicare for its coverage of needed treatments. These folks are akin to the early investors in Ponzi schemes, benefitting from contributions of later investors. Check back in 10 years and see how pleased Medicare recipients are when they nearly outnumber the new "investors" who must support them.

By benefitting from this bad system, we have encouraged more of it. We've dug the hole we now struggle to climb out of.

Here's an interesting tidbit about SB810. Section 140400 says, "All California residents shall be eligible for the system. Residency shall be based upon physical presence in the state with the intent to reside."

Free health care. All you have to do is live here.

That shouldn't attract much of a crowd, do you think? We suspect the equivalent of Ponzi-scheme early investors may discover sooner rather than later what overwhelming effects demand have on supply.

We mentioned above that the impetus for this problem was created decades ago. That was when the government began the shell game of health care insurance.

During World War II, when the government imposed wage controls, companies were permitted instead to provide employees remuneration in the form of health care insurance. Third-party spending was born in a big way, and remains the principle culprit in health care's escalating prices. When someone else pays, demand ratchets up unreasonably. In this case, companies paid the bulk of premiums because government permitted that expense to be deducted from their tax liabilities. "The government will pick it up," was the message. It stuck.

In his book "The Cure: How Capitalism Can Save American Health Care," Dr. David Gratzer characterized reliance on third-party spending to be "a formula for more."

To wean ourselves from this addiction of relying on more federal and state taxes to pay ever-rising medical bills, we must break the ties that bind us to the government. Easier said than done.

Nevertheless, conditions like today provide the perfect opportunity. Alas, when we should be using this health care crisis to free the system from destructive government control, people like the backers of SB810 instead want more of the same.

But health care should be deregulated – not further regulated – so market forces can bring costs under control. It would be painful, thanks to the huge market distortions created by decades of third-party gratuities from insurance companies and the government. But as long as someone else continues to pay the real cost, people selling health care and people receiving health care always will demand more.

The answer isn't to goop up the system with more layers of subsidies and entitlements. The answer is to free it from government's clutches.

Otherwise, get ready for provisions like SB810's Section 140612(a), which says a government "patient advocate" will establish medical reviews of disputed health care services and coverage. That should go well, huh? SB810's backers say it will "ensure the system provides efficient, appropriate, high-quality health care, and that the system is responsive to enrollee disputes."

If you don't find that claim ludicrous now, you will, should this bill become law.

Costs can be reduced only by allowing supply and demand to work, and by people agreeing to assume the risk and responsibility for their own health care. Then, charitable solutions would have room to maneuver to handle the most costly exceptions.

The market may not easily accommodate all exceptions, such as coverage for those with pre-existing diseases. But the present system and, certainly, universal government health care, with their perverse incentives, are incapable of handling even routine care much longer. The Ponzi schemes are playing out.

Contact the writer: mlandsbaum@ocregister.com

Contact the writer: or 714-796-5025

Mark Landsbaum: State-run health insurance reemerges in California | care, government, health - Opinion - The Orange County Register

Calling Medicare an Entitlement is a myth. Turning 65 a person has no choice but to except Medicare. If you do have Medical Insurance under a Retirement Plan you automatically receive a notice advising you that failure to apply for Medicare Insurance is reason to terminate you from your Health Insurance. We all know that relying strictly on Medicare Insurance is a risk. So we follow the rules and apply for our Medicare Insurance and a Supplemental Insurance through our Retirement Plan. The problem is that after all is said and done we end up paying more out of pocket with less benefits then we did before we had this great Entitlement.