Obama Announces "New" Healthcare Plan

February 24, 2010

New American

Alex Newman

President Barack Obama unveiled a “new” proposal for “health care reform” Monday which is suspiciously similar to the version passed by the Senate, though it includes other provisions like more tax increases and more new taxes. The estimated taxpayer price tag so far: $1 trillion.

Like the health care bills passed by the Democrat-controlled House and Senate, Obama’s proposal purports to unconstitutionally subsidize abortion (despite grandstanding to the contrary) while requiring that nearly everyone purchase health insurance. The non-compliance fines in the administration’s plan, however, would be even higher than those proposed by the Senate.

Other differences inherent in Obama's plan include new Medicare taxes on investment income such as rent and stock dividends. The proposal would also make more than $120 billion in cuts to Medicare Advantage, more than the Senate’s proposal. Additionally, at least $10 billion in extra fees from the drug industry would help provide some of the funding for the scheme, though these costs will simply be passed along to consumers or taxpayers anyway.

Another difference in the new plan is the removal of some special deals obtained by certain senators in exchange for their votes, like the well-publicized agreement made with Democratic Senator Ben Nelson of Nebraska that would have required federal taxpayers to pay the full cost of new Medicaid patients in his state. That provision has now been extended to all states. But like the Senate’s bill, the new proposal does not include the so-called “public option.”

Under Obama’s new plan, companies with more than 50 employees would be forced to offer health insurance or pay thousands of dollars in fines per worker. But critics have already seized on this provision. "A lot of these small employers are just starting out and some of them can't afford to provide health insurance," explained Randel Johnson, a vice president of the U.S. Chamber of Commerce. "Some who can't still may not be able to pay this fine." Perhaps that’s why America will need the new “jobs” bill.

Tough new regulations for insurance companies make up another component of the proposal. Among them: prohibition on denying coverage to people with pre-existing conditions and charging more money to insure women. Raising rates without government approval would also be forbidden. Under Obama’s plan, the federal government would also unconstitutionally grant itself the authority to reduce insurance prices and even force companies to give customers “rebates” if it decides they were charging too much.  

The proposal would delay by five more years the implementation of the so-called “Cadillac tax” on high-end insurance policies. Labor unions had vigorously opposed the provision originally, but now it would take effect in 2018 rather than 2013, possibly eliminating some of the criticism.

Obama’s plan also aims to move more Americans onto federal dependency than even the Senate bill would have. The new proposal provides health insurance subsidies to families earning more than four times the federal poverty level. It also unconstitutionally mandates the creation of state-level “exchanges” for certain classes of people to purchase insurance through. 

In the documents released Monday, the administration attempted to conceal government power-grabs under the title “Putting Americans In Control of Their Health Care” using lofty-sounding headers like “Improve Individual Responsibility” and “Strengthen Employer Responsibility.” But critics are not buying it. 

“A lot of Americans will be delighted if the president promises them something for nothing, like health insurance that covers more costs every year and doesn’t raise premiums to reflect that,” Cato Institute’s executive vice-president David Boaz told Politico.com. “But perhaps a growing number of voters are coming to recognize that indeed you can’t get something for nothing.”

Other opponents highlighted the futility of some of the proposed schemes. “The use of price controls on goods and services (with a 4,000-year history) is among the oldest ploys among politicians,” explained Director Robert Moffit of the Heritage Foundation’s Center for Health Policy Studies. “They shift costs to consumers in the form of shortages of the controlled goods and services. They are guaranteed to make existing health insurance market distortions, which are bad enough already, even worse. But they will appeal to economic illiterates who believe one can get something for nothing, or more for less. Smart old politics, dumb old economics.”

Even big-government legislators like New York U.S. Rep. Peter King blasted Obama’s proposal as "just a recycled version of government run health care." In the Senate, Minority Leader Mitch McConnell told Fox: "The fundamental point I want to make is the arrogance of all of this. You know, they are saying: 'Ignore the wishes of the American people. We know more about this than you do. And we're going to jam it down your throats no matter what.' That is why the public is so angry at this Congress and this administration over this issue." A “bipartisan health care summit” will be held on Thursday to discuss the “new” proposal.

But regardless of whether the “Proposal” (yes, Obama used a capital P on every reference) receives bipartisan support, the U.S. Constitution does not give the President or Congress the power to dictate what kind of insurance Americans should have or whether they should have it at all. The government also possesses no legitimate authority to tinker with private sector prices — even if it were a good idea and wouldn’t create the calamity that will undoubtedly ensue.  

This new proposal, like the House and Senate versions, again begins with several false premises: that the federal government has the authority to meddle in health care or force Americans to purchase some good or service, that government meddling in the market can actually reduce costs, and that more of the same type of “reforms” will somehow miraculously work better than all the past government-led health care reforms.

With government involvement, prices will rise, as they always do. And despite government claims, the only way to actually control prices will be through rationing medical care. Not only that, the government does not have any more money. Leviathan is borrowing and printing trillions of dollars just to stay afloat. It is essentially bankrupt. 

Any of the proposed new packages will simply serve to accelerate the collapse of America’s already centrally planned, over-regulated and over-taxed health care system. The resulting fiasco will inevitably be used as a pretext for further government clamp downs on health care and the market, eventually resulting in a totally government-run system which will provide worse coverage for a higher price — if at all. Congress should ignore the President’s proposal and drop health care reform entirely for now, since free-market solutions are obviously not on the table for the 111th Congress.

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