“This bill does not entail a government takeover of health care” – what that means is that it doesn’t provide the sole source of health insurance in this country but it does takeover health care. Let me explain. The law controls almost every aspect of health care now starting with the mandate. It requires that individuals purchase a product from a private company or face a fine from the government. How this isn’t unconstitutional[i] I don’t know but this is just the beginning. It also controls what type of plans are allowed to be offered, how much they cost, who can offer them, how much the business who offers health insurance can pay its employees, how much profit a company can make, and even where an individual can purchase their health care from.

The Cato Institute – a Libertarian think tank in Washington DC wrote a briefing paper in September of 2009 about how the health reform legislation would be a government takeover. Congressional Democrats and the Administration will claim that this isn’t a government takeover of health care because you still have a choice to purchase health care from a private provider not a public option. The Cato institute report states “The most hazardous health reform measure before Congress is not the so-called ‘public option,’ but proposals to make health insurance compulsory via an individual or employer mandate.”[ii]

The Report goes on to quote text from the non-partisan Congressional Budget Office about the individual mandate.

“A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States. An individual mandate would have two features that, in combination, would make it unique. First, it would impose a duty on individuals as members of society. Second, it would require people to purchase a specific service that would be heavily regulated by the federal government.”[iii]

This is from the source the Congress and White House trusts to calculate the cost of budget proposals. In a sense this is the government admitting that this is a government takeover of health care. But you don’t have to believe me yet. Keep reading.

The way the government enforces this mandate is with a “financial penalty” (a fine imposed by taking it from your tax refund) that the individual has to pay if they don’t have health insurance.  How is the government forcing citizens to purchase a product, from a private organization or the government (Medicare, Medicaid, CHIP etc…) not a takeover of health care? Here is the language from a Kaiser Family Foundation (KFF) report explaining the individual mandate:

“All individuals will be required to have health insurance, with some exceptions, beginning in 2014. Those who do not have coverage will be required to pay a yearly financial penalty of the greater of $695 per person (up to a maximum of $2,085 per family), or 2.5% of household income, which will be phased-in from 2014-2016. Exceptions will be given for financial hardship and religious objections; and to American Indians; people who have been uninsured for less than three months; those for whom the lowest cost health plan exceeds 8% of income; and if the individual has income below the tax filing threshold ($9,350 for an individual and $18,700 for a married couple in 2009).”[iv]

If this isn’t bad enough, the government also forces business to provide health insurance, even though individuals should have access to buy their own insurance through the “Exchanges.” And if they don’t provide health insurance, guess what? They get fined.

Businesses “with more than 50 employees that do not offer coverage and have at least one full-time employee who receives a premium tax credit, (will have to pay) a fee of $2,000 per full-time employee, excluding the first 30 employees from the assessment. Employers with more than 50 employees that offer coverage but have at least one full-time employee receiving a premium credit, will pay the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full time employee.” [v]

The one caveat is that if the company does offer insurance but the employee opts out to purchase coverage themselves the fine is not levied. This is control through taxes and fines of a company’s business practices. They tell the company how to do business in regards to health care which can affect their profit margin and ultimately their survival. How is this not a government takeover of health care? How about I provide more evidence?

Where in the constitution does it say that the Federal Government must provide health care for its citizens? It doesn’t. The Tenth Amendment to the constitution states, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”  But guess what, this legislation forces the states to provide more coverage for health care by expanding “Medicaid to all individuals under age 65… with incomes up to 133% FPL (Federal Poverty Level) based on modified adjusted gross income. All newly eligible adults will be guaranteed a benchmark benefit package that at lease provides the essential health benefits.” [vi]

The states have to provide Medicaid coverage to these newly eligible individuals whether they have the money or not. Meaning that if the state of California, which can’t even keep the City of Los Angeles’s budget solvent,[vii]  enrolls thousands of new individuals into Medicaid they have to figure out a way to pay for it. Now the Federal Government is nice enough to provide 100% of the funding for 2014-2016 and then it regresses down to 90% for 2020 and subsequent years. What does this mean? It means that the federal government has taken control of Medicaid (government run healthcare) away from the states by effectively paying for it with federal money. This has already been done but it is even more evident with this new legislation.

If you are still not convinced that this is a government takeover of health care here is even more evidence. The government not only controls the individual’s right to buy health insurance, the business practices of the employers who provide health insurance coverage, and the state’s constitutional right to pass health care laws, but they control through taxes, fines and mandates, the actual health insurance providers, prescription drug companies and medical device manufacturers. You will see these facts again when I show that this legislation will actually increase the cost of insurance but it is relevant here too.

If you look at the language of the bill it requires citizens to have “qualifying” health coverage. And if you look at the Medicaid example above it mentions a “guaranteed benchmark benefit package that at least provides the essential health benefits.” Guess what? The government decides what qualifying or benchmark benefits mean. “The necessity of specifying what constitutes “qualified” coverage gives politicians the power to dictate the terms of every American’s health insurance policy—a power that health care providers inevitably capture and use to increase the required level of insurance.”[viii]

That means that the insurance company will have to provide a certain level of coverage dictated by the federal government which will inevitably be more comprehensive, and more expensive than you might otherwise need.

How about a hypothetical situation that illustrates the point I just made? What if the government decides that a basic health plan must cover a whole range of things that a 26 year old, non-smoking male with no history of medical problems, no chance of getting pregnant, low chance of getting diabetes or other obesity related illnesses, no need for drug or alcohol treatment, in-home care, etc…, should have? Why would he want to pay for all these services if he does not need them? He wouldn’t, but he wouldn’t have a choice. Think this can’t happen? It did in Massachusetts, whose health care mandate inspired the federal law. [ix]

This means the government controls which product the insurance companies can sell. Sound like a government takeover yet? Check this out:

Under the new law the government will “impose an excise tax on insurers of employer-sponsored health plans with aggregate values that exceed $10,200 for individual coverage and $27,500 for family coverage.”[x] I believe this is the tax on the “Cadillac” plans that you hear about which provide a huge range of coverage but cost a fortune.

This next piece hits businesses again by actually making it harder for them to provide for their retired employees. The law will “eliminate the tax deduction for employers who receive Medicare Part D retiree drug subsidy payments.” [xi] I think this is the Medicare Doughnut hole (not sure though) you hear about. The government is making it harder for companies to provide their retired employees help paying for prescription drugs. But it gets even worse.

The law will “impose new annual fees on the pharmaceutical manufacturing sector (drug makers).”[xii] It goes on to list the billions of dollars drug manufacturers will have to pay the government. This will cause the drug companies to pass the cost of these fees onto the consumer by increasing the cost of their product. Prescriptions get more expensive and retirees have less help to pay for them. This is more government control over the actual medicine doctors prescribe to patients.

But wait! There’s more! The law would also impose billions of dollars in fees on the health insurance sector (the companies selling the actual product), including non-profit insurers (only 50% for them), and would impose an excise tax of 2.3% on the sale of any taxable medical device. [xiii]

Despite the cost implications this means that the government controls what type of product the insurance companies can sell and they impose progressively higher fees on them every year until 2018 at which point the fee levels out. So the government can tell the insurance companies what to sell and they essentially control their profitability by imposing fees which impacts the stock price and therefore their profit margin. And lest I forget, the law also limits the amount of money the insurance company can pay its executives. Yeah – the government can tell a private company how much money it can pay its employees.

If after reading all this evidence you are still not convinced that this is in fact a government takeover of health care, well I have saved the best for last. The shining example the government rolls out every time someone says this is a government take over. The Exchanges! The Exchanges are supposed to give individuals more choice. The individual under this law will actually have more freedom to choose their own health insurance and therefore this can’t be a government takeover. Not so fast!

The government basically controls every aspect of the exchanges. They might let the states set up the exchanges and they might be administered by a non-profit agency (or a government agency in some cases) but the government controls what type of plans are allowed to be offered in the exchanges, the requirements for how the exchanges operate, who can offer plans in the exchanges and the funding for the exchanges. The law will “Require the Office of Personnel Management to contract with insurers to offer at least two multi-state plans in each Exchange. At least one plan must be offered by a non-profit entity and at least one plan must not provide coverage for abortions beyond[xiv] those permitted by federal law. Each multi-state plan must be licensed in each state and must meet the qualifications of the qualified health plan.”

The Exchange which is supposed to give you more choice is controlled by the government. One of the plans has to be offered by a non-profit entity. What happens if the health insurance providers in your area are all for profit entities and they provide good health plans? It means that there has to be at least one non-profit, even if it does not operate as efficiently, does not offer the best plan option, does not have the best customer services structure etc. This seems minor but it is a form of government control.

The real issue is the state license requirement and the qualified health plan requirement. This is an area of real concern with regards to government control over health care because not only does it restrict choice through regulation but it will ultimately constrain the Exchanges and will not create the competition that the government is promising. While licensing allows for a certain quality standard it also allows for self interest. “Licensing allows physicians to restrict entry into their profession and to restrict the supply of substitutes for their services. By lobbying legislatures to restrict the scopes of practice of nurse practitioners and physician assistants, physicians can reserve certain tasks for themselves. Such restrictions increase the demand for physician services and increase physician incomes. They also make medical care more expensive and reduce access.”[xv]

This is an example of government control already in existence and the new law places even more control in the hands of the government. I will present this information again when I discuss how the law does not actually reduce the cost of health care but simply makes it easier to pay for. I have clearly demonstrated that the government has taken over health care on almost every level and they are proposing to do even more.

Unlike the Massachusetts plan the federal health care law does not give the government the power to control premium increase rates of private insurance companies, yet. Under the proposed legislation “Health insurance premium hikes would be subject to government approval… The bill would empower the Health and Human Services secretary to review premium hikes and block them if they are unjustified.”[xvi]

This would give government control over how much money a company could charge for their product and could force private companies out of business. Think this wouldn’t happen in real life. It did in Massachusetts. “…the state Insurance Commissioner Joseph Murphy asked Suffolk Superior Court Judge Stephen Neel to compel health insurers to use last year’s rates when determining the cost of this year’s coverage for small groups and individuals…. In late March, after the state’s health insurers submitted their 2010 plans for review, Murphy rejected hundreds of the proposed plans, calling their costs ‘excessive.’ The insurers sued, saying the increased rates reflect rising medical costs.”[xvii]

Now the government would claim that they are protecting the citizens from abusive practices by the greedy insurance companies but in reality, they are laying the ground work for a complete government takeover of health care by being the only provider available. Now tell me after reading all of this information (I could talk about what the government did to HSAs but I felt this was getting a little long so I won’t) do you still believe that this law is not a government takeover of health care? If this is the kind of thing you are ok with then continue then vote for democrats in 2010 but if you are not vote for the candidate that promises to put an end to this. And hold them to their promise.

[i] http://www.cato.org/pub_display.php>pub_id=11600

[ii] Cannon, Michael F. (2009, September 23). All the President’s Mandates: Compulsory Health Insurance Is a Government Takeover. Retrieved April 24, 2010, from The Cato Institute Web site: http://www.cato.org/pub_display.php?pub_id=10576

[iii] Ibid

[iv] http://www.kff.org/healthreform/upload/8023-R.pdf

[v] http://www.kff.org/healthreform/8061.cfm.

[vi] Ibid

[vii] http://articles.latimes.com/2009/feb/28/local/me-la-budget28

[viii] Cannon, Michael F. (2009, September 23). All the President’s Mandates: Compulsory Health Insurance Is a Government Takeover. Retrieved April 24, 2010, from The Cato Institute Web site: http://www.cato.org/pub_display.php?pub_id=10576

[ix] See Victoria Craig Bunce, JP Wieske, and Vlasta

Prikazsky, “Health Insurance Mandates in the

States 2006,” Council for Affordable Health Insurance,

March 2006, http://www.cahi.org/cahi_con

tents/resources/pdf/MandatePub2006.pdf; Massachusetts

Commonwealth Connector, “Minimum

Creditable Coverage (MCC) Checklist (Version

1.0),” February 23, 2009, http://www.ma healthcon

nector.org/portal/binary/com.epicentric.content

management.servlet.ContentDeliveryServlet/Healt

h%2520Care%2520Reform/What%2520Insurance

%2520Covers/MCC%2520Background/MCC%252

0checklist.pdf; and Victoria Craig Bunce and JP

Wieske, “Health Insurance Mandates in the States

2009,” Council for Affordable Health Insurance,

2009, http://www.cahi.org/cahi_contents/resource

s/pdf/HealthInsuranceMandates2009.pdf.

[x] http://www.kff.org/healthreform/8061.cfm

[xi] Ibid

[xii] Ibid

[xiii] Ibid

[xiv] Ibid

[xv] http://www.cato.org/pubs/handbook/hb111/hb111-15.pdf

[xvi] http://www.recordonline.com/apps/pbcs.dll/article?AID=/20100423/BIZ/4230369

[xvii] http://bh.heraldinteractive.com/business/healthcare/view/20100417state_hits_health_hikes_would_force_insurers_to_charge_last_years_rates/

The Party That Forgot about Jobs – Rich Lowry – National Review Online.

The Die Is Cast – Jonah Goldberg – National Review Online.

A Policy of Unreality – Mario Loyola – National Review Online.

Not Tax Cuts, Not Wars, and Not Bailouts – Kevin D. Williamson – National Review Online.

In the spirit of fairness I thought I should link an NY Times Article by Paul Krugman stating that the plan is actually just more “Voodoo economics” He cites the CBO report stating that this plan would actually increase the deficit and debt over current law. I saw take a look at the report and see what you think.

Take some time to check these out and think about who you want running the country when it comes time to vote in 2012 – a Republican party influenced by Paul Ryan, or a Democratic party controlled by the same leaders that worsened the crisis we are currently in.

Ryan’s Leap – Charles Krauthammer – National Review Online.

Dem Congressman who called for GOP Gov. to be put against a wall and shot now pleads for civility | Washington Examiner.

A liberal bargain: Silence a whole movement for the price of one man | Washington Times Communities.