- Published on Tuesday, 23 February 2010 01:00
- Written by Investor's Business Daily Editorial
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Health Care: The president has unveiled a reform plan of his own ahead of Thursday's bipartisan summit. But it's no better than the lousy Democratic proposals that Americans have already dismissed.
The Obama plan appears to be based on the bills that were passed last year in the House and in the pre-Scott Brown Senate. While it leaves out the public option that was included in the House legislation, it adds a wrinkle that's just as harmful: price controls on insurance premiums. Americans aren't going to want this rancid stew of legislative arrogance any more than they wanted the bills that were rammed through Congress. Our own polling shows that 34% strongly oppose Congress' overhaul plans while only 24% strongly support.
When the "strongly oppose" and "somewhat oppose" responses are combined, the poll shows 45% are against the Democrats' proposals. Independents oppose the plans 51% to 34%.
While the administration's proposal might get some initial support because it regulates insurance costs, the public will recognize the rest of the plan as something it's seen and rejected.
It seems the White House is cynically using the new wrinkle to take advantage of the anger toward insurance companies. The good news is that wrinkle should smooth out once opponents explain why restrictions on premium increases will leave the public with less coverage, as insurers will have no choice but to ration benefits.
The opponents — hopefully every Republican holding elected office — could start by repeatedly pointing out that Larry Summers, President Obama's chief economic adviser, not a GOP operative, said: "Price and exchange controls inevitably create harmful economic distortions. Both the distortions and the economic damage get worse with time."
The opposition should also ceaselessly tell the public that the ultimate consequence of premium caps on health insurance — if not the ultimate goal of the Democrats — is the collapse of the industry.
Private firms will leave the market when government restrictions make it unreasonably hard to make a profit. That will happen when the caps are combined with the inevitable federal mandates outlining the wide array of conditions that insurers must pay for and the rules that govern how coverage is sold.
New York has bitter experience with coverage rules. Since the early 1990s the state has forced insurers to provide insurance to people who are already sick and required them to set premiums at the same rate for all customers despite differences in age and health.
New York's market hasn't yet crumbled, but only because insurers have been able to increase premiums. New York now has, at roughly $9,000 a year on average, the highest rates in the country.
Soaring premiums can't happen in a regime in which they are capped. When caps are added to mandates, insurers have nowhere to go but out of the health insurance business.
"We are sort of a case study of what not do," says Mark Scherzer, identified in Sunday's Los Angeles Times as "a consumer attorney who helped lead the fight for New York's changes in the early 1990s."
We see nothing in the Obama proposal that makes it more acceptable than what the Democrats have already put up.
• It won't cut costs. Its $950 billion price tag for 10 years is even higher than the federal estimates, which were insanely optimistic, for the bills that have already been passed.
• It won't insure all the uninsured. The White House says it will cover 31 million Americans who are without coverage. That still leaves as many as 15 million or 16 million without medical insurance.
• It won't increase Americans' control of their health care. It will require people to buy insurance and force businesses that don't insure their employees to provide coverage. That's more government.
• It's not what the people want. By more than a 2-1 margin, our IBD/TIPP poll found, Americans want Congress to start fresh with a new blueprint, not rehash what they've clearly rejected.
No amount of we-know-what's-best, force-it-on-an-unwilling-public arrogance can change these facts. Yet the Democrat machine, confident its ideas are so strong that they can repeal the laws of economics, refuses to end its offensive against the people.
We are far beyond the point at which we can admire their tenacity while disagreeing with their solutions.
What we need is a clean, quick kill of a plan — an Obama course that would drive our health care system into an abyss from which it would never escape.