How To Stop Socialized Health Care

How to Stop Socialized Health Care
Five arguments Republicans must make.
By KARL ROVE
It was a sobering breakfast with one of the smartest Republicans on Capitol Hill. We can fix a lot of bad stuff President Barack Obama might do, he told me. But if Mr. Obama signs into law a "public option," government-run insurance program as part of health-care reform we won't be able to undo the damage.
I'd go the Republican member of Congress one further: If Democrats enact a public-option health-insurance program, America is on the way to becoming a European-style welfare state. To prevent this from happening, there are five arguments Republicans must make.
The first is it's unnecessary. Advocates say a government-run insurance program is needed to provide competition for private health insurance. But 1,300 companies sell health insurance plans. That's competition enough. The results of robust private competition to provide the Medicare drug benefit underscore this. When it was approved, the Congressional Budget Office estimated it would cost $74 billion a year by 2008. Nearly 100 providers deliver the drug benefit, competing on better benefits, more choices, and lower prices. So the actual cost was $44 billion in 2008 -- nearly 41% less than predicted. No government plan was needed to guarantee competition's benefits.
Second, a public option will undercut private insurers and pass the tab to taxpayers and health providers just as it does in existing government-run programs. For example, Medicare pays hospitals 71% and doctors 81% of what private insurers pay.
Who covers the rest? Government passes the bill for the outstanding balance to providers and families not covered by government programs. This cost-shifting amounts to a forced subsidy. Families pay about $1,800 more a year for someone else's health care as a result, according to a recent study by Milliman Inc. It's also why many doctors limit how many Medicare patients they take: They can afford only so much charity care.
Fixing prices at less than market rates will continue under any public option. Sen. Edward Kennedy's proposal, for example, has Washington paying providers what Medicare does plus 10%. That will lead to health providers offering less care.
Third, government-run health insurance would crater the private insurance market, forcing most Americans onto the government plan. The Lewin Group estimates 70% of people with private insurance -- 120 million Americans -- will quickly lose what they now get from private companies and be forced onto the government-run rolls as businesses decide it is more cost-effective for them to drop coverage. They'd be happy to shift some of the expense -- and all of the administration headaches -- to Washington. And once the private insurance market has been dismantled it will be gone.
Fourth, the public option is far too expensive. The cost of Medicare -- the purest form of a government-run "public choice" for seniors -- will start exceeding its payroll-tax "trust fund" in 2017. The Obama administration estimates its health reforms will cost as much as $1.5 trillion over the next 10 years. It is no coincidence the Obama budget nearly triples the national debt over that same period.
Medicare and Medicaid cost much more than estimated when they were adopted. One reason is there's no competition for these government-run insurance programs. In the same way, Americans can expect a public option to cost far more than the Obama administration's rosy estimates.
Fifth, the public option puts government firmly in the middle of the relationship between patients and their doctors. If you think insurance companies are bad, imagine what happens when government is the insurance carrier, with little or no competition and no concern you'll change to another company.
In other words, the public option is just phony. It's a bait-and-switch tactic meant to reassure people that the president's goals are less radical than they are. Mr. Obama's real aim, as some candid Democrats admit, is a single-payer, government-run health-care system.
Health care desperately needs far-reaching reforms that put patients and their doctors in charge, bring the benefits of competition and market forces to bear, and ensure access to affordable and portable health care for every American. Republicans have plans to achieve this, and they must make their case for reform in every available forum.
Defeating the public option should be a top priority for the GOP this year. Otherwise, our nation will be changed in damaging ways almost impossible to reverse.
Mr. Rove is the former senior adviser and deputy chief of staff to President George W. Bush.

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