With the highly publicized White House Forum on Health Reform now in the rearview mirror, President Obama has taken his show on the road. The administration is in the midst of holding five other such forums across the country. These gatherings are intended to set the stage for congressional action later in the year. Paramount among Obama’s reform proposals is the promise of more “choice” among insurance plans for Americans, including the option to choose a government-run plan based on the one enjoyed by federal employees and Congress.
Americans certainly deserve more choice in health care. But patients should turn down the government-heavy brand of choice offered by Obama and demand instead the right to spend their healthcare dollars as they — not the government or their employer — see fit.
President Obama’s model for his new public plan is the Federal Employee Health Benefits Plan (FEHBP). Indeed, the feds have it good — in San Francisco, they can choose from about 14 different plans. That’s not surprising — federal workers are organized into powerful unions which have negotiated forcefully with the government for decades, to extract more and better benefits from taxpayers.
Opening up the FEHBP to everyone would result in the deterioration of the quality of the FEHBP, not an improvement in the quality of American health care overall. Ordinary citizens simply won’t be able to wield the same sway over the government as the public-sector unions.
The new FEHBP-style government plan may start out as an attractive option for many Americans, because it will likely cost less than traditional employer-sponsored health benefits.
But all American taxpayers currently subsidize the generous benefits enjoyed by the comparatively small number of federal employees. Where will the money come from to pay for all Americans to take advantage of the generous — and expensive — federal plan?
Eventually, the government will be forced to limit enrollment in the generous public option or to limit the services available to enrollees. With universal coverage Obama’s stated goal, we can safely bet that he’ll opt for the latter.
The track record of other government-run healthcare programs does not bode well for ordinary Americans’ health. Take Medicaid, for instance. Despite devouring about one-fifth of the nation’s health budget (up from about one-twentieth when it was founded four decades ago), Medicaid reimburses doctors at a rate so low that one third of doctors say they won’t accept Medicaid patients anymore.
Medicare has not yet hit the same crisis of care, but that’s because it’s a Ponzi scheme – the Bernie Madoff health plan. Through their taxes, more than 155 million working Americans pay for the health-care claims of 45 million Medicare beneficiaries. With every senior enjoying the tax revenue of three workers, it’s not surprising that most seniors approve of Medicare.
But soon, Medicare will be supporting more seniors than there are workers to pay for them. Unfortunately, the political class has shown virtually no interest in grappling with this budgetary doomsday.
Rather than push for a new government health insurance plan that is destined to fail, President Obama should grant Americans real choice in health insurance.
Unlike federal employees, most private-sector workers are lucky to have a “choice” of one plan at work. For this unfortunate circumstance, workers can thank a six-decade-old deformity in the tax code that makes employer-based health care a non-taxable benefit. As a result, a worker receives a health plan through work that he may not like — and is deprived of an average of $9,000 that he could have received as wages.
Rather than continuing to deprive workers of their hard-earned cash in order to provide them with substandard group insurance policies, Obama and Congress should amend the tax code to let American families use pre-tax dollars to buy plans that suit their needs. Such a system would guarantee patients infinitely more choice than the president’s plan offers.
Let’s hope the Obama team gets the message on true “choice” in insurance plan before its health reform road show returns to Washington.
John R. Graham is Director of Health Care Studies at the Pacific Research Institute.