Free Markets, Free People

Cap-And-Trade And Health Care

Some relatively good news and some bad news. The good news has to do with “cap-and-tax” as the WSJ article cited refers to “cap-and-trade”:

Tennessee Republican Lamar Alexander called it “the biggest vote of the year” so far, and he’s right. This means Majority Leader Harry Reid can’t jam cap and tax through as part of this year’s budget resolution with a bare majority of 50 Senators. More broadly, it’s a signal that California and East Coast Democrats won’t be able to sock it to coal and manufacturing-heavy Midwestern states without a fight. Senators voting in favor of the 60-vote rule included liberals from Wisconsin, Michigan and West Virginia. Now look for Team Obama to attempt to impose cap and tax the non-democratic way, via regulation that hits business and local governments with such heavy costs that they beg Congress for a less-harmful version.

I say relatively good news because the author is right – if the Obama administration can’t get it through Congress, there’s little doubt they’ll look for an administrative way to impose cap-and-trade through the executive branch. One route may be through the EPA.

Of course, there is always the distinct possibility that one of the Democratic Senators who is presently against limiting the filibuster will be pressured into changing his mind. And then there are always the RINOs.

But the possibliity remains that the cap-and-trade economy killer may be defeated in Congress, or at least delayed for a while. If passed, you could rest assured we’d not be seeing an economic recovery anytime soon.

However, cap-and-trade isn’t the only problem on the horizon. The health care push will be coming up soon as well, now that Congress has passed the Obama budget blueprint with no Republican support.

The most important remaining fight this year is over health care. Democrats seem intent on trying to plow that monumental change through with only 50 votes, even as they negotiate to bring along some Republicans. We hope these Republicans understand that a new health-care “public option” — a form of Medicare for all Americans — guarantees that the 17% of GDP represented by the health-care industry will be entirely government-run within a few years. This is precisely Mr. Obama’s long-term goal, though he doesn’t want to say it publicly.

It is a back-door means of claiming the reforms are “market” oriented while setting up the system to be quietly shifted to government control. And this at a time when more and more doctors are leaving the Medicare system because of low payment.

In the case of health care, the use of “reconciliation” appears to be a possiblity.  That means, as an exception to the rule which now requires 60 votes for cloture on all measures of law, the Senate could require a mere majority (51 votes) to pass this monstrosity and see the government devour another 17% of GDP.

The game plan is fairly evident. Grace-Marie Turner, president of the Galen Institute, said in an interview:

“We really have a pretty good idea of the outline of the plan they are going to be proposing,” she said. They’ll want to “require everyone to have health insurance and require all employers to pay.”

Since some companies and individuals may not be able to afford that, the taxpayers will be told they are making up the difference, she warned.

The real danger, she suggested, is that with a government-run program, private insurance soon will start disappearing.

“If you expand access to government programs, more and more will drop private coverage,” she said. “A lot of this is going to be, I fear, replacing the private coverage with taxpayer supported coverage.”

That will just raise the costs even higher, and be the first step to what she expects eventually will be “a monopoly player.”

Routed through the government bureaucracy, the same inefficiencies that every government run health care service will emerge. And as with any system in which unlimited demand meets finite supply, some sort of rationing will take place. Since government will be the monopoly player, as Turner calls it, that rationing won’t be by price, as it now works, but instead by denial of service:

Already, she said, $1.1 billion is being allocated for “comparative effectiveness studies.”

That will be “what treatments are good and bad, what’s going to be available to us or not. That’s the first step toward rationing,” she said.

That $600 billion dollar “downpayment”, as Obama calls it, will eventually morph into a deficit of trillions. Why? Because the promise is low-cost universal health care. And there is no such animal that is worth a tinker’s dam.


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6 Responses to Cap-And-Trade And Health Care

  • Here’s what I don’t get —  WTH those clowns want to model our system after the Canadian and UK systems, which are two of worst on the planet.

    The real danger, she suggested, is that with a government-run program, private insurance soon will start disappearing.

    DrRich agrees:

    DrRich today has a definitive call to make regarding the American health insurance companies.
    Sell. Now.
    It should come as no surprise to regular readers that DrRich believes the health insurance companies are ultimately doomed.

    (He also suggests Obama might want to keep GITMO, to house “healthcare terrorists.”   Strategies for maintaining some semblance of health care liberty here.)

  • Why would doctors participate?  What are they going to get out of it?  Anything like what they earn today?  If they opt out…what then?

    • I think you’ll see various “licensing” laws that will pop up.  The NYT article mentioned that at one hospital, a fraction of physicians affiliated with a particular hospital accepted Medicare.  I wouldn’t be surprised to see a law suggesting that “any health care practitioner affiliated with a hospital with more than 20 beds MUST accept Medicare”.  

      Alternatively, the private insurance market could completely dry up.  Massachusetts is a case study.  Gov’t insurance underpays health care providers as we already see.  Then gov’t forces employers to provide insurance to every employee, or pay a tax.  Taxpayers will pick up the difference.  As more people go on the public insurance plan, hospitals and providers lean more on private insurance to make up the shortfall from being under-paid by public insurance.  The cost of private insurance goes up.  Once that cost eclipses the non-compliance penalty introduced by the state, employers stop purchasing private insurance and instead pay the penalty.  Private insurance dries up and all that physicians are left to accept is cash or Medicare.  Provider compensation drops significantly (as it is, physicians work more and more hours every year to maintain current income…kinda the opposite of other careers).  The “best and brightest” of younger generations look at the health care landscape, laugh, and look for more lucrative careers as plumbers.  After all, who would want to go $300k into debt, hold off your first job until 30, only to peak at $120k/year regardless of experience?

      The irony of it all, is that when the gov’t intervention produces a shortage of physicians, politicians will demand that only gov’t intervention can fix it.  Obviously, the reason that we’ve run out of positions (at some point in the future), is because it is too expensive to train them! (ignoring the rest of the problem: — too expensive to train for too little return).  Taxpayers will then be extorted to pay for physician training, similar as is done in some European countries.  Voila! You now have an industry affecting the lives of all citizens whereby the workers in this industry have been trained by the gov’t, receive all their income from the gov’t, and if you have a problem with the shoddy job they did, take it to the gov’t! Ha!

  • Why would doctors participate?  What are they going to get out of it?  Anything like what they earn today?  If they opt out…what then?

    Pssshhhh …how dare you come to obvious conclusions.

    As Calvaria said, it will undoubtedly come down to the government forcing doctors to participate through licensing. It will become a crime to practice medicine outside the confines of the government system. It will lead to the inevitable, just as it did in Canada, private insurance will be banned. All choice will be stripped from us, leaving us all to siffer through the terrible national Health care system, but the powerful will get their way just the same. Is a NHS hospital going to refuse a treatment to a government official because of cost? I think not.

  • I wouldn’t fault doctors for shrugging in this case — who wants to go to med school all those years just to be a government drone?  It’s an insult to anyone who has the intelligence to become a physician.  The day they usurp my profession is the day I find another job.

    • The day they usurp my profession is the day I find another job.

      Fine in principle, but doctors make quite a lot of money and are no more well-suited for any other high-paying professions outside the medical field than anybody else with a BA.  Most younger doctors have huge student loan payments to make that all but require them to have high-paying jobs.  So, it seems to me a choice between keeping at least some of the money though one must sacrifice his professional autonomy and pride, or take some other job and deal with heavy financial costs that might well include bankruptcy.

      I have a good friend who is a radiologist.  She’s already seeing some of the effects that TAO has had on the market, especially his “squeezing” of Medicare / Medicaid costs.  What this basically means is that the government is paying much less for the services that doctors MUST provide.  In her case, it means getting paid $50 to read an X-ray instead of $75.  Not a lot of money, I grant you, but when she has thousands in student loan debt (AND lives in Seattle), every penny counts.  Further, it’s the principle of the thing: she worked her a** off to get through grad school, medical school, internships, residency, and fellowship, PLUS lived out of the country for med school, PLUS moved all over the country to complete her education and training, and would like to be repaid for the effort.  Unfortunately, she’s in a job that (in liberal minds) should be performed for free when necessary, so she’s stuck taking whatever she can get.  For now, the pay is still quite good.  How much longer that will go on with TAO and the democrat filth running the show is anybody’s guess.