Posted by: John Gilmore | September 16, 2006

Health ‘Reform’ Is Income Redistribution

Obama’s healthcare ‘reform’ is just one more way we are deceptively being moved to a socialist system of wealth distribution. We continue to pay more and more money to the government to redistribute as they see fit. Income taxes, social security, Medicare, all of the recent ‘stimulus’ and bailout packages, this proposed healthcare reform, etc.

This deception is always presented as something that must be done to ‘help’ us. The banking system is failing – so the government must now decide who gets help from our taxes. People can’t afford health insurance – so the government must somehow provide for them. Our auto industry is failing – so the government must take over. As government provides more and more ‘services’ – it continues to grow – taking more and more money out of the hands of private individuals and corporations. It will function for awhile – but eventually – the government will take such a large percentage of our income – the system will collapse on itself (couple this with the eventual collapse of our monetary system and you’ve got some catastrophic problems brewing). Government doesn’t create wealth and inspire us to take risks and work hard. Government destroys wealth (through taxes, waste, etc.) and kills innovation. Why work hard when I’m just going to give it away?

As I’ve said before – socialism fails because the government eventually sucks the life out of private enterprise and individuals. As we are taxed at higher and higher percentages over time – people eventually give up trying to earn a decent living (starting new businesses, creating jobs, taking risks, working hard to provide a better life, etc.) because no one wants to give away their hard earned income to a bloated bureaucracy that will waste a large percentage of it and then re-distribute what remains to others. People eventually say ‘enough’ and give up trying to do the right things – which is exactly what world leaders want. Slowly, over time, they are killing our rights as individuals. They are trying to ensure that we are eventually dependent on the government for everything. Once we are totally dependent on the world’s government – the people of the world will be led like sheep – and we already know how this ends.

Since none of us want to pay a large percentage of our income to the government – these programs must come with all kinds of stipulations. Take a look at what will be required for this healthcare system to work:

“Like the homeowner who waits until his house is on fire to buy insurance, younger, poorer, healthier workers will rationally choose to avoid paying high premiums now to subsidize insurance for someone else. After all, they can always get a policy if they get sick.

To avoid this outcome, most congressional Democrats and some Republicans would combine guaranteed issue and community rating with the requirement that all workers buy health insurance—that is, an “individual mandate.” This solves the incentive problem, and guarantees that both the healthy poor 25-year-old and the sick higher-income 55-year-old have heath insurance.

But the combination of a guaranteed issue, community rating and an individual mandate means that younger, healthier, lower-income earners would be forced to subsidize older, sicker, higher-income earners. And because these subsidies are buried within health-insurance premiums, the massive income redistribution is hidden from public view and not debated. “

This is typical of most government programs. The program cannot stand on its own in the market – so the government must enact all kinds of mandates to try and make it work.

I believe I can do a much better job of deciding how to spend my money than our wasteful government – and I think most Americans would agree.

As I’ve said before – we don’t need socialized healthcare. We need to look closely at the current system and determine the real causes of our problems. Regardless of how we decide to improve our healthcare system – it needs to stay private.

If we truly want to remain free – we need to significantly reduce taxes – not increase them. We need to live within our means – not continue to spend money we don’t have (on healthcare or anything else). We need significantly less government – not more.

We need to give power back to the people of the United States to run our nation.

jg – September 28, 2009
________________________________________
Health ‘Reform’ Is Income Redistribution

September 28, 2009

Wall St. Journal

By MICHAEL O. LEAVITT, AL HUBBARD

AND KEITH HENNESSEY

While many Americans are upset by ObamaCare’s $1 trillion price tag, Congress is contemplating other changes with little analysis or debate. These changes would create a massively unfair form of income redistribution and create incentives for many not to buy health insurance at all.

Let’s start with basics: Insurance protects against the risk of something bad happening. When your house is on fire you no longer need protection against risk. You need a fireman and cash to rebuild your home. But suppose the government requires insurers to sell you fire “insurance” while your house is on fire and says you can pay the same premium as people whose houses are not on fire. The result would be that few homeowners would buy insurance until their houses were on fire.

The same could happen under health insurance reform. Here’s how: President Obama proposes to require insurers to sell policies to everyone no matter what their health status. By itself this requirement, called “guaranteed issue,” would just mean that insurers would charge predictably sick people the extremely high insurance premiums that reflect their future expected costs. But if Congress adds another requirement, called “community rating,” insurers’ ability to charge higher premiums for higher risks will be sharply limited.

Thus a healthy 25-year-old and a 55-year-old with cancer would pay nearly the same premium for a health policy. Mr. Obama and his allies emphasize the benefits for the 55-year old. But the 25-year-old, who may also have a lower income, would pay significantly more than needed to cover his expected costs.

Like the homeowner who waits until his house is on fire to buy insurance, younger, poorer, healthier workers will rationally choose to avoid paying high premiums now to subsidize insurance for someone else. After all, they can always get a policy if they get sick.

To avoid this outcome, most congressional Democrats and some Republicans would combine guaranteed issue and community rating with the requirement that all workers buy health insurance—that is, an “individual mandate.” This solves the incentive problem, and guarantees that both the healthy poor 25-year-old and the sick higher-income 55-year-old have heath insurance.

But the combination of a guaranteed issue, community rating and an individual mandate means that younger, healthier, lower-income earners would be forced to subsidize older, sicker, higher-income earners. And because these subsidies are buried within health-insurance premiums, the massive income redistribution is hidden from public view and not debated.

If Congress goes down this road, health insurance premiums will increase dramatically for the overwhelming majority of people. Even if Congress mandates that everyone have health insurance, many will choose to go without and pay the tax penalty. If you think people are dissatisfied with health care now, wait until they understand that Congress voted to mandate hidden premium increases and lower wages.

There are wiser and more equitable ways to ensure that every American has access to affordable health insurance. Policy experts and state policy makers have experimented with different solutions, including high risk pools and taxpayer-funded vouchers subsidized for those who are both poor and sick. Medicaid, charity care, and uncompensated care provided by hospitals cover some of these costs today.

These solutions are imperfect, but so are the reforms being proposed in Congress. Congress should be explicit about who will pay more under its plans.

—Mr. Leavitt, former secretary of Health and Human Services (2005-2009), has served as the administrator of the Environmental Protection Agency and a governor of Utah (1993-2003). Mr. Hubbard (2005-2007) and Mr. Hennessey (2008) served as directors of the White House National Economic Council.

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