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Thursday, March 11, 2010

A Government Takeover of the Economy?

Dan Gross:

What "Government Takeover"?, by Daniel Gross: There have been lots of absurdities in the debate—such as it is—about health care reform. There's the hypocrisy of people dependent on government-run health care complaining about government-run health care. And now comes the Republican canard that the current health care reform proposal constitutes a government takeover of one-sixth of the economy. Here are Rep. Steve Buyer of Indiana, Rep. John Fleming of Louisiana, and Sen. Jim DeMint of South Carolina making precisely that argument.
First, the proposed health care reform does not take over the system in any sense. Much to the chagrin of progressives, the bills under consideration don't contain a public option and don't provide for a single payer. In fact, they provide subsidies for millions of people to purchase private insurance.
Second... We're already halfway toward socialized medicine, but not because of Obamacare. ... Over the last couple of decades, as the private sector has done a miserable job controlling costs, as employers have felt less and less compelled to offer health care benefits as a condition of employment, as the population has aged, and as the government created new health care entitlements, the government has been slowly assuming a higher portion of health care spending in the United States—or "taking it over."
Check out Table 123 in the CDC's big annual report. In ... the 1990s, a period in which Republicans controlled the House for six years, the share of health spending controlled by the government rose by 10 percent. The trend continued in the period from 2000 to 2008, when Republicans controlled the White House and largely controlled Congress. ... In pretty much every year of the Bush administration, the government "took over" a greater chunk of the health care sector. And many of the Republicans who are complaining about reform proposals today didn't utter a peep. In fact, they helped the process along by voting for the Medicare prescription drug benefit in 2003. ...
CMS ... notes that thanks to these trends, public spending will soon outpace private spending... "As a result of more rapid growth in public spending, the public share of total health care spending is expected to rise from 47 percent in 2008, exceed 50 percent by 2012, and then reach nearly 52 percent by 2019."
So, to reiterate, we're already half way toward fully socialized medicine. The government has already taken over one-twelfth of the economy—and more every day. That's the status quo the opponents of reform are defending.

As noted above, "the proposed health care reform does not take over the system in any sense." But why would government run health care along the lines of successful models in other countries be a bad thing? Don't we want lower costs and better health outcomes?

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And shouldn't health care be available to everyone?:

Health Reform: If Not Now, When?, by Maxine Udall: Two recent encounters have gotten me thinking about health reform. The first was with my hair stylist—hardworking, talented, bright—who had a bad respiratory infection. She had just finished a 7-day course of antibiotics, but still had symptoms of a secondary bacterial sinus infection. Because she has no health insurance, she was thrilled that the antibiotics had only set her back $70. She was dismayed that she was still sick after a 7-day course of antibiotics. She was terrified that it might still land her in hospital. Another stylist at the same salon with the same symptoms had ended up in hospital with pneumonia. The other stylist also did not have health insurance.
The second encounter occurred a few days later when I gave a seminar at a university in another city. During the cab ride to the train station after the seminar, my 38 year old cab driver revealed that he had recently obtained health insurance for the first time in his life. He was thrilled, but also concerned that his new insurance was not comprehensive and most likely would not cover a serious illness or injury. ...
Many if not most hair stylists and cab drivers are essentially self-employed independent contractors who “rent” the place where they stand in a salon or the cab that they drive. They receive no health insurance benefits, no sick days, no retirement benefits. If they don’t work, they lose income. If they get really sick or injured, they lose everything.
...The inequalities in income distribution that have become greater in the US over the last 30 years are nothing compared to the growing inequalities that will result from an increasingly larger pool of Americans who lack adequate health insurance coverage. Each unforeseen, primary care-preventable illness, every serious injury will cause them and their families to fall further behind economically and in the quality of their lives. ...The Gini coefficient captures our growing income inequality. How do we capture the inequality induced by 30 million people and growing who have no health insurance?
More importantly, why, in a nation whose national narrative extols the virtues of entrepreneurship and individual effort, are young entreprenurs who choose jobs like hair styling or cab driving penalized for that choice? I personally know two hair stylists who started as independent contractors and worked their way to salon owner and employers of 10 to 20 stylists, manicurists, and estheticians. A major uninsured illness could have stopped them and the contributions they made to our economy dead. Literally. ...
Those who do not work for large companies, including small business owners, independent contractors, and the individuals they employ, are often unable to obtain health insurance either as employer-sponsored groups or as individuals in private markets. Yet these entrepreneurs are an important source of job creation and economic growth. Moreover, they represent the kinds of businesses we as a society should want to foster: embedded in their communities and therefore responsive to community demand and community welfare; small enough to fail and big enough to foster growth, employment, and innovation from the bottom up.
We in the US have been marginalizing the people who are the heart and soul of commercial enterprise, the small businesses and workers around which most of our communities used to be built. We are in effect segregating them based on employment status and health insurance cover. These are people who embody the values we say lie at the heart of our nation and our economic system: entrepreneurial, hard working, self-starters. By continuing to exclude them and their employees from affordable and adequate health insurance, we are in real danger of relegating them instead to a permanent underclass, a “servant” class that styles our hair, drives our cabs, cooks our food, cares for our children, and manicures our lawns. Until they get sick or have a car accident.
The divide is unsustainable. We cannot maintain economic growth and greatness with a growing proportion of US citizens excluded from one of the most basic requirements for the successful pursuit of life, liberty, and happiness. ...
Comprehensive, affordable health insurance must be made available to everyone. Every other developed country has done it. It does not get cheaper or easier to fix as time passes. We must do it now, in a form as close to optimal as can be achieved politically, and worry about the details later. It’s the right thing to do both economically and morally.
Just one note -- even those who work for large companies shouldn't rule out the possibility that their health care will end just when they need it the most.

    Posted by on Thursday, March 11, 2010 at 01:09 AM in Economics, Health Care, Politics | Permalink  Comments (38)


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