Why we’re “crazy” about health care choice

By Brian T. Schwartz and Linda Gorman

Sentinel Editor Dave Perry dismisses the Colorado Right to Health Care Choice Initiative as “crazy” and says its supporters “clearly have lost” their minds (Opinion, January 21).

The Initiative would prohibit Colorado government from requiring you to purchase health insurance.

Mr. Perry thinks that mandatory insurance is justified because “those without health insurance are driving up the cost of health care for every American.” But these added costs are trivial compared to the amount that mandatory insurance would increase premiums and taxes.

Read the rest of the article at PatientPowerNow.org:  Why we’re “crazy” about health care choice.

But unions and Congressional Democrats want to intensify the dose with a “pay or play” employer mandate. This would penalize employers for not buying medical insurance for their employees. This is not “reform;” it just entrenches flawed policies. It would violate rights, lower wages, and threaten jobs of minority single moms

Government’s favoring employer-sponsored insurance is the problem, not the solution. When your employer buys your insurance, it’s a non-taxable corporate expense. Employers save by “paying” you with insurance instead of higher wages.

This tax policy coddles insurance companies. They need only please your employer, not you. Most employers offer just one or two plans. Want more choices? If you prefer one of the many plans available at eHealthInsurance.com, you face a stiff tax penalty. Or try changing jobs. Insurers know you’re essentially stuck with your employer’s plan, so why should they please you?

Tax-discounted insurance has turned insurance into prepaid health care. If car insurance worked this way, it would cover predictable expenses like oil changes and replacement tires. You wouldn’t price compare or consider whether services were really necessary. Rather, you’d ask if “it’s covered.” Costs would soar. This has happened with medical care.

The tax bias for employer-sponsored insurance punishes those who incur medical conditions and then lose their job. A pre-existing condition can make them uninsurable.

This can create “job lock,” which stifles entrepreneurship. As Business Week describes: “fear of losing coverage keeps people at jobs .. . so many workers will keep hanging on to jobs they hate. … One single mom in New York, for example, is sticking with her graphic design job solely to retain the health coverage for herself and her son. … Her wish? To start a business doing bath and body products. ‘I feel stuck,’ she says.”

An employer mandate would further stifle entrepreneurs and destroy jobs. It would require a growing business to provide insurance when hiring its 10th or 20th employee. Since the additional employee would impose a huge cost, it might not hire anyone.

In response to an employer mandate, employers would shift this cost to employees by lowering wages. It’s worse for those with near-minimum wage jobs. These workers are “at substantial risk of unemployment if their employers were required to offer insurance,” write economists Katherine Baicker and Helen Levy. Employees “most harmed by mandated employer-paid healthcare are…more likely to be a minority, a single parent, and unmarried.” The employer mandate surely wouldn’t threaten union jobs, as unions support it.

An employer mandate would also violate our rights. Employers create jobs, and hence have the right to hire on terms mutually acceptable to both employer and employee. Politicians should not interfere with this private matter between consenting adults.

Tax-favored employer-sponsored insurance has created enough problems. Mandating it makes them worse. Politicians should not dictate whether you buy insurance directly from an insurer, through a membership group (like AAA), or through your employer. Legislators should both eliminate the tax exemption and decrease tax rates commensurately.

Second-best would be to make all medical insurance and expenses tax-exempt. This would remove tax bias toward excessive insurance coverage. Health Savings Accounts are a step in this direction, but they should be eligible to everyone, regardless of their insurance plan. Such “Large HSAs” would allow consumers to buy medical care and insurance with tax-free earnings.

Removing the tax code’s bias for employer-sponsored insurance can alleviate problems with job lock and pre-existing conditions. While some employers would offer insurance to attract employees, more people would buy policies directly from insurers when still healthy. Customers could choose — as many already do — a guaranteed-renewable policy, so the insurer cannot terminate coverage or raise premiums because you get sick.

The rigorous competition of a free insurance market could yield innovative products that protect against pre-existing conditions. For example, “health-status insurance” would pay for increases in your insurance premiums should your health status change, and you’d retain the freedom to buy a policy from insurers competing for your business. To learn more, look up “‘Health Status Insurance’ Provides Real Alternative to Universal Care.”

Mandating employer-sponsored insurance is wrong. It’s not a cure, but more of the disease: government’s bias for employer-provided insurance. This just benefits unions and politicians at our expense.

This was published in the Boulder Daily Camera on June 28 2009.

Consider Canadian medicine. The Canadian Medical Association reports that in one year, 71 patients died while awaiting heart surgery and over one hundred others became “medically unfit for surgery.” “Access to a waiting list is not access to healthcare,” wrote Canadian Chief Justice Beverley McLachlin in a decision that decriminalized non-government insurance.

Why expect single-payer to work? As a government insurance monopoly, it has little incentive to please captive customers. As Barack Obama has stated, “capitalism is great for consumers” when they have “many alternatives,” when customers, “not government bureaucrats … are the judges of what best serves their needs.” Single payer is the opposite of “many alternatives,” and it substitutes a bureaucrat’s judgment for your own.

Single-payer exacerbates problems with current insurance. Politicians coddle insurance companies by enforcing a tax code that favors employer-sponsored insurance. Insurers know that for you to buy a competitor’s product you must either change jobs or pay the full premium plus a tax penalty. Single-payer is worse. If you don’t like it, changing jobs won’t help. You must leave the state.

Even if the single-payer bill does not pass, proposing it could make an equally bad policy seem more “reasonable”: mandatory insurance. It’s law in Massachusetts, and it has gained traction in Colorado through the 208 Commission and Senate Bill 08-217.

Mandatory insurance is just single-payer in disguise. As with single-payer, politicians get to define what insurance is. Insurance companies are effectively government contractors for politically-defined insurance.

Mandatory insurance has been a disaster. Massachusetts authorities will “probably cut payments to doctors and hospitals” and “reduce choices for patients,” reports the Boston Globe. The wait to see primary care doctors “has grown to as long as 100 days.” As for insurance, government mandates “drive up costs, making coverage unaffordable.” Residents content with policies that authorities declare illegal “could face a hefty tax penalty.”

Government-controlled healthcare rests on the belief that health care is a right. It is not. Rights are freedoms of action, not entitlements to what others produce.

Instead of more government controls, Colorado should adopt free-market reforms. For example, Colorado House Bill 1256 would lift a ban that prohibits individuals from buying more affordable insurance sold in other states. Because of state-level mandates, a non-group family plan costs $5400 in Colorado, but only $3,000 in Wisconsin, reports America’s Health Insurance Plans.

Government controls drive up premium costs, subjecting many to Medicaid. Medicaid offers lousy care, fosters government dependency, increases insurance premiums, and devours the state budget. Would taxpayers voluntarily fund such an awful program? If politicians must force taxpayers to fund other people’s insurance, they should replace the Medicaid bureaucracy with a simple voucher – like food stamps, but for health insurance.

Such a voucher would be an improvement, but it would still unfairly compete with charities – as Medicaid does. Every tax dollar for Medicaid is one less dollar taxpayers could donate to charities such as Denver’s Inner City Health Center, Operation Walk Denver, or Rocky Mountain Youth Clinics. Donors should receive a tax credit taken directly from the state Medicaid fund. This would encourage Medicaid administrators to prove that their program is truly effective — just as charities must to earn donations.

Don’t believe politicians’ claims of “guaranteed” or “universal” healthcare. Politicians don’t “guarantee” your ability to buy milk at the grocery store, but you should worry about finding the milk if politicians interfere with free markets. Likewise, politically “guaranteed” health care would threaten our ability to get good care. The Legislature should remove crippling political controls of medicine, not expand them.

Voters should oppose Ballot Issue 1B, the “Worthy Cause” tax –no matter how worthy the causes are.  The sales tax for Boulder County non-profits is wrong and should end. It’s wrong for the taxpayers forced to “donate.” It’s wrong for a community that benefits from a marketplace of accountable and effective charities. And it’s wrong for the very people these organizations are supposed to help.

Giving to a charity can be virtuous.  It’s a form of self-expression that promotes your values. Donors can feel pride and integrity by taking action to support causes important to them.  But the Worthy Cause tax forces taxpayers to donate to charities — that other people choose.  There’s no virtue or compassion in taking someone’s money by force, even if you donate it to charity.  That’s the essence of Ballot Issue 1B.  If you don’t comply with authorities by donating to the charities they choose, you can end up behind bars.

Ballot Issue 1B is unfair.  Every dollar you’re forced to donate to politically-favored charities is one less dollar for other charities that must earn your donation.  Compare such voluntary fundraising with the political fundraising by “Citizens for a Worthy Cause,” who have spent thousands of dollars promoting Issue 1B so government can collect mandatory “donations.”  These aren’t “citizens,” but the very charities that have received or could receive the Worthy Cause tax revenue.  Just as we object when businesses use government to gain unfair advantage over their competitors, we should also object when non-profits do the same.

While we do not often think of charities competing in a marketplace, it’s essential for ensuring that non-profits are accountable. Donors want their donations put to good use.  There’s no such accountability when government officials choose which non-profits receive your money. The organizations get your money regardless of whether you think they’re doing a good job.  Hence the disengaged attitude of “I guess the government’s taking care of it.”  By empowering government, you disempower yourself.

Paraphrasing LendingTree, “when charities compete, we all win.”  Diligent donors use on-line resources like CharityNavigator or GuideStar, which evaluate charities’ performance.  GuideStar explains how we win:

donors seek out and compare charities, monitor their performances, and give with greater confidence; nonprofit organizations pursue more effective operating practices, embrace greater accountability, and enjoy lower fund-raising costs; and society benefits from a more efficient, generous and well-targeted allocation of resources to the nonprofit sector.

Supporters of the tax claim that the non-profits couldn’t raise the money without it.  But what if, instead of voting for 1B, the majority required to approve it donated their own money?

This year’s Boulder County Budget includes $3.5 million in the “Worthy Cause Fund.”   Assuming the same voter turnout as the 2004 election, 1B needs about 80,000 votes to pass.  That’s a $43 donation per “Yes” vote.  And it’s tax-deductible, so it’s more like $30.

Are we so two-faced in the voting booth?  Would a majority vote to force others to donate to charities that they wouldn’t support themselves?  Is that the Boulder County you want?

If you plan to vote for 1B, realize that it forces your neighbors to donate to charity.  Instead, donate your own money and encourage others to do the same.  I’ve made it easy: Go to www.wakalix.com and click on the “voluntary donations” link on the right side.  You’ll see a list of charities with links to their donation web pages.

Decide for yourself which causes are worthy, and donate your own dollars.  And remember, your neighbors’ dollars are not yours to give. Vote No on Ballot Issue 1B.

Update: The so-called “Citizens for a Worthy Cause” that support this are really the very organizations that receive the tax revenue.  See here.

Ballot Issue 1B: It’s not Your Penny to Give
by Brian T. Schwartz

Would you call the police on someone who didn’t donate to a charity that you consider to be a “worthy cause”?  If not, then you should oppose County Issue 1B in this November’s election, which would extend the so-called “Worthy Cause” sales tax.  This tax is immoral — regardless of how worthy the causes are. It is compulsory charity, or charity at gun-point. It is intolerant to people’s values and unfair to charities that must earn our donations. It undermines both the responsibility of donors and the accountability of non-profits that receive forced donations.

The compulsory charity tax represents the tyranny of the majority. Recipients of the tax revenues are politically-favored charitable organizations in Boulder County. Generous Boulder County residents can and do donate to these organizations. But in 2000, a half-percent majority of voters supported the measure, which makes it a crime for Boulder County consumers not to donate to these charities. You can end up in behind bars.

This is an offensive display of arrogance and intolerance. In 2000, almost 67,000 voters voted for the tax.  Apparently it’s not enough for these supporters to donate to charities they deem “worthy.”  They asked government to impose their values on everyone else, as if they are anointed to declare what the real “worthy causes” are.  But there’s no compassion in spending other people’s money by force.

Compulsory charity is unfair to non-profits who do not receive government subsidies. Every dollar you’re taxed to fund politically-favored charities is a dollar you could have given to a charity that actually earned your donation.  We appropriately disapprove when government legislates to give certain businesses advantage over competitors. We should also object to politically-favored government-subsidized charities.

Compulsory charity undermines your responsibility to promote your chosen values. Say you care about whether people receive adequate health care, housing, or education. The last thing you want is for government to address the issue. Government is unaccountable to you as a donor; it gets your tax dollars even if you think it’s squandering your tax dollars.  This lack of accountability gives government-funded charities little incentive to be efficient or effective.  By empowering government, you disempower yourself.

Compare this to donating to a charity yourself.  You’re the customer. Charities know that to keep your donations coming, they must demonstrate that they are a worthy cause. You can read the organization’s literature and website, talk to their employees, or read performance evaluations by Charity Navigator and GuideStar.org.

GuideStar envisions “an increasingly efficient nonprofit marketplace where donors seek out and compare charities, monitor their performances, and give with greater confidence; nonprofit organizations pursue more effective operating practices, embrace greater accountability, and enjoy lower fund-raising costs; and society benefits from a more efficient, generous and well-targeted allocation of resources to the nonprofit sector.”

Supporters of the “Worthy Cause” tax claim that without it, worthy causes would not have sufficient funds.  But the alternative to the compulsory charity tax is not “doing nothing.”  The alternative is to take responsibility for supporting your values by donating money yourself and persuading others to donate.

Remember the 67,000 voters who originally supported the tax?  If they thought these causes are so important, they should put their money where their vote is.  This year’s Boulder County budget includes $3.5 million in the “Worthy Cause Fund.”  Instead of voting to force their neighbors to donate to charity, a $50 tax-deductible donation would provide this revenue.

Another common argument in support of compulsory charity is that “we all benefit from it.” But do we?  The poor also pay the sales tax, but could benefit more by using their hard-earned money to provide for their families.  That $3.5 million can create other values, either through other charities or businesses that create jobs.

In any case, just because you benefit from something does not mean you must pay for it.  We benefit if others have food, shelter, clothing, and good hygiene, but this doesn’t mean government should force us to buy food, shelter, clothing, and soap for others.

Some claim that these are necessities of life are “rights.”  They are not. Rights are freedoms of action, not entitlements to what others produce.

The “Worthy Cause” tax empowers authorities to decide for others what causes are more “worthy” than others.  This is an elitist and intolerant, and has no place in a civil society.  Ballot Issue 1B isn’t about “a penny for a worthy cause,” it’s about compulsory charity.  If you want to donate your own penny, that’s great.  But your neighbors’ pennies are not yours to give.

The budget: An “immoral document”

This Web only Speakout has not been edited.
Brian T. Schwartz
Sunday, April 6, 2008

A “moral document.” This is what Colorado House Democrats called their budget (“State budget clears House,” March 27), which expands government-run children’s health insurance. This moral grandstanding is typical of the anointed, who support expanding Medicaid and the State Children’s Health Insurance Program (SCHIP) — and it’s nonsense. There’s no compassion or virtue in spending other people’s money taken by force.

If a thug forces you to donate to charity, does that make either you or the thug virtuous or compassionate? What if this charity unfairly competes with voluntary charities, fosters dependency of recipients, encourages people to stop buying private insurance, and is run by a government that makes insurance expensive in the first place? All of these apply to Medicaid and SCHIP, which are government-run charities.

Advocating for government-run charities doesn’t make one compassionate, as there’s no compassion in forcing others to comply with another’s notion of virtue. Unlike voluntary charities, not “donating” to a government charity through taxes lands you in prison.

Compulsory donations to government charities are unfair to voluntary charities. Every dollar the state extorts from taxpayers for SCHIP or Medicaid is one less dollar for a voluntary charity.

Forced giving is also disrespectful and intolerant. By forcing us to fund causes others think are important, it thwarts our freedom of expression and ability to support causes we judge to be worthwhile.

Unlike government charities, voluntary charities have strong incentives to be effective. Since they compete with other charities for donations, they must convince potential donors that their cause is worthwhile. Government charities need not persuade.

We know the cost of not “donating”: prison.

If each Colorado adult funded Medicaid and SCHIP equally, we’d each pay almost $1000 per year.¹ If you had $1000 to donate to a medical charity, which would you choose? Would you choose SCHIP, or a voluntary charity like Rocky Mountain Youth Clinics, which provides primary care to infants, kids, and teens?

Might SCHIP or Medicaid deserve your donations? Downloading Cato Institute studies “Sinking SCHIP” and “Medicaid’s Unseen Costs” could provide guidance.² SCHIP covers non-needy families: more than half of eligible children already have private insurance. The National Bureau of Economic Research reports that “For every 100 children who are enrolled in public insurance, 60 children lose private insurance.”

Both Medicaid and SCHIP ensnare recipients in a low-wage trap: aversion to seeking higher-paying jobs for fear of losing “benefits.” This keeps people on their backs and dependent on government, instead of being independent and self-sufficient. As “entitlement” programs, they send adults the message that they are entitled to have children — even if they cannot afford to raise them.

Too bad you have no choice; it’s your hard-earned income after all. But government could provide such choice — by allowing its programs to compete more fairly with voluntary charities. One method is a dollar-for-dollar tax credit for donations to non-government charities that assist families with the medical and insurance expenses.

Taxpayers who prefer Medicaid and SCHIP to non-government charities can continue to fund them. The threat of lost tax revenue would give Medicaid and SCHIP strong incentive to effectively and efficiently assist families in need and foster their independence.

Empowering taxpayers to choose allows for true compassion, which is absent when we are forced to give. Taxpayers could compare non-profits with tools like Charity Navigator and GuideStar.org. GuideStar envisions “an increasingly efficient nonprofit marketplace where donors seek out and compare charities, monitor their performances, and give with greater confidence; nonprofit organizations pursue more effective operating practices, embrace greater accountability, and enjoy lower fund-raising costs; and society benefits from a more efficient, generous and well-targeted allocation of resources to the nonprofit sector.”

So drop the “you’re a bad person for opposing government charity” rhetoric and rise to this challenge: If Medicaid and SCHIP are so good, why not let them compete fairly with other charities, and let individual taxpayers decide for themselves?

Brian T. Schwartz, Ph.D., submitted the free-market proposal to the Blue Ribbon Commission on Healthcare Reform.

¹ StateHealthFacts.org, State Medicaid Fact Sheet, Colorado, 2005-2006 data, Kaiser Family Foundation. [html, pdf]

² My article Medicaid is Hazardous to Your Health summarizes “Medicaid’s Unseen Costs.”

What good is having medical insurance if you cannot get medical care? Peddlers of “universal health care” — from Hillary, Obama, to Colorado congressional candidate Jared Polis — don’t get this.

“Universal health care” is false advertising for politically-controlled medicine, with government as the “single-payer” monopolistic insurer. But having coverage does not guarantee getting medical care.

Since patients prepay through taxes, medical care appears “free.” Hence, they have strong incentive to over-consume and providers need not compete on price. To contain costs, governments restrict your access to life-saving treatment. In countries with such “universal coverage,” patients die waiting for treatment.

The Canadian Medical Association Journal reports that in one year, 71 Ontario patients died while waiting for coronary bypass surgery and over one hundred more became “medically unfit for surgery.” The Canadian Broadcasting Corporation reports that “109 people had a heart attack or suffered heart failure while on the waiting list. Fifty of those patients died.”

This week the Globe and Mail reported that

Inside Sylvia de Vries lurked an enormous tumour and fluid totalling 18 kilograms. But not even that massive weight gain and a diagnosis of ovarian cancer could assure her timely treatment in Canada.

She sought treatment in the United States, as do Canadians in need of intensive care and emergency cardiac care.

“Physicians across Canada are in an advanced stage of burnout due to work conditions” which “causes them to retire early…or simply leave,” a former Canadian Medical Association president told the New York Times. He “attributed much of the problem to technological shortages and the powerlessness doctors feel when patients complain about long waits for treatment.”

“Access to a waiting list is not access to healthcare,” wrote Canadian Chief Justice McLachlin when striking down legislation banning private insurance in 2005. Last year a New York Times headline read: “As Canada‘s Slow-Motion Public Health System Falters, Private Medical Care Is Surging.”

And England? The BBC reports that “up to 500 heart patients die each year while they wait for potentially life-saving surgery.” The Times reports that a British woman “will be denied free National Health Service treatment for breast cancer if she seeks to improve her chances by paying privately for an additional drug.” A Daily Telegraph headline reads: “Sufferers pull out teeth due to lack of dentists.” “Doctors are calling for NHS treatment to be withheld from patients who are too old or who lead unhealthy lives,” reports another article.

Consider politically-controlled health care in America: Medicaid and Medicare. Doctors are five times more likely to refuse seeing new Medicaid patients than privately-insured patients. Increasing reimbursement rates won’t help much; more than two-thirds of doctors reported being overwhelmed by Medicaid’s billing requirements, paperwork, and delays in payment.

ABC News reports that “Medicare rules bar cancer drugs for patients,” including the privately-insured. As the population ages and Medicare costs continue to increase, Medicare may further restrict patients and doctors.

“Single payer” advocates cite international comparisons of life expectancy to support their cause. But life expectancy depends on factors unrelated to healthcare, such as unintentional injury and homicide. Health economist Robert Ohsfeldt found that when accounting for these two factors, life expectancy in America is comparable to that of Canada and England.

What really matters is your chance of surviving a serious illness. The American Cancer Society reported that “U.S. patients have better survival rates than European patients for most types of cancer.”

So if politically-controlled medicine isn’t the solution, what is?

Not a Massachusetts-style “individual mandate,” which forces everyone to buy insurance. This is essentially single-payer in disguise. Insurance regulations severely limit competition, so insurance companies are effectively government contractors for politically-defined insurance.

The Boston Globe reports that to contain costs, Massachusetts authorities will “probably cut payments to doctors and hospitals” and “reduce choices for patients.” Sound familiar?

Instead, we must recognize how government policies have crippled free markets.

Because the tax code deeply discounts employer-provided insurance, you’re essentially stuck with your employer’s non-portable plans. Hence, insurance companies can afford to be stingy and deny you care; they know that losing you as a customer requires that you change jobs. With government as “single-payer” it’s even worse: to change insurance providers you must move to a different state or country.

Our current system also encourages thoughtless over-consumption and skyrocketing costs. The tax code punishes paying for medical care out-of-pocket and rewards buying insurance. So “insurance” has become prepaid medicine, and patients over-consume like business travelers dining on their company’s expense account.

Further, legislation mandating minimum benefits makes insurance unaffordable for many. Consider: Colorado law compels widowed wives to pay higher premiums for prostate screening, maternity, and marital therapy. Sponsors of Colorado House Bill 08-1327 recognize this injustice. Just as businesses incorporated in other states can operate in Colorado, Coloradans should be able to buy affordable policies from insurance companies that meet less damaging regulations of another state.

So remember, the uninsured aren’t the problem, but a symptom of political meddling in our most important personal choices.

Jared Polis is a Democrat running for U.S. Congress representing Colorado’s 2nd District. In a Speakout in Wednesday’s Rocky Mountain News, he writes:

First, let us not delude ourselves into thinking that we have anything close to a “free market” in health care. A free market would allow the uninsured to die on the hospital doorstep rather than provide them treatment they cannot pay for. Having made a moral decision not to allow people in our great country to die in this fashion, let us discuss how to more efficiently provide for sensible universal health care.

Well, at least Polis recognizes that we do not have a free market in health care. Why he chooses to use scare quotes is beyond me, and makes me wonder what he really means. The government interference in the free market he’s addressing is EMTALA, the Emergency Medical Treatment and Active Labor Act. As its Wikipedia entry (linked above) summarizes, this law forbids hospital emergency departments from denying care to anyone with an emergency medical condition.

Apparently, Jared Polis thinks that without such a law, this would happen routinely, and the uninsured would “die on the hospital doorstep.” Since EMTALA was passed in 1986, I welcome Jared to present the evidence that this legislation has decreased the number of such undesirable occurrences.

In any case, it is not hard to imagine that our community would provide such care even if a politician’s law didn’t compel us to do so. It’s not hard to imagine, because people do it. Consider the Shriners Hospitals for Children. According to Charity Navigator, their total revenue exceeed $640 million in 2005. In Colorado, private philanthropy accounted for almost $200 million in medical care for the uninsured. (See slide 20 here.)

The above examples do not address emergency situations, but it’s difficult to imagine that people in our society would voluntarily donate money to provide medical care for the uninsured in non-emergency situations, but not in emergency situations. Jared Polis, can you shed some light on this?

According to Jared Polis, a law is required compel doctors to treat the uninsured in emergency situations. Is Polis saying that doctors are so heartless and cruel that they would not treat someone for free? Is he saying that the electorate as too callous to fund charities to pay such that doctors could treat the uninsured in emergency situations?

Apparently, the answer is “yes.” Polis writes that we have “made a moral decision not to allow people in our great country to die in this fashion.” Not quite. Moral decisions are a matter of choice, not a threat. EMTALA threatens doctors with penalties up to $50,000 for not complying.

So Jared Polis thinks that the citizens of Colorado and Colorado’s physicians must be forced to do the right thing, since they lack the moral fiber to do it themselves. And yet, Jared Polis seeks public office, to represent us, the very people he doesn’t trust to do the right thing. So if the (apparently immoral) citizens of Colorado’s 2nd District elect Mr. Polis, how can we trust him to do the right thing?

Government-run auto repair? Yes!

Modeled in health-care debacle, some could clean up

By Brian Schwartz

Sunday, February 11, 2007

“Government-run health care, that’s the model for how to monopolize the auto repair industry.” The men in fedoras looked doubtful. “Continue,” said the driver through cigar smoke. I had no choice, but, now safely in hiding, I divulge this diabolical plan.

The federal and state governments are intent on monopolizing health care. Emulate their path. First, pass legislation to satiate voting blocks dissatisfied with their auto-repair costs and service. Since such disruptions of free trade inevitably exacerbate existing problems and create new ones, they provide a rationale to push more legislation marketed to “fix” them. Repeating this cycle will insidiously cripple a once-competitive market; voters will demand a complete government take-over, even though government created the crisis in the first place. Here`s the scheme:

Make employer-paid auto insurance premiums tax-deductible — just like health insurance. Consider an employee paying an annual $1,000 premium. His federal, state, and local income taxes exceed 45 percent. With employer-paid premiums, he gets the same coverage — while saving $450 on taxes. Such a discount will be popular, and drivers will start demanding legislation to fix problems arising from changing jobs. For you, boss, that means more jobs for your cronies.

Today, auto-insurance premiums are low, while claims are large but rare. Not for long. Why pay car-related expenses out-of-pocket when they can save 45 percent if their insurance covers it? Drivers will demand low-deductible, high-premium policies covering everything from scheduled inspections, oil changes and tire rotations. Insulated from true costs, they will splurge on seemingly “free” services, which will make repair and insurance costs skyrocket.

Consider health care, Godfather. The National Center for Policy Analysis reports that patients pay only 14 percent of costs out-of-pocket. Paraphrasing economist Arnold Kling, this is cost-insulation, not insurance. Between 1992 and 2005, medical-service prices increased by 77 percent while the Consumer Price Index rose only 39 percent. The cost of cosmetic surgery, an uninsured medical procedure, increased only 22 percent despite booming demand. And yet, the RAND Health Insurance Experiment concluded that low deductibles increases consumers` spending, but not their health.

Increased costs will leave many drivers unable to afford automobile insurance. To “alleviate” this crisis, introduce two new government products: Autocare for older car owners and Autocaid for low-income drivers. This will also draw more customers.

Consider medicine. The USA Today reports that “many workers choose Medicaid over insurance offered by their employers because it is less expensive.” Why wouldn’t they? The National Bureau for Economic Research found that Medicaid increases prescription-drug prices for non-customers by 13 percent. Autocare and Autocaid will surely advance government`s hijacking of the auto-repair industry.

On the state level, be sure to have your boys mandate that all insurance policies cover routine maintenance and that all cars are as safe as a Lexus. Sure, costs will explode and thousands will lack transportation, but it satisfies special interest groups, gets votes and jobs for your gang, and allows you to demonize the opposition as “anti-safety.”

Also remember the wonderful combination of “guaranteed issue” and community rating. The first guarantees that a teen driving a muscle car can buy insurance — from the scene of his accident! Community rating ensures that he`ll pay the same premium as a soccer mom for her minivan. This will come at a price of course — no more “futile” repairs for those selfish sentimental drivers who want to keep their grandparents` old car alive.

To see the potential of this, again consider health care. The Council for Affordable Health Insurance estimates that “mandated benefits currently increase the cost of basic health coverage from a little less than 20 percent to more than 50 percent.” Chris Conover of Duke University estimates that health-care industry mandates costs each household $1,500 — with dubious benefits — and is responsible for one-sixth of the daily uninsured. More customers for the government!

Now that government is paying the piper, you can force “car doctors” to play your tune. Red tape will strangle their exercise of car-healing wisdom and expertise; draining joy from their careers and driving them to other professions. Look at Canada`s allegedly ideal system. According to Dr. Sunil V. Patel, former president of the Canadian Medical Association, “physicians across Canada are in an advanced stage of burnout due to work conditions” which “causes them to retire early or pull away from certain kinds of work or simply leave.” The New York Times reported that Patel “attributed much of the problem to technological shortages and the powerlessness doctors feel when patients complain about long waits for treatment.” Long waits indeed.

The Fraser Institute found that Canadians wait over 17 weeks for treatment after a general practitioner’s referral. Brian Day, CMA’s current president, says that “dogs can get a hip replacement in under a week,” while “humans can wait two to three years.” Aim high, boss. Aim high.

That’s it, fellas. Tax exceptions, compulsory charities, and crippling rules — new ones pitched as solutions to problems caused by previous ones. Each increases government’s market share at the expense of individual freedom.

Standing on the sidewalk, I saw the unmarked car speed toward the Capitol building.

Brian Schwartz is an optical engineer in Boulder, where he also studies free-market economics and enjoys improv comedy and softball.

© 2006 Daily Camera and Boulder Publishing, LLC.