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Obama Tries Again – And Fails

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Posted on September 9 2009 10:11 pm

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President Obama delivered his highly anticipated prime-time speech on his health care plan with all the pomp and ceremony of a State of the Union address. It took 50 minutes or so and did little to advance his cause, although I expect he will receive a small temporary bounce in the polls.

Obama began his speech with undeserved self-congratulation for supposedly bringing the country’s economy back from the “brink.”  If a 9.7%-and-rising unemployment rate, along with tripling the deficit, count in his mind as a rescue, then there is even less reason to have any confidence in what he said about the need for government to rescue the nation’s health care services.

When the president started talking about his proposals to reform the health insurance industry, I began to have some hope that maybe he had listened at least a little to what really concerns the American people.  Insurance companies should be required to clean up their act.   For example, they should be prohibited from denying coverage to someone because of a pre-existing condition or dropping someone who has been paying premiums as soon as he or she runs into serious medical problems.  Arbitrary caps on coverage should also be eliminated.

But then Obama took a left turn and went off the rails.  He insisted that his plan could cover everyone without raising the deficit by even “a dime.”  Just eliminate the waste and inefficiencies in Medicare and Medicaid, he said.  That begs the obvious question: If finding and eliminating waste and inefficiency in these government run programs were so easy, why wasn’t it done already?  And with all the overruns in virtually every government program including Medicare and Medicaid, why should we trust his assurance that his plan will cost “only” $900 billion over ten years?

Obama still insists that a public option, or some variant of it, is needed to give the private insurance companies a dose of competition, but he did not explain how the maker and arbiter of the rules that govern the field of play can compete fairly with the entities subject to those rules.  

The president also insisted that any public option would be self-sustaining from the premiums paid into the public insurance plan.  But by his own estimates, only 5% of eligible insured are likely to pick the plan — which does not create much of a pool of money with which to remain self-supporting.  And what Obama failed to point out is that this 5% is likely to consist disproportionately of persons with substantial medical needs that will drain what ends up in that pool.  What will inevitably happen is another expensive taxpayer-funded bailout that will enlarge the deficit even more.  When that gets too unwieldy to handle, Obama and the liberals running Congress will blame it all on the greedy inusrance industry and drive forward their preferred single-payer solution of the kind that has performed so miserably in Canada and the United Kingdom. 

Instead, the president should rally around true competition by pressing for removal of artificial barriers to competition among insurance companies across state lines.  That will add free-market choices to the new insurance exchanges that he wants to set up for individuals and small businesses to find affordable alternatives.

Fees will be imposed under Obama’s plan on anyone not willing to purchase an insurance policy — contrary to Obama’s promise during the campaign not to mandate coverage for everyone with what amounts to a hidden tax on the middle class.  Obama claims that this is necessary to prevent the insured who have been paying premiums from having to subsidize the uninsureds’ visits to the emergency room.

But here’s the rub. Illegal aliens are the ones imposing a good chunk of those costs on the rest of us.  And while saying that his plan will not subsidize illegal aliens,  Obama has said that he supports the right of illegal aliens to seek medical help in emergency rooms!  And just because the federal government would not be paying direct subsidies to illegal aliens in order for them to purchase their own health insurance policies does not mean that they cannot slip into the cheap public option without detection, just as they have done in order to obtain jobs and drivers’ licenses.

The end of President Obama’s speech was pure emotion, as he invoked Ted Kennedy‘s memory and appealed to an “it takes a village” spirit in support of passage of his plan.  He would do better if he focused on reasonable reform proposals that will not break the bank and propel us further down the slippery slope toward fully socialized medicine.

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