Critique of the Obama Healthcare Plan

Healthcare has been a major topic of discussion in the news lately. Both former Republican presidential candidate John McCain and now President Barack Obama made healthcare a major part of their platform during their campaigns for the office of president. Now that President Obama has assumed office, he has begun a push for his version of health care reform.

I am personally not at all opposed to healthcare reform; on the contrary, I believe that our current healthcare system needs substantial reform. However, I do not support the reform being pushed by President Obama and his congressional allies. The reforms they are proposing would in a substantial increase to the costs of healthcare, and a reduction in the quality of care. There is no doubt that if President Obama and his allies succeed in passing their version of healthcare reform, it will plunge us further into recession by increasing the federal budget's annual outlays by over one trillion dollars. Of course, this means that there will be tax increases to cover the additional outlays. In fiscal year 2007² (which began on October 1, 2006 and ended September 30, 2007), federal income was about $2.568 trillion, and outlays were $2.730 trillion. Thus, about $0.162 trillion ($162 billion) was added to our growing federal deficit.

During fiscal year 2007, about 43% of the federal government's income came from personal income taxes. Another 32% came from Social Security, Medicare, unemployment, and other retirement taxes. 6% was borrowed in order to cover the deficit.

About 38% of the outlays for Fiscal Year 2007 went to Social Security, Medicare and other retirement programs. Social programs, such as unemployment, Medicaid, and other health-related programs, accounted for another 19% of the federal outlays. For this reason, some people have noted that there is no need for the government to create a new healthcare program; perhaps it should just expand its existing healthcare programs. I don't know of anyone who actually believes this to be an option. Recently, I was reading a book¹, in which the authors asked the question, "Which program is likely to be bankrupt first: Social Security and Medicare?" Like I'm sure many people do, I guessed that the answer is Social Security. After all, we often hear on the news that Social Security is about to have major problems in the near future due to increasing retirement. However, the correct answer is Medicare. For those who might not know, Medicare is a government option for health care coverage the government currently offers to senior citizens. Medicaid is another similar program. According to that book, Medicare will probably be bankrupt by 2020, if things continue as they are now. I have heard that there is talk about increasing the Medicare tax from 2.9% to 3.9% of wages earned. Such an increase would likely help the program buy additional time, but it would not solve the problem altogether.

I did not realize until recently how bad the Medicare program is. During a person's working years, the government requires 1.45% of his wages to be withheld from his paycheck, and then remitted with an additional 1.45% that must be paid by his employer. Thus, the government charges 2.9% of all wages earned by all taxpayers to fund the Medicare program. However, guess what happens when a taxpayer retires, and begins to be covered by the Medicare program? He or she has to pay monthly premiums! Can you believe it!? For several decades, you have been paying thousands of dollars every year for an insurance program you were not eligible for. Then, when you do become eligible, you have to pay monthly premiums for coverage. And, the worst part is that the program still doesn't make any money! That is one miserable record!

But, forget all that. Now, the government doesn't want to "limit" itself to covering retirees. It wants to cover all citizens, and even some non-citizens as well, for good measure. You see, Senator Joe Wilson was correct; President Obama was lying to Congress when he claimed that his health plan would not cover any residents who have illegally immigrated. It most certainly will. Of course, it is rare for them to pay any taxes, so the government will be passing the cost on to its true citizens. Thank you, Mr. President!

There is no truthful way to get around the fact that the healthcare plan being proposed by President Obama would far exceed the current costs of healthcare. It has been said that the cost would be at least $10 trillion over the next 10 years, thus averaging out to about $1 trillion per year of additional outlays. So far as I know, the health care plan President Obama proposes would begin relatively small, and increase gradually over a period of several years, so the cost will likely far exceed $1 trillion by the end of the ten year period. (The Congressional Budget office usually calculates the cost of a bill over a ten year period.) If the cost was $1 trillion each year for ten years, and the current population of 300 million was maintained , the average cost per person would be about $3,300.00. I don't know who keeps saying that this healthcare plan would cost less than our current health insurance plans, but he sure hasn't done the math. I don't think anyone pays anywhere close to $3.300.00 per person per year for healthcare. And by the end of the 10 years, the cost will far exceed even that. After all, the bill isn't even fully written yet. Congress needs to add a few more costs; isn't still a little too cheap!

I fully understand that very few people will be paying anywhere close to $3,300.00 per person. Like the rest of our modern tax system, the "evil rich" will bear most of the cost of this healthcare. That is, if they don't get sick of the tax increases, and move to another country with lower taxes. We will eventually reach a breaking point.

I have other problems with the healthcare reform being proposed by President Obama. It would require all doctors to perform abortions, if requested by a patient. Many doctors consider this to be in violation of the Hippocratic oath, and rightly so. Many doctors correctly consider the little baby to be their patient as well. I will save further elaboration on the subject for a future article.

I don't think anyone denies that healthcare reform is necessary; the dispute is over what type of healthcare reform is necessary. I oppose the government option for the reasons given above. But, as stated earlier, I do support healthcare reform.

Currently, state insurance boards control what insurance plans can be offered in to residents of their state, and what plans cannot. Often, these boards require the plans to offer coverage for certain procedures that few citizens need. I support allowing citizens to choose a plan that suits their needs, without the government mandating plan minimums. I support free market options: Allowing taxpayers to choose any insurance plan from any company that fits their budget, without any mandated minimums from the state insurance board. I also support the efforts being made to decrease dependency on "group" discounts. Currently, many people are uninsured because they are not eligible for group discounts through their employer. For example, very few of our nation's self employed citizens have health insurance. They are not eligible for the group discounts that employed citizens receive through their employers. They also often earn less income.

Recently, high deductible health plans (HDHPs) have become popular. These plans often have health savings accounts (HSAs) attached. Here is how the plan works: A health savings account is set up in the name of the insurance plan purchaser, and then funded with pre-tax dollars. Once the annual deductible is paid, the insurance company will pay any additional costs. Thus, the insurance plan rarely covers everyday doctor visits, or other regular health care costs. It becomes more like a catastrophic plan.

The biggest benefit of health savings accounts is that nearly all medical expenses that can be deducted can be paid from the account using pre-tax dollars. Normally, only the medical expenses that exceed 7.5% of your income can be deducted on your tax return. Thus, it represents a huge tax savings. In addition, because the insurance company covers less of your healthcare, it offers lower insurance rates.

If the cost of insurance decreases, the number of people insured will increase naturally. No, I do not expect it to reach 100%, no matter what reform occurs. I believe that if more people take advantage of high deductible health plans and health savings accounts, they will be able to secure adequate health insurance at a substantially reduced cost. I believe that if President Obama and congressional Democrats succeed in passing their version of health care reform, the end result will be a decrease in the percentage of insured Americans. The tax increases will cause a reduction in spendable income, and fewer Americans will be able to afford the increased cost of coverage.

Want to oppose the Obama healthcare reform? There are many ways to do it. One of the best is to send a message to your members of Congress, either by e-mail, phone, or both. I have found the website www.congress.org to be very helpful in this regard. I have also signed several petitions, one of which I know was delivered to Congress several weeks ago. More than 1.34 million people had signed it! The 55,000 page petition was delivered by ambulance on Wednesday, September 9, 2009, at 1:30 p.m. to Capital Hill for a 2:00 p.m. press conference. I have signed other petitions as well, that will be delivered to Congress later, if they have not been already. The most important things is that we remind Congress that the 2010 elections will be here very quickly, and that we, the American people, do not want the government to take over the healthcare industry. Should they insist in passing it, they need to know that we are not few in number. The majority of American's oppose "Obamacare".

I also recommend that you look at the charts that are being produced, to show how healthcare would function under Obama's plan³. It is not simple, to say the least. They were definitely eye openers to me.

Let's not give tacit consent⁴ to President Obama's plans for our healthcare. To prevent him from succeeding, we all need to let our voices be heard in Congress. By uniting together, we can succeed.

Credits:

^{1 N. Boortz and J. Linder, The Fair Tax Book (2005, Regan Books)}

^{2 The fiscal year 2007 data used in this article was obtained from the IRS Form 1040 Instructions Booklet for tax year 2008, page 91}

^{3 http://theconservativepost.com/WordPress/wp-content/uploads/2009/07/house-democrats-health-plan-1024x791.jpg
https://secure.conservativedonations.com/ameripac_chart/images/chart.pdf}

^{4 Tacit consent: To give concent by silence, and by failing to voice opposition}