The Baucus Bill: A Backdoor Path to the Public Option

In a column last week for the Wall Street Journal, former Bush adviser Karl Rove suggested troubles ahead for health care legislation thanks to the Senate's Baucus Bill lacking what is termed a "public option". With the house bill including the latter, compromise might be difficult in such a way that substantial health care legislation could be imperiled.

Rove's thoughts are hard to discount given his skill at reading the political tea leaves. Still, it doesn't take a health care scholar to see that the Baucus Bill is merely a backdoor path toward a government managed public health care option.

That's the case because if passed, the Baucus Bill promises to erase profits for private health care providers. And with profits hard to foresee due to the Bill's mandates, it's fair to assume that the disappearance of health insurers will make it easier over the long-term for those in favor of a State option to foist it on a hapless electorate.

The reasons for this are basic. Under the Baucus Bill, private insurers will not be able to refuse health insurance for the existing unwell among us. This is the equivalent of requiring car insurers to pay for customers who miraculously see the value of being insured after their cars are totaled.

If applied to car insurance, there would be little incentive for drivers to buy insurance. Knowing they would be covered no matter how they drive and no matter how many accidents they cause, they would logically skip the monthly payments and wait to insure themselves until an accident makes being uninsured expensive.

The same will apply to health insurance. Not only will there be little incentive among Americans to take responsibility for their own health, they'll have an incentive to shun purchasing health insurance altogether knowing full well that federal mandates will enable them to buy health care on the relative cheap after the fact.

So while the Baucus Bill is trumpeted by its advocates as a measure that will increase the rate of insured in the United States, the opposite will likely occur. Thanks to the removal of expensive consequences that come with ignoring the purchase of insurance, the penny-wise in our midst will skip the costs of coverage until a serious illness makes buying it sensible.

For the responsible among us still foolish enough to pay for insurance, we'll see our premiums rise to the extent that existing insurers stay in the business. Forced to actuate for the influx of the irresponsible sick eager for a free ride, they'll raise the premiums for the responsible. Far from an insurance plan, we should be honest that this is a welfare program like any other.

Of course to help pay for what can only be described as a welfare plan, the Baucus Bill will tax what politicians term "Cadillac" health benefits, and they expect to raise $200 billion in doing so. No mention of whether the "Cadillac" health coverage politicians enjoy on the backs of their constituents will be similarly taxed.

Knowing full well that they won't, the Baucus Bill's supporters would have us believe that companies offering gold-plated health insurance are so dim as to continue to do so in order to be fleeced by the tax collectors for the welfare state. Good luck with that.

Instead, and as is always the case, when the tax code is used with blunt force to penalize anything, the end result is that what is taxed tends to vanish. To paraphrase Calvin Coolidge, high incomes frequently disappear when they're taxed, and this will be the certain result of legislation meant to target quality health plans.

So with gold-plated insurance set to somewhat disappear due to exorbitant tax rates, it won't be long before less-than-stellar health plans become quite impressive in the eyes of politicians. Seeking to bleed whatever is still around for revenues, politicians will go after the non-rich after their naïve plan to pay for healthcare on the backs of the productive goes awry.

The allegedly moderate supporters of the Baucus Bill make the stupendous claim that it is responsible and bipartisan for the "public option" not being included as part of the package. Their claims are empty, however, because any bill the premise of which is to turn healthcare into a "right" will on its face end up bankrupting the very companies that would provide the good in question were market forces in play.

The end result of the Baucus Bill's passage will be more people uninsured, and fewer private companies seeking to provide them with insurance. And with governments nothing if not experts when it comes to cynically exploiting crises of their own making, Washington will soon enough trot out a public option to fill the void left by insurance companies seeking real profits in other markets.

For a political party that is charitably adrift, the Republicans have so far been strong in opposing the health care plans offered up by the opposition. Here's hoping that rather than compromise, they match action with rhetoric about adhering to constitutional principles. The Baucus Bill is not only a backdoor path to federal health insurance, but it's blatantly unconstitutional.

Now's the time for the GOP to make a strong stand. There is absolutely nothing in the Constitution which allows for federal involvement in health care, but lots in there suggesting that as individuals the law protects us from thievery. The Baucus Bill is nothing more than theft, and politicians who care about protecting property rights should do everything possible to make sure it fails.