Translating ObamaCare Into Plain English

Story Stream
recent articles

Forget for a moment whether you believe healthcare is an inalienable right like freedom of speech or a service one purchases like auto repair. Do you prefer honestly debating the issue or hiding behind Orwellian doublespeak?

Do you support open and transparent deliberation or do you believe that "change" justifies the use of misinformation, intimidation, and obfuscation?

Are you thinking through the likely consequences of the detailed healthcare "reforms" being proposed or are you more invested in making sure that your tribe - be it Red or Blue - "wins" this particular legislative fight?

Do the questions above matter or is your remedy for one screwed up presidency piling on another one?
How happy were you when our last President bamboozled the country into a hasty war in search of non-existent "weapons of mass destruction?" Were you shocked that he had no plan to secure the peace after achieving military victory? Once entangled, were you surprised that it took years of blood and treasure to set things right?

Then why are you comfortable watching this President stampede the country into the remodeling of 18% of our economy in search of non-existent "savings" that cannot possibly come from expanding the menu of government entitlements? Will you feign surprise when it becomes undeniable that Congress has no idea how to pay for the new benefits being proposed?

Don't get me wrong. Maybe a majority of Americans really do want every citizen to be taken care of according to his needs while "the rich" are forced to pick up the tab according to their ability. Many other countries work that way, although the definition of "rich" has a way of expanding as quickly as the entitlements. And maybe we do want wise central planners telling our doctors how to treat us. But before we enshrine this into law, doesn't it make sense to have an honest debate?

Here is how my dictionary defines "insurance."

Insurance - coverage by a contract binding a party to indemnify another against specified loss in return for premiums paid.

Compare this to the definition of the word "welfare."

Welfare - financial or other assistance to an individual or family from a city, state, or national government.

As Congress attempts to remake the healthcare industry, which are we talking about - insurance or welfare?

Health insurance - like fire insurance and life insurance - is a financial product sold by underwriters who offer a menu of services with prices based on an actuarial analysis of risk. The average premium paid for coverage has to be higher than the average payout for covered services or else the underwriter goes broke. Health insurance does not magically deliver "free benefits." Even if coverage comes through your employer, the premiums paid could have otherwise gone into your paycheck. Plans vary from high deductible coverage of only the most severe catastrophes to gold plated reimbursement for every sneeze and sniffle. Medical services are not "rationed" by insurance companies, they are contractually provided as specified in the product you or your employer buys. Some employers buy fancy plans and others cheap out depending on what kind of employees they need to attract.

Welfare is the ultimate in "free benefits." It is run on a pay-as-you-go basis. Plans are structured by community activists, not actuaries. Payouts are usually based on need, although middle class welfare programs are often the most expensive. Of course welfare has to be rationed because there is no price mechanism to balance supply and demand, no need to generate profits, and the provider can't go out of business - although California is testing that proposition. Rationing has nothing to do with what recipients "deserve," it comes from the fact that government treasuries are not infinite.

Once we agree to speak plain English, is it so disastrous to take the time to carefully consider what we're getting into? Do we really want Congress to pass a 1,000 page trillion dollar medical welfare bill that guarantees every American free healthcare regardless of their ability to pay? Are we willing to let recession-battered Federal and State governments go deeper into debt to support this? Are we ready to turn most doctors into civil servants so we can set their salaries? And are we prepared to raise everyone's taxes a little bit today and a lot tomorrow to pay for it all?

If you are a current recipient of medical welfare - namely Medicare or Medicaid - are you willing to share your benefits by having a fixed amount of services spread over an additional 45 million people? Please don't pretend that Medicare is not welfare, we agreed to speak English. If Medicare were really "insurance" with premiums set by actuaries, then why do both tribes agree it is destined for bankruptcy? You say it's because the nation is aging? Insurance companies don't go broke when their customer base grows, they make more money. And if national aging is the cause of Medicare's ultimate bankruptcy, how are things going to be improved by adding another 45 million people to the rolls who can't even afford bare-bones insurance?

Telling the truth is fundamental to running a democracy. Calling things what they are is integral to telling the truth. We'd better get started if we hope to pass policies that don't themselves need to be "reformed" before the ink is dry.

Bill Frezza is a fellow at the Competitive Enterprise Institute, and a Boston-based venture capitalist. You can find all of his columns, TV, and radio interviews here.  If you would like to have his weekly columns delivered to you by e-mail, click here or follow him on Twitter @BillFrezza.

Show commentsHide Comments

Related Articles