Errors of Enchantment

Rio Grande Foundation economists Brown and Gisser recently wrote an op-ed arguing that McCain's health care plan is superior to Obama's. That drew a swift response from a supporter of Obama who argued that McCain couldn't get health care under his own plan.

To sum up the author's arguments:

The real problem with the American health-care system is that it has become an industry designed primarily to profit the corporations who provide the "health-care" product. Some aspects of life are more important than profit — family, community and education, for example. Other aspects of life are actually necessities, health care being among them, and when it comes to necessities, profit has no place in the picture at all. Health care should be treated as a public service, not a for-profit business.

While it is certainly up for debate whether McCain has the plan we need to solve our health care problems, the idea that education and health care are "above profit" illustrates the basic ignorance of this argument. The fact is that in a world of scarce resources, the most efficient way to allocate them is through the profit motive. Under socialism, resources are simply allocated by the government, thus resulting in political allocation and greater scarcity (due to the lack of a profit motive).

Making a profit off of someone's misfortune or illness may sound like a dishonorable way to make a living, but this is what doctors do. It is also the best way to make people well.

Posted by Paul Gessing at 04:40 PM | Permalink | Comments (0) | TrackBacks (0)

Recently, two Rio Grande Foundation economists, Ken Brown and Micha Gisser, had a column in the Albuquerque Journal discussing the health care plans of Obama and McCain. While Obama claims his plan will not lead to "socialized medicine," Gisser and Brown believe that his reliance on government will inevitably lead to a breakdown of the current system.

As far as McCain's plan is concerned, they say that it would:

McCain's plan is radical yet simple: It would offer every individual $2,500 and every family a $5,000 refundable tax credit to purchase health insurance. He would abolish the current tax code where employers purchase health insurance for their employees with pre-tax dollars. We can safely assume that his plan, while subsuming Medicaid, would leave Medicare intact.

For the poor, McCain's tax credit would be offered in the form of a negative income tax. Thus, McCain's plan is in fact a voucher extended to every citizen, from Bill Gates to the poorest person sleeping under a bridge. Allowing people to purchase health insurance across state lines, and overriding the hundreds of state-coverage mandates, will open up a huge national market for the tens of millions of voucher holders. At long last the spiraling cost of health care will level out.

McCain's plan likely is better, but I wonder, even if he gets elected, will Congressional Democrats go along? I don't think we'll get to find out.

Posted by Paul Gessing at 07:33 PM | Permalink | Comments (0) | TrackBacks (0)

According to this recent report from the Albuquerque Journal's Business section (subscription required although a shorter free article is available here), New Mexico's State Coverage Insurance program has stopped enrolling new members at 40,000. This has occurred two years earlier than the government originally expected.

SCI is a funded through the federal SCHIP Program. The state pays $100 million per year on the program, approximately 1/4th of the total cost. New Mexico uses SCHIP, a program intended for children, to fund insurance for adults under a waiver that expires in 2010. Because New Mexico already has such generous Medicaid standards, the state couldn't find enough people to spend SCHIP money on, so, in their infinite wisdom, the program was expanded.

The result is that between an employer and employee, costs for insurance under SCI come to $110 per insured person, per month. The cost of the program to federal and state taxpayers is $400 million annually and $40,000 people are covered for a total cost of $10,000 per insured person. This leaves a total cost per insured person of $11,320 annually. Considering that my Health Savings account costs my employer a total of $3,600 annually, we the people are getting ripped off big-time. Don't you just love government programs? Couldn't we just give everyone who doesn't have insurance in New Mexico a fully-funded HSA and be done with it?

Posted by Paul Gessing at 10:59 AM | Permalink | Comments (0) | TrackBacks (0)

With all the action and talk about the bailout, the health care issue has been moved off the front pages. Nonetheless, there is still discussion back and forth on the issue. Dr. Jim Tryon, a prominent New Mexico doctor who has advised Governor Richardson and others on health care reform, wrote on the topic in the Albuquerque Journal. In his article which can be found here he argues:

(Our) health care “system” is a non-system. Can you imagine running a $6 billion dollar enterprise without a chief executive and a board of directors? Without a governance structure there is no way to coordinate the business of health care. Without an empowered governance structure, special interests will continue to rule and protect their individual turf, and profit, at the expense of the whole.

Of course, the idea that health care should be a "system" seems like a fallacy to me. After all, a system sounds like something that the government would control from the top-down. Medicare and Medicaid are "systems," but those are not models we should adopt. We don't have a grocery system, but there is no problem getting food at your local supermarket.

Rather than creating a "system" -- even a more coherent one than exists now -- adopting reforms in order to free individuals and businesses from unwise government policies would be more sensible than forcing a top-down system on everyone. After all, the fact that so many involved in the health care debate exercise their power to say “No” is probably a good sign that widespread support for any single reform option is not there (thankfully). Maybe we can give greater freedom a try for a change?

Posted by Paul Gessing at 03:30 PM | Permalink | Comments (0) | TrackBacks (0)

With Wall Street in crisis and so many issues sucking up airtime, health care as an issue has been pushed from the front pages of America's newspapers. Of course, Albuquerque's alternative weekly still has time to do a story about how our health care system is "poisoned." In fact, from the sound of things, American health care couldn't get any worse. But, if we've learned anything from the ongoing financial debacle, things can always get worse.

I point out as much in a follow-up letter to the editor. The fact is that our health care system does certain things very well:

Nearly 80 percent of global drug development occurs in the U.S., with only 16 percent coming from Europe. America also leads in high-tech treatments that draw people on waiting lists (or where treatments are simply unavailable) from Canada and the U.K. to get treatment in the U.S.

Before adopting policy changes for the simple sake of change, we need to carefully consider whether those changes will harm our ability to continue doing the things we do well and whether we'll really see improvements in those areas where our system struggles.

Posted by Paul Gessing at 10:37 AM | Permalink | Comments (0) | TrackBacks (0)

After failing to gain either legislative or popular support for his ambitious, universal health care plan which would have relied heavily on government mandates, Governor Richardson has introduced a scaled-back health care reform proposal that will be considered in the upcoming special session.

The Governor’s plan would:

• Require all children through the age of 18 to have health care coverage from private or public sources. The bill contains no enforcement mechanism or penalty for parents who don’t secure coverage for their children.

• Appropriate $58 million to expand existing programs to reach an estimated 50,000 children who qualify for publicly funded coverage but don’t receive it. The additional spending would recur annually, Hyde said.

• Establish a new Health Care Benefits Administration to consolidate management of several existing public coverage programs, including state employee and public retiree insurance plans.

• Gradually limit premium increases insurance companies can charge small businesses from 20 percent today to 10 percent per year in five years.

• Require insurers to spend at least 85 percent of premiums on services and guarantee that anyone who needs insurance can get it regardless of health status.

• Establish privacy requirements for patients’ electronic medical records.

While this scaled-back proposal is a significant improvement over the Governor’s original if only because it is scaled back, legislators should still be skeptical as to whether the proposal, if passed, would result in any improvement in New Mexicans’ health care or uninsured rates.

Specifically, requiring that parents obtain health care for children through the age of 18 is bound to be ineffective as there is no enforcement mechanism, but this is actually a good thing. After all, responsible parents want their children to be covered, but not all parents are responsible and many others either can’t afford it or believe that putting food on the table and gas in their car to get to work is more important than health insurance for their children.

Spending $58 million to put more children who already qualify for government health care on government plans is also a poor option. Rather than spending $58 million every year for more welfare, how about giving parents an equivalent tax break to set up Health Savings Accounts for their children?

Regarding efforts to set up a Health Care Benefits Administration, limit premium increases, and set up arbitrary requirements for insurers, these are nothing more than means to further impose government control on the health care sector of New Mexico’s economy. New government agencies and micromanaging the insurance industry are not going to result in significant improvements in either the quality or availability of health care in this state.

The fact is that government policies are largely to blame for the current health care mess. Did you know that New Mexico charges the highest tax on insurance premiums in the nation (4.003%)? How about eliminating New Mexico’s gross receipts tax on deductibles and co-pays which are tax-exempt in almost all other states? This tax which in some places exceeds 8 percent in some areas of the state is applied to this ever-increasing area of health care expenses.

The aforementioned ideas are just a few ways in which the negative impact of current government policies could be mitigated. They would also be far more likely to succeed in expanding health care access to the greatest number of New Mexicans.

While the Governor should be applauded for scaling back his mandate-heavy original proposal, the Governor’s scaled-back proposal still moves us towards an increased government role in health care. Hopefully, legislators will again reject more government reliance and instead consider market-based reforms outlined above in the upcoming 2009 legislative session.

Posted by Paul Gessing at 10:27 AM | Permalink | Comments (0) | TrackBacks (0)

Several months ago I wrote on this site about dog health care vs. human health care. John Goodman, one of the nation's free market health care analysts has picked up on that theme on his NCPA health blog. Check out his posting here.

As Goodman points out:

Why does the market for pet care seem to work so much better than the market for human care? Not that I pay a great deal of attention to such things, but I believe it's fair to say that:

* No one is saying the market for pet care is "broken" or in "crisis."
* No one is saying that the market cannot work for pet care.
* No one is calling for mandatory pet health insurance.
* No one is calling for single-payer health insurance for pets.

Posted by Paul Gessing at 02:09 PM | Permalink | Comments (0) | TrackBacks (0)

"Universal," government-mandated health care may not become law in New Mexico during the upcoming special session, but that doesn't mean that it couldn't happen in the near future. Check out this video which illustrates in stark detail how health care might work if we put government in charge.

Posted by Paul Gessing at 09:30 PM | Permalink | Comments (0) | TrackBacks (0)

A recent article from the Heartland Institute's Health Care News discusses a proposal by Rhode Island Gov. Don Carcieri (R) that would result in the state agreeing to a five-year federal spending cap on Medicaid in exchange for more autonomy over its Medicaid programs. The proposal is expected to save taxpayers $67 million.

Most states, like New Mexico, prefer to invest in creative ways to raid the federal treasury to fund their out-of-control Medicaid programs. Rhode Island is wisely attempting to take responsibility for managing a limited budget in the interests of their own citizens.

While it looks like Governor Richardson's health care plan will not progress in its entirety during the upcoming special session, his plan relies on a massive new Medicaid spending both nationally and by New Mexico. It would be nice if Richardson (or New Mexico's next governor) would take a close look at what Rhode Island is trying to do instead. After all, we can't live at others' expense forever.

Posted by Paul Gessing at 09:45 PM | Permalink | Comments (0) | TrackBacks (0)

In case you haven't heard, Governor Richardson has called for a special legislative session to begin on August 15. While the session was originally to be exclusively on the topic of health care, he has since broadened his agenda to include other issues including an economic stimulus known as the CARE Package.

It is certainly a good sign that the Governor seems to be backing off of imposing "universal" health care, but New Mexicans must be aware of the very real pitfalls associated with massive government intervention in the health care sector of our economy. Check out this informative website with interviews and discussion of some of the problems associated with government health care.

Posted by Paul Gessing at 05:21 PM | Permalink | Comments (0) | TrackBacks (0)

Japan has a single-payer health care system. While the Japanese people may be a healthy lot, they also must put up with some pretty absurd government rules and regulations. According to recent reports the Japanese government will now demand that people of that nation have their waists measured (the new state-prescribed limit for male waistlines is a strict 33 1/2 inches). If they are considered to be "too fat," the government will impose financial penalties on companies and local governments (and presumably people) that fail to meet specific targets.

As health care expert Paul Hsieh points out, such freedom-destroying regulations are the result of government payment for health care. After all:

Once a government starts violating individual rights by creating a "universal" health care system, this inevitably leads to further infringements of individual rights. This is not unique to Japan.

For instance, universal health care in Great Britain has led to infringements on the right to free speech. In 2007, the British government banned television stations from playing classic 1950's-era humorous advertisements encouraging people to have an egg for breakfast, on the grounds that "the ads do not encourage healthy eating".

When a government has to pay for everyone's health care, it will naturally demand a say in whether people are leading a "sufficiently healthy" lifestyle, as defined by the government.

If we allow the state of New Mexico or the federal government to control our health care, we will inevitably face similar intrusions on individual liberty. Bill Richardson of all people should be sensitive to this issue.

Posted by Paul Gessing at 04:02 PM | Permalink | Comments (0) | TrackBacks (0)

According to a story in this week's Albuquerque Alibi, UNM's Health Sciences Center which includes UNM Hospital and the medical school, has adopted new restrictions to eliminate drug advertising in the University's medical buildings. While those who see drug companies as evil subversives working to snooker doctors and their patients into purchasing their latest and greatest drug, it would seem that this is yet another effort by a University to stifle free speech.

After all, who is going to tell doctors what new drugs and treatment possibilities are out there? Are they supposed to hunt these treatments down on the internet? How about patients? Are drug companies' advertisements (also under attack by those who dislike the pharmaceuticals industry) now the only way they can find out about new treatments?

The fact is that if we had a health care system that functioned more like a market with consumers able to price various options (using a consumer-directed mechanism like an HSA) rather than being shielded from them by health insurance or government programs, the so-called "problem" with drug advertising would largely disappear. After all, if it is patients who decide whether to use a generic drug or the latest name brand drug, they should be able to use it since they are paying for it. In fact, opponents of drug advertising justify their position due to the higher cost associated with name-brand drugs.

Posted by Paul Gessing at 08:37 AM | Permalink | Comments (0) | TrackBacks (0)

As I've mentioned before on this blog, health care mandates are a big problem with increasing health care costs. Rarely is this issue discussed in the media, but George Will recently brought up the point with Stephen Colbert on health care and mandates (click here and fast-forward 2/3rds of the way through).

According to data compiled by the Council for Affordable Health Insurance, New Mexico has the 9th-highest mandate total (51) in the nation. Obviously, forcing people to buy a "premium" health insurance product if they are to buy any insurance at all is a big factor in giving the state the 2nd-highest-in-the-nation uninsured rate.

Posted by Paul Gessing at 04:19 PM | Permalink | Comments (0) | TrackBacks (0)

I wrote an article recently in the Albuquerque Journal about some important health care reforms taking place in Georgia. I love it when people respond to articles written by the Foundation because it shows we are having an impact and making people think.

Unfortunately, the response to my article came from Dan Davis of Los Lunas, a regular, left-wing letter-writer to the Journal. His response focuses on two points: 1) Georgia's law was passed by a Republican Legislature and signed by a Republican Governor 2) The American Cancer Society worries that high-deductible health plans make preventative treatment cost-prohibitive.

My response to Davis is two-fold: whether the law was passed by Republicans or Democrats is irrelevant. Political leaders of all stripes must be concerned with the state of American health care. Moving to a system under which costs are directly related to benefits is the only proven way to improve quality and cut costs simultaneously. Regarding the concerns expressed by the Cancer Society, consumer-driven health care plans have been on the cutting edge of efforts to improve patient quality. After all, it is much easier to convince the average person of the importance of their own health if you can attach dollar signs to healthier lifestyles.

Davis is a hard-core lefty and I don't expect to convince him, but hopefully other readers cut through his rhetoric.

Posted by Paul Gessing at 05:41 PM | Permalink | Comments (0) | TrackBacks (0)

This article appeared recently (May 28) in the Albuquerque Journal. The author's basic point is that Native Americans were promised health care paid for by the federal government and that the government has fallen short of its obligations. Of course, more money is essential (in the author's mind) to rectify this injustice.

This promise of a "right" to health care is strikingly similar to politicians' promise to "universal" health care and other plans to dramatically alter America's health care system. While more money may indeed be necessary to "fully" fund the Indian Health Care system, history has shown that government-run health services are very expensive and thus, by their nature, are ultimately "underfunded."

While the Indians undoubtedly had little choice in the wording of the "treaties" they signed with the US Government, their costly and ultimately sad experience with "free" health care should give so-called progressives pause when promoting the idea as a panacea for current problems.

Posted by Paul Gessing at 04:59 PM | Permalink | Comments (1) | TrackBacks (0)

A few weeks ago, I blogged on this page about the reforms Georgia has recently made to health care policies within its borders. Today, I wrote about these changes and urged New Mexico policymakers to follow suit, in the Business Journal section of the Albuquerque Journal. Check out the article here (no subscription required).

Posted by Paul Gessing at 08:25 PM | Permalink | Comments (0) | TrackBacks (0)

In 2006, Santa Fe County voters agreed to a tax increase to fund improved emergency medical services to outlying communities around the city of Santa Fe and throughout the county, according to Julie Ann Grimm of The Santa Fe New Mexican (911 Stretched Thin, May 20, 2008). So far, $6 million has been levied from county taxpayers and given to the county government for this purpose, but the county’s emergency needs still haven’t been met.

The county’s been having a problem with recruiting and retaining enough paramedics. If a county resident calls 911 because of a heart attack, there may not be enough county paramedics to respond. Odds are the city of Santa Fe, which has its own fire department and adequately staffed emergency response team, will have to send its own paramedic team to far off county lands, leaving the city more vulnerable to a shortage. The city and county medical employees try to work together to meet the needs of citizens.

Unfortunately, the city and county governments don’t cooperate in the same way. Santa Fe city residents (who are Santa Fe county residents as well) are helping to pay for services outside of the city, but their city government is actually contributing to the county shortage by offering more competitive wages to paramedics, leaving the county fire departments in need.

While this competition drives paramedic wages up, it almost seems that the County and City should combine rescue efforts so services do not overlay. Even better, the City and County would likely save even more up to 2/3rds of the money it spends now by privatizing some emergency medical services.

Posted by Corey Davis at 04:08 PM | Permalink | Comments (0) | TrackBacks (0)

You may have missed it unless you work in health care...in fact, I can almost guarantee it, but the State of New Mexico held a "Input Meeting" on New Mexico's Comprehensive Strategic Health Plan. Now, as an advocate of free markets and individual choice, the very concept of the government having a "comprehensive" plan for my health is distasteful and the idea that governments can even make decisions in a "strategic" fashion is a bad joke.

But, the meeting was held and I attended one of the panels on financing health care in Albuquerque. Not surprisingly, for a day-long meeting, nearly all of the attendees were either employed by government or work directly for a particular interest group. Average New Mexicans simply did not attend. More importantly -- and perhaps as a result of the self-interested attendees -- the primary topic of discussion was "what can government do for me?" Unfortunately, as long as the focus of health care reform is on government doing more rather than less, the problems in our health care "system" will worsen.

For a look at the framework on which discussion of the State's so-called strategic plan was based, check out the word document found here.

Posted by Paul Gessing at 12:29 PM | Permalink | Comments (0) | TrackBacks (0)

According to a new study, New Mexico ranks number one (worst in the nation) in deaths from falls for seniors. New Mexico ranked highest with 99.26 deaths per 100,000 people over the age of 65. Wisconsin was second at 87.35 deaths per 100,000 people over age 65 and Vermont came in third with 81.46. Alaska ranked the lowest, with 15.95 deaths. Medical treatment costs for falls involving people over age 65 were more than $19 billion in 2000, and that figure is projected to increase to more than $40 billion by 2020.

While the problem of seniors falling is certainly real and obviously expensive, the ability to prevent it and potential preventative measures are unclear. Certainly, it would seem that seniors should be aware of the problem and take steps to prevent or prepare for it.

Posted by Paul Gessing at 01:27 PM | Permalink | Comments (0) | TrackBacks (0)

Georgia Gov. Sonny Perdue recently signed legislation making High Deductible Health Plans paired (HDHP) with Health Savings Accounts (HSA) more affordable and available in that state.

An HDHP is a health insurance plan that offers consumers lower premiums and higher deductibles than a traditional health plan. HSAs allow consumers to set aside funds tax-free for future qualified medical health expenses.

The legislation exempts insurers from state premium taxes for the sale of high deductible health plans with a Health Savings Account, while allowing consumers to deduct from state income taxes an amount equal to premiums paid to a HSA plan. The new legislation will affect mostly the self-employed and small business employees by providing a $250 annual tax credit for small business employers that spend at least $250 annually to enroll their employers in an HSA plan.

If Governor Richardson and New Mexico's legislators are really concerned about reducing the number of uninsured in the state and improving access to health care, they should consider similar legislation.

Posted by Paul Gessing at 04:53 PM | Permalink | Comments (0) | TrackBacks (0)

Recently, the Albuquerque Journal contained a story with the headline "NM Ranks High on Health Care." Since I follow these issues closely and have a pretty good grasp on New Mexico's very real health care problems, I immediately took a closer look. What gave New Mexico such a positive ranking on health care?

The answer, if you can call it that, is contained in a recently-released study by the Trust for America's Health. According to this study, what New Mexico ranks high in is receiving funding from the federal Centers for Disease Control.

Of course, there is no correlation between CDC spending and health care outcomes, but as a Trust spokeswoman said, "New Mexico does well competing for federal health care dollars. Officials in New Mexico have been aggressive and successful in submitting grant requests."

So, while the Trust study claims that more federal funding is needed for disease prevention programs, New Mexico is having great success in accessing more than its share. Maybe the next time the Trust studies health care spending, it will take a look at whether all this money actually achieves intended results.

Posted by Paul Gessing at 09:22 AM | Permalink | Comments (0) | TrackBacks (0)

I have a great deal of respect for people who own and operate businesses in New Mexico. This a big-government state and the culture is not friendly to entrepreneurs. That said, a recent story (subscription required) from the Albuquerque Journal's Business Outlook section outlining a new health care plan being developed by business groups including the New Mexico Restaurant Association and the Association of Commerce and Industry.

Unfortunately, rather than supporting market-based reforms such as those proposed earlier this year by the Rio Grande Foundation, this supposedly "pro-business" coalition instead is arguing that the gross receipts tax (as opposed to taxes levied on employers) should fund the expansion of government health care plans. While the business coalition does at least stress the fact that, as Beverly McClure of ACI notes "about half of the state's uninsured already qualify for some kind of coverage or public program, and they still don't sign up." Nonetheless, if this coalition wanders down the path of higher taxation and bigger government, they are heading down the same path towards government-managed health care that Governor Richardson's failed plan did.

Rather than bigger government, New Mexico businesses must rally behind ideas like eliminating the gross receipts tax on health care, allowing individuals to purchase coverage across state lines, and reforming Medicaid (to name just a few ideas). These reforms -- unlike government programs -- will cut costs and increase coverage.

Posted by Paul Gessing at 09:50 AM | Permalink | Comments (0) | TrackBacks (0)

Socialists and government bureaucrats have a knack for framing policy discussions in terms of more or less socialism rather than emphasizing individual freedom. This has certainly been the case in the debate over health care. Now, the state wants input on a "Comprehensive Health Plan" and is holding meetings around the state to get public comments.

Certainly, those of us who understand how markets and individual freedom work will probably be turned off by the very concept of a "comprehensive" plan put forth with the state intimately involved in the process. After all, we'd rather have a dispersed and decentralized health care "system" in which individuals retain control over such important decisions. Nonetheless, if advocates of free markets and less government involvement in health care ignore such meetings, we have no excuse when the socialists make policies we don't like.

If you can't go to the meeting, you can offer your comments here.

Posted by Paul Gessing at 10:57 AM | Permalink | Comments (0) | TrackBacks (0)

The centerpiece of bureaucracy-based health care reform like the proposal Governor Richardson continues to push is "universal coverage." By this, advocates mean that if we all have health insurance then everyone will have access to health care. Sounds good enough even if the actual policy implications are a lot messier than they appear at first glance.

As I have written in the past, however, before governments embark upon dramatic "reforms," we should make sure that current policies are not unnecessarily hindering the ability of New Mexicans to access quality health care. One policy I just discovered that is undoubtedly making health insurance and health care less accessible than it should be is taxation. Specifically, taxation of insurance premiums. Simply put, if you tax something you get less of it; if you eliminate taxes on something, you'll get more of it.

Surprisingly enough, New Mexico levies a 4% tax on health insurance premiums! This means that for every $100 your employer or you pay for health insurance, the government gets $4. That doesn't seem very smart if "universal coverage" is the goal. Actually, the original tax was 3%, but back in 2004, the Legislature and Governor Richardson apparently decided that health insurance wasn't expensive enough, so they added a 1% surcharge.

Posted by Paul Gessing at 06:42 PM | Permalink | Comments (1) | TrackBacks (0)

In keeping with yesterday's posting on the abysmal state of education in this country, this story which discusses a poll on what "socialized medicine" means to a group of survey respondents caught my attention. Among the findings:

* 67% said they understood what "socialized medicine" meant;
* Of those, 79% said the term means that the government makes sure everyone has health insurance;
* Only 32% said it means that the government tells doctors what to do;
* Of those who said they understand the term, 45% said that if America had socialized medicine, the health care system would be better, while 39% said it would be worse.

The fact that 79% of those who thought they understood what "socialized medicine" means said that it meant that the government made sure everyone has health insurance is not unexpected, but the finding that only 32% understood that giving everyone health insurance also means that doctors would be forced to obey government dictates is unfortunate and a clear sign of economic ignorance.

Obviously, we at the Rio Grande Foundation oppose socialized medicine or anything like it with every fiber of our being, but if Americans are convinced to go along with such a scheme without understanding that government would quickly be inserted into every health care decision Americans make, they are buying a bill of goods. This is an educational burden and opportunity for free market advocates.

Posted by Paul Gessing at 04:12 PM | Permalink | Comments (0) | TrackBacks (0)

While most of the attention during New Mexico's recently-completed legislative session was on Governor Richardson's massive, government-managed health care proposal, apparently it wasn't the only health care reform considered during the session. In fact, Richardson just signed a new law that further regulates health insurance.

One provision in the law will make it more difficult for insurance companies to rescind coverage for people who develop serious medical conditions.

The cap on yearly medical services paid by health insurance policies offering certain minimum coverage also will increase from $50,000 to $100,000 under the new law. The higher limit starts next year.

Currently, an insurer can refuse to pay claims or rescind coverage if there were omissions or misstatements—sometimes even if inadvertent—about a person's medical condition or medical history in an insurance application.

That standard will change under the new law. Once a policy takes effect, insurers can deny claims or end coverage only if they show that an individual made "willful or fraudulent misstatements" in their application about a pre-existing medical condition.

Another change in the new law is to give people more time to obtain medical insurance after they lost coverage. It increases from 63 days to 95 days the "creditable coverage" period. That's the time in which a person without coverage receives credit for previously being insured.

While all of these policy matters may sound reasonable to the average citizen, each of these new regulations will further increase the cost of health insurance in New Mexico. Considering that Richardson is simultaneously working to mandate "universal coverage," it might seem odd that he would sign legislation to make insurance more costly. Unfortunately, it is perfectly consistent because the tendency is towards greater government involvement in all areas of health care.

Posted by Paul Gessing at 09:27 AM | Permalink | Comments (0) | TrackBacks (0)

New Mexico State Senator Dede Feldman (D-ABQ), one of the state's leaders on the health care issue, had an interesting opinion piece in the Albuquerque Journal on Thursday.

While her arguments don't necessarily hold together individually, she ultimately decides that "Democrats (who control the Legislature) should trust one another enough to roll up their sleeves...and draw on a basic common value: affordable, quality health-care should be accessible to everyone." Her arguments are worth analyzing.

1) Mandating that individuals purchase health care is key. While there will be "winners and losers in the short term, costs will ultimately be lowered for everyone." Unfortunately, the Senator is engaging in some wishful thinking here. Mitt Romney's reform in Massachusetts relied on an individual mandate that has failed to lower costs. Rather than winners and losers as Feldman hopes, we'll all lose with an individual mandate;

2) Regarding the concerns of other Democrats and their concerns about the ability of low-income New Mexicans to purchase insurance under an individual mandate, Feldman calls such questions "wonkish" and calls the loss of this mandate "regrettable." No solutions for this very real problem are offered;

3) Feldman's last important point is that there is "broad agreement among Democrats, but not Republicans" that health insurance companies should be forced to insure everyone and that 85 percent of insurance companies' revenues must be allocated to purchasing health care.

She credits the Richardson Administration for "getting the insurance companies to agree, at least partially," but she doesn't explain that the only reason the insurance companies are willing to go along with this in the first place is that since we'll all be forced to buy health insurance, those companies will have a captive market and will be able to charge whatever they wish. Since the insurance companies are "playing nice," they are assuming that they'll get favored treatment when it comes time for rate increases which will inevitably be subsidized heavily by taxpayers.

Feldman asks or at least mentions some of the key questions in the health care debate. Unfortunately, she seems to dismiss these concerns in an almost single-minded effort to obtain "universal coverage" for New Mexicans. If she gets her way, we'll not only be poorer, but we'll have fewer doctors in the state to treat us. We can't afford this "reform."

Posted by Paul Gessing at 10:37 AM | Permalink | Comments (0) | TrackBacks (0)

I recapped the results of Governor Richardson's efforts to impose a highly bureaucratized -- albeit not explicitly socialist -- health care proposal on New Mexico in National Review Online. While the story of the 2008 legislative session and the failure, at least to this point, of the Governor's proposal, is something that many New Mexicans are undoubtedly aware of, Richardson is still hoping to reappear on the national stage as a potential Vice Presidential candidate. The American (and New Mexicans who haven't been paying attention) people should at least be aware of what he's been up to recently.

Posted by Paul Gessing at 10:42 AM | Permalink | Comments (1) | TrackBacks (0)

By now, most of you are probably aware that Governor Richardson has called a special session in an attempt to get his health care bill passed. This was no surprise given the Governor's fixation on health care before the session began, but with little in the way of agreement on the issues, Richardson's move seems somewhat desperate. After all, even House Speaker Ben Lujan, D-Santa Fe, said of the prospects for a special session, "It won't be fruitful for the governor to call a special session if there is not mutual agreement."

This is the rub. The House which Richardson normally counts on for support didn't even go along with the Governor, but instead gutted the bill. The Senate is even further away from the Governor than that.

Crazy things can happen in a special session, but if legislators seemed skittish about reforming health care in a short, 30-day session, it seems even less likely that they'll go along with the Governor during a special session that is sure to be unpopular with legislators of both parties, particularly since they've already rejected his reforms once. Lashing out at those who don't go along with his wishes seems to be the Governor's current mode of operation. Only time will tell whether legislators cow-tow to the Governor.

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As you probably know, the Rio Grande Foundation has been among the most prominent organizations opposed to more government intervention in the health care sector and supporting market-based reforms.

While most New Mexico businesses and business organizations have opposed Governor Richardson's plans for a massive new government-run health system, the Greater Albuquerque Chamber of Commerce came out in support of the Governor's plan. Recently, a group of businesses and other organizations including the Rio Grande Foundation sent a letter to the Chamber outlining concerns with the Chamber's support for even more government intervention in health care and the negative impact such policies would have on small businesses. Mario Burgos blogs about the issue here.

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Way back when Congress was debating the tobacco settlement, opponents of the settlement, which amounted to government control over the tobacco industry, opponents argued that smokers saved governments money compared to what they would spend on end of life services for those who lived long, healthy lives.

That assertion has been borne out again in a recent study done in the UK which found that health care for those who are healthy and live the longest costs $417,000 from the age of 20 on while care for the obese was $371,000, and for smokers the cost was about $326,000. In other words, people with unhealthy habits actually consume less health care over their life-spans than those who are healthy. While this would be entirely irrelevant in a free country, government's massive role in health care makes it highly relevant.

The good news is that governments can no longer use taxpayers as an excuse for attempting to control our lives; it looks like some other excuses for the nanny-statists are in order.

Posted by Paul Gessing at 10:32 AM | Permalink | Comments (0) | TrackBacks (0)

Somewhat surprisingly given its usually reasonable editorial opinions, the Albuquerque Journal endorsed Governor Richardson's health care plan. After all, as the paper concluded, "New Mexico's condition can only get worse."

We've heard this before. Richardson, in his state of the state address, repeatedly implied that health care in New Mexico cannot get worse than it is now. For starters, he said, "the status quo is unacceptable" and he went on to state "The most expensive choice is to do nothing." While advocates of radical change in our health care system seem genuine in their conviction that things can get no worse, what are the facts?

Yes, New Mexico has a disproportionately high rate of uninsured with 400,000 out of 2 million (third highest in the nation). While it may seem plausible to state that health care could get no worse, how about for the rest of us? Richardson's plan would force doctors -- as a requirement for licensure -- to accept whatever the state or insurance companies provide them in the way of payment. Clearly, both the state and insurance companies will have tremendous incentives to cut costs at doctors' expense, thereby forcing doctors out of the state.

Obviously, if ever-greater numbers of doctors are forced out of New Mexico, we could end up with even less access to actual health care (as opposed to insurance) for the 1.6 million insured and the 400,000 uninsured alike. Before embarking on a massive government program that even supporters view as "imperfect," we need to take a clear-eyed look at whether this supposed "solution" might actually make the current situation even worse.

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While the Rio Grande Foundation is often called a "conservative" think tank and Albuquerque's alternative news weekly would typically be called anything but, part of our charge is to reach out to those who may not necessarily share ideas -- at least normally. Nonetheless, when I read this article in the Alibi I felt that it was a perfect opportunity to weigh in on why all of us, no matter our political persuasion, should be concerned about government health care schemes. After all, if the state places the kind of controls on doctors that the Governor has proposed, New Mexico could see doctors leave the state in droves. This is not the favored outcome of liberals and conservatives alike.

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Rio Grande Foundation President Paul Gessing recently appeared on Bob Clark's radio show to discuss Governor Richardson's health care reform plan and some free market alternatives. Listen to the show by clicking here. Fast forward almost one-third of the recording to get past the advertisements, etc.

Posted by Paul Gessing at 01:40 PM | Permalink | Comments (0) | TrackBacks (0)

You can tell Bill Richardson is no longer running for President (and that he is a lame-duck governor). After all, who in their right mind that is running for office would attack an entire interest group for no good reason. I'm referring to Richardson's comments that doctors are "greed