health care

This is a gift on so many levels. New York governor David Paterson doesn't seem to have the stones to hike sales and income taxes across the board, so the result is a series of 88 tax increases on services people use every day -- like iTunes downloads and taxis:

The record labels couldn't do it, but New York's Governor wants to make Apple (AAPL) iTunes shoppers pay more than 99 cents per song.

Much of Wall Street is gone now and so are the fat tax revenues it used to earn for New York state.

In order to close a resulting $15.4 billion budget gap, New York Govenor David Paterson wants proposed 88 new fees and taxes.

Among them, an "iPod tax" on the sale of downloaded music and other "digitally delivered entertainment services."

The Daily News reports that the the Governor also wants to tax movie tickets, taxi rides, soda, beer, wine, cigars and massages. Clothes under $110 would also lose their tax exemption. Cable and Satellite TV would become subject to sales tax.

This is eerily reminiscent of the sky high Dinkins-Cuomo hotel occupancy tax rates. When Rudy Giuliani cut them, it sent an immediate signal that New York was open for business, literally and figuratively. Our candidate for governor, and it could be Giuliani, now has a ready-made issue: kill the iTunes tax. And restore a sense in which New York is one state, not an agglomeration of petty interests to be bought off by tax differentials. Comically, Paterson is going to force you to drink diet soda by taxing it less and directing the proceeds to obesity prevention. (No word yet on Albany's obese state budget.)

This is a template that could resonate state-to-state. As Soren has detailed, the states face an unprecented fiscal emergency. And most statehouses are now controlled by Democrats. Many governor's seats will be open -- a lingering impact of the 1994 tidal wave when so many states pressed the reset button, electing and re-electing Republicans. Their 2002 replacements, mostly Democrats but some Republicans, are now largely term-limited.  

This necessitates three things. First, governor's races should be a massive focus of attention in then next two years. Instead of being a sideshow for the next RNC, in their typical DC-centric quest to prop up our numbers in the Senate and House, we should be putting most of our eggs into winning statehouses and salvaging what we can out of the 2010 redistricting cycle in state legislatures.

Second, Republicans at the state level need to get their story straight on tax increases and bailouts. No Republican looking to run statewide in 2010 should have any complicity in "revenue enhancements" or any suggested federal bailout of the states so we can plausibly seen as agents of change and claim a mandate for smaller, more responsible government at the state level.

Third, with out-of-control health care costs being a big driver of spending at the state level, will the GOP put forward a compelling agenda on controlling health care costs? The health care debate at the federal level has focused mostly on the question of access -- but the problems people experience most directly are on different axes: cost and quality. With waste accounting for up to half of U.S. health care spending, it is the states -- as the biggest direct consumers of health care -- that have the biggest incentive to do something about it. Will any of them step up and do something radical?

Americans are going to be busy these next two weeks. Christmas and New Year’s are traditionally a time to spend with family, do last-minute shopping and take a break from the strains of work -- and apparently fix America’s health care system.

That’s right, Tom Daschle wants you to talk about health care over the holidays. President-elect Barack Obama’s nominee for secretary of Health and Human Services has given the country two weeks, including Christmas Day, to provide input on how to improve health care in America.

Daschle doesn’t care if you meet at home, the office or a coffee shop -- just as long as he’s able to boast that the Obama administration listened to Americans. He probably figures it’ll be an easier sell when he proposes his Orwellian “Federal Health Board” to ensure unprecedented government interference in the delivery of care.

Transparency is so key because if we're going to do this right, it's going to mean we have to involve the American people. We have to involve people who have personal stories to tell, who have ideas to share, who have real experiences they can relate to. That is the essence of good legislating.

Daschle's "grassroots" reform discussion is a con -- and we need to expose it as such. Only organized interest groups such as AARP and Families USA will be listened to or even have a chance to be heard when the legislation is drafted. Can you picture Daschle dropping by Starbucks over the next two weeks to hear from real people? It’s ridiculous.

As conservatives, we need to figure out how we’re going to respond to attempts by the Obama administration to use the guise of public feedback to implement liberal policies. That could mean flooding Change.gov with comments from conservative activists or holding our own discussion forums to promote free-market ideas. We could embrace tools like Rebuild the Party’s feedback forum or shape public opinion through popular petitions like Drill Here, Drill Now.

Conservatives don’t have time to waste. On issues like health care and the economy, the Obama administration and liberals in Congress will move quickly next year before their honeymoon ends.

This is Huckabee’s chapter in Do the Right Thing is on Health Care which he’d hoped to make a major focus of the campaign, but found his efforts were stymied by game show hosts debate moderators who kept questions on health care out in favor of what interested them.

Huckabee writes, “Frankly, it never occurred to me that any American family was sitting around their dinner table having a discussion about whether the next President might consider a pardon for Scooter Libby. But I was dead certain that most families were talking about the runaway costs of their health care expenses.”

Huckabee took flak from some libertarians for a statement that Congress would solve the problem if they were told either to give th American people the Health Care Congress has or to accept the type of health insurance many Americans had. Huckabee was not calling for government control of health care, only point to the fact that Washington was insulated from dealing with the health care system.

The Huckabees were not. When leaving the Governor’s Mansion, Huckabee had to purchase more expensive insurance policy that increased when his wife took a leave of absence from her job with the Red Cross and had to be added. His daughter faced $12,000 in medical bills over a relatively minor procedure.

Huckabee gets to a point that many Libertarians will nod their head at. Access isn’t the problem. First of all, the 47 million uninsured cited by Democrats, only 15 million are truly unable to afford health insurance or the bills that will follow.

Huckabee argues the problem is systemic and finds the Democrats’ solution of adding more people problematic in light of what he sees as the underlying problem. Huckabee writes, “simply giving an unhealthy population access to our current health care system and not addressing the underlying crisis only makes problems worse. Our current system is upside down, built entirely on the notion that we should interven when catastrophic illness hits, rather than aim to prevent illnesses in the first place.”

 Huckabee is vitally concerned with chronic disease which is rattling our healthcare system. Chronic disease is generally caused by activities such as overeating, smoking, or lack of excercise.  Huckabee finds prevention to be key.

He’s clear that he doesn’t think government’s role is to lay down harsh rules, to the “sugar sheriff” or the “grease police.”  But that there needs to be fundamental culture changes beginning with the way doctors are trained (for example lack of training in treating diabetes as well as a focus on prevention.

Huckabee throws innovative ideas out. Huckabee’s own efforts to offer incentives to health and provide greater opportunities for state employees to excercise (by offering mid-day excercise breaks) and creating a points system that allowed employees to earn points for losing weight, taking walks, and not smoking in order to earn personal leave time.

Huckabee had the policies evaluated by outside company that found the polices led to $3400 per  year in extra productivity from the employees who took part in them.

Huckabee explains why real solutions to health care don’t really happen politically. Most politicians want to focus on things they can get fixed within their term of office, and health care isn’t one of them. Democrats promise health care plans that create programs as if a program is going to fix the problem. Real solutions require more innovation and more than just government.

Huckabee has often mused as to why health insurance companies don’t cover preventive measures. In Doing the Right Thing, he explains the reason as told him by Insurance Company Presidents. With people changing jobs so often and changing insurance companies every time they switch jobs, it doesn’t make sense for insurance companies to cover prevention because the benefits of prevention will be reaped by another insurance company. Huckabee says that it’s time to move away from the employer based policy to a consumer-driven one.

Huckabee writes, ” Think about it: we don’t expect our employer to ensure our cars or homes, so why should employers insure our bodies. If we bought the insurance and were likely to keep the same carrier as we transitioned to other employers, the carriers would then have a clear incentive to take extraordinary measures to keep us healthy.”

Chapter 11 is incredibly outside the box and it brings a very interesting perspective to the health care debate.

Quin Hilyer doesn't think Hillary Clinton should be confirmed as Secretary of State, for a variety of reasons.  Others suggest the emolument clause of the Constitution or the Clinton's foreign entanglements could create problems during Senator Clinton's confirmation hearing.  Maybe, but I doubt it.  Most of the potential problems seem basically unrelated to the role of Secretary of State, or have been addressed long ago.  Perhaps more relevantly, relationships matter and by all accounts Hillary Clinton has good relationships with her Senate colleagues.  I very much doubt her fellow Senators (especially in a large majority Democratic Senate) will play hardball against a colleague.

But there's a more interesting aspect to Hillary Clinton's appointment as Secretary of State.  Consider...

• Hillary Clinton's major interest and specialty has been a domestic policy: universal health care.
• Hillary Clinton's 1993 health care reform was a famous failure.
• Universal health care will be one of the top, immediate priorities of the Obama administration.
• Obama has appointed Hillary Clinton to a foreign policy position.
• This will take Hillary Clinton entirely out of the picture - even out of the country - during the upcoming legislative fight over health care.

Hillary Clinton is a very polarizing figure on the subject of health care.  It may not have been a major factor, but I doubt this went unconsidered by either Obama or Clinton.

Promoted by Matt Moon: Bob Carroll of the Tax Foundation explains McCain's health credit better than McCain does in today's WSJ. Health care is one of those issues that the next conservative movement must provide new ideas for.

As the election hoopla crescendos, Hawaii is giving the rest of us a little preview of what health care mandates could do in the next presidency.

Barack Obama's only mandate is that all children have health insurance. Hawaii tried to accomplish this through its government, and sadly, revealed the problems.

Grace-Marie Turner, president of the Galen Institute, writes in the New York Post:

"Hawaii just had a vivid lesson in health-care economics, learning that if you offer people insurance for free - surprise, surprise - they'll quickly drop other coverage to enroll.

"As a result, Hawaii is ending the only state universal child health-care program in the country after just seven months.

"The program, called the Keiki (Child) Care Plan, was designed to provide coverage to children whose parents can't afford private insurance but who make too much to qualify for other public programs (such as Medicaid and Hawaii's State Children's Health Insurance Program). Keiki Care was free for these gap kids, except for a $7 office-visit fee.

"But then state officials found that families were dropping private coverage to enroll their children in the plan. 'People who were already able to afford health care began to stop paying for it so they could get it for free,' said Dr. Kenny Fink of Hawaii's Department of Human Services."

A lesson in human nature and government we can't soon forget.

Spent the weekend in Pennsylvania and could not escape Obama health care commericals accusing McCain of planning to impose the first ever tax on health care benefits.

Obama is running at least two commercials on this issue with white women bemoaning the threat from McCain. McCain's failure to answer this attack will be devestating.

The only fight back I saw was a Republican National Committee ad accusing Obama of b8ing a big spender. It charges Obama with wanting to spend a trillion dollars!!

Having just watched a Republican President (supported by McCain) ram through a $700 billion bail out on top of a $300 billion package the RNC ad is clearly barking up the wrong tree. No one believes McCain or any politican will cut spending.

It's important for conservatives to know where McCain stands on health care, because his policy positions are under attack. For example, do you know how to respond if someone issues this challenge: "McCain wants to tax your health benefits"?

Kudos to CBS reporter Wyatt Andrews, who dug a little deeper into Obama's No. 1 scare line about McCain's health plan. (text and video available here.)

Yes, health benefits would be taxed -- right before people are given a tax credit to offset that tax.

People who currently get health insurance through their jobs are already getting a tax break -- it's just invisible because their employers are the ones paying the insurance premiums. The average tax break for a family under the current system for job-based insurance is $4,200 per year.

McCain would offer families a $5,000 tax credit. They could keep their job-based insurance if they want, but they could also shop around -- across state lines, even, under his proposal -- for a deal that suits them.

Andrews consulted Len Burman of the Tax Policy Center, who said, "Families at all income levels would pay lower taxes, at least on average. On average, it is about a $1,200 tax cut in 2009."

While I'm still skeptical of any large strategic effect the #dontGo movement had, the energy issue overall, as well as McCain's selection of Gov. Sarah Palin, has spurred new policy messages on a wide range of economic, middle class issues. Two days ago, Congressman Eric Cantor (R-VA 7th District) spoke to the Conservative Bloggers' Briefing at the Heritage Foundation, introducing a "Middle Class Bill of Rights." The components are:

• Energy: As everybody knows by now, the rational approach is to have an "all of the above" strategy which includes production of non-renewable and renewable resources (including nuclear), as well as initiatives that increase conservation and efficiency. Cantor mentioned that the selection of Palin gives the GOP in the expertise edge of energy solutions.
• Health Care: Cantor explained that individuals worry more today than a generation ago about losing their jobs because of the subsequent loss in health care coverage. Consumer-based health care programs and the expansion of Health Savings Accounts (HSAs) are the way to proceed.
• Making Paychecks Go Further: Another way of saying "tax cuts." But Cantor also mentioned that French President Nicolas Sarkozy is proposing making overtime wages tax-exempt to fuel more productivity at the micro-level.
• Job Creation: Cantor correctly points out that the best stimulus for any economy is job creation. This means Congress has to start being concerned about competitiveness and corporate taxes. Back in January, Cantor introduced the "Middle Class Job Protection Act," which would, among other things, cut the corporate tax rate from 35% to 25%. While it is speculative to link corporate taxes to job loss/creation, the ultimate burden of corporate taxes does fall on individuals through lower wages, higher costs at goods and services, etc. (The Tax Foundation has started a campaign called CompeteUSA, showing that corporate taxes in America are increasingly out-of-line with the rest of the world.)

While I like the combination of issues and the focus on the middle class, I'm not so sure I like the branding. Middle Class Bill of Rights? I've never been a fan of economic "rights." But maybe it is this type of messaging that the Right needs for this and future elections cycles in order to successfully court the middle class. And now that McCain and Republicans are making headway on economic and energy issues, as Sean points out, Cantor is definitely headed in the right direction.

Forty-seven million uninsured. An HMO withholding approval to save a dying young woman. One in six dollars spent in America going to health care (1) (notes below), which is 4.3 times more what America spends on national defense (1). Despite that, one in four Americans saying health care is a serious national problem in 2008 (2). Not less than 81% of Americans "dissatisfied" with health care in America (3). The specter of socialism looming as 64% of Americans recently polled say it is the federal government's responsibility to make sure all Americans have health care coverage (3).

Let's not exaggerate the problem. The number of uninsured grew from 12 millon in 1989 to where it stands today mostly because of legal and illegal immigration (4), making the uninsured a one-time problem. We all know how Michael Moore gets hysterical. His last movie made much of the fact that Cuba's health care system has a lower infant mortality rate than America's, but undeniably America still leads the world in health care, with the finest hospitals, doctors, professionals, and innovations in the practice of medicine.

Yet it is clear that something must be done. If the trend keeps up, the middle class will have to make extraordinarily difficult kitchen table decisions: cut back on health insurance or food or education. Some large American companies increasingly feel at a disadvantage. They feel they have to pay for their employees' health care, when their foreign competitors do not. Obama supports "single-payer," which is a soft way of talking about socialized medicine (5). An Obama presidency coupled with a Democratic congress would likely mean the end of free market health care in America.

In these shaky times, the political tide in 2008 is dredging up a leftist economic policy. The tide is strongest in health care. Our goal must be to ride this wave to the extent we must, while steering the country into the safe cove of market economics. The free market will not stay free without a fight.

Socialism does not work. I speak as an ex-socialist. It took me years to shake off the blinders and see the light. Socialism could only work if human beings were infinitely flexible, so that if you could imagine it theoretically, it could work in real life. That's where socialism's problem starts. Human nature is not something we can change, as I eventually came to realize. People like to buy and sell what they want. People want to take risks. They want to own a tiny little bit of the world and have it as their own. People want to control their own destiny, and not be told what to do in every aspect of their lives. People want wealth, even just a little wealth, but socialism does not deliver the goods. Socialism has been tried. It has failed. Most dramatically, East Berliners voted with their feet, turning the monicker of "democratic socialism" into a bad joke. With the sole exception of the starvation state of North Korea, every former socialist country in the world now looks to China as their model. The China model, love it or hate it, has nothing to do with state ownership of private property. It has at its core the private ownership of property, and the freedom to buy and sell as you please. Socialism's inevitable failures are costly. Over 100 million lie dead from communist rule. There is no faster way to stifle innovation and destroy the quality of people's lives than to rip people's freedom away from them. The government must let people live their own lives. Socialism slices away human freedom, and so is unacceptable.

The experience of Britain's National Health System, with a country of rotting teeth, antiquated care, and long lines, and of Canada's national system, with the long waits for basic care and Canadians hopping the border for simple medical procedures, tells us more than we need to know.

Socialized medicine, or "single payer," would wreak an untold disaster upon the health and quality of life of Americans. Our country has led the way forward against disease, disability, and injury. Smallpox and polio are all but wiped out. The art of medicine has advanced to an unbelievable degree, with much thanks to Americans. Great institutions of American health care are renowned throughout the world: names like Sloan-Kettering, Mayo, and Johns Hopkins. Socialized medicine will take decisions out of doctors' hands, and prevent them from innovating and providing the best care. Socialism would take the art out of medicine and turn clinics and hospitals into factories. The quality of health care in America depends on patients, doctors, and nurses all being free to be at their best. Expanding government will increase taxes, hurt the economy, and take the freedom out of health care.

Take a look at the list of the Nobel Laureates in Medicine and you will see that there is one country that has dominated that famous prize, especially since World War II, and that country has a free market medical system. Of course, it is the United States of America (6). If we allow socialism to take root in America, there is no telling what damage will eventually be done to medicine and the American way of life. Even if we cast out socialized medicine after only a few years, those years will be lost, and whatever is lost will have to be rebuilt. Our institutions are so valuable and vulnerable, we can't risk throwing it all away for the pipe dream of socialism.

Our health care problem today is a case of market failure. Disease and injury being what they are, people will always need health care, and they won't be in a position to bargain much over the price. The markets for health insurance and health care have broken down. Health care costs have spiraled out of control, and are heading north. The price of health care has grown disproportionately to the quality of care. We must find a way forward to uphold our free market system, resolve this market failure, and keep America great.

This blog will focus exclusively on health care policy. It will argue for a market-oriented approach to health care reform. Free market basics will be stressed like being able to choose whatever doctor you would like no matter what your insurance is, and being able to get health insurance for your family at a decent price. Common sense also matters. Health insurance companies are private companies. They need to have the incentive to minimize costs while maximizing the health and well-being of their insurance customers.

The pressure to adopt socialized medicine is already large, and will grow larger. Obama has hinged his campaign on a promise he can't keep: he says will make our health care system perfect. Americans just might be desperate enough to believe he has a miracle under his sleeve. The trouble is, people don't understand why he is wrong. The voters don't understand the most basic principles of economics: scarcity, and the law of supply and demand. 

McCain must have a savvy response to the health care crisis. The first part of the response is that Republicans care about health care, deeply want all Americans to have access to good health care, and will work hard to achieve that. This is emotional, and comes out of human compassion. The second part of the response is a smart, market-oriented policy to get us there. That's where this blog comes in.

Thank you to TheNextRight.com for the opportunity to start this blog. I am taking the name of Xenophon here to honor that figure who is associated with a long and successful struggle to survive against great odds.

(1) http://www.nchc.org/facts/coverage.shtml

(2) http://www.health08.org/polls.cfm

(3) http://www.gallup.com/poll/4708/Healthcare-System.aspx

(4) http://www.cis.org/articles/2005/back1405.html

(5) http://blogs.wsj.com/washwire/2008/08/19/obama-touts-single-payer-system/

(6) http://en.wikipedia.org/wiki/Nobel_Prize_in_Physiology_or_Medicine

Ryan Ellis is the Tax Policy Director at Americans for Tax Reform

The liberals are setting us up for a tax increase, and they’re using health care to do it.  They want to double federal taxes as a percent of the economy from roughly 20% today to 40% over the next half-century.  Most of these new taxes would go toward socialized medicine.

That’s their game plan—what’s ours? 

Let’s start with principles, and move toward policy goals.

Principle 1: Conservative health care reform should neither raise taxes nor increase the size of government.  You’d think this would be a no-brainer, but trust me that it isn’t.

Principle 2: Health insurance should have nothing to do with your job unless you want it to.  In any event, health insurance should be 100% portable.

Principle 3: Shopping for health care should look more like currently shopping for prescription drugs, dental, vision, and cosmetic surgery, and less like going to the hospital or getting a checkup.  The former is price transparent and market-responsive.  The latter is bureaucratic and doesn’t work

So what’s in the conservative package?  Thankfully, someone has already put that together—the Health Care Freedom Coalition (full disclosure—ATR is a charter member).

This is quite literally the free market package of health care reforms.  It doesn’t raise taxes—it cuts them.  It doesn’t grow the size of government—it shrinks it.  It doesn’t curtail the consumer—it liberates him.  If this plan were passed, the size of government wouldn’t just stay at 20% of GDP—it would shrink to 10% over time.

So here’s the question: what do you think of the policy list?  Anything missing?  Anything which should be tossed?  Anything need tweaking?  Unless we get positively engaged in the details of the healthcare debate, the Left (who knows this stuff far better than most of us) will eat our lunch.