Open Letter on Health Care

Ed Feulner / June 18, 2009

To the President and Congress of the United States
From Edwin Feulner, Ph.D.
President, The Heritage Foundation

Health care reform has been a central goal of The Heritage Foundation since our creation more than three decades ago, so we welcomed President Barack Obama’s call for a common effort to find the right solution to this public policy challenge. We believe that putting families, not the government, in control of the system is the key to success. We want to strengthen our health system based on that principle.

The trouble has been that, no sooner does the President call for “everybody to pitch in” and engage in the debate, than he vilifies anyone who criticizes his plans. Denigrating different views does nothing to improve the tone of the debate here in Washington, let alone achieve real reform.

Having a civil national debate will produce more lasting change; accusing opponents of engaging in “scare tactics and fear-mongering” will not.
And make no mistake: there are legitimate concerns with what the White House has proposed. Americans need to understand the implications of all of the competing proposals, whether from the White House, from Capitol Hill, from industries, from think tanks or from interest groups.

In his speech to the American Medical Association, the President said, “When you hear the naysayers claim that I’m trying to bring about government-run health care, know this: They’re not telling the truth.” Truth, however, is not a commodity over which the President has a monopoly. We not only believe that we are alerting the nation to potentially catastrophic consequences when we point out pitfalls in his plans, we think that some proposals being made by the White House are advertised on false premises.

Here are a few examples:

• If you like your health care package you can keep it: This assertion is difficult to square with the facts. The President says that a “public option”—a government plan—would just be one of many health care plans that Americans could select. In fact, a public plan will lead many employers to drop private health coverage for their workers and dump them into the public plan—just as many employers in the 1990s pushed their workers into cheaper managed care plans. According to independent analyses, as many as 119 million Americans could end up in a public plan. This is hardly letting people keep what they have. And many in Congress are eager to expand a public plan, with tight rules on what your doctor can do and how much he or she will be paid. Congress can do that because it will be both the “umpire” who sets the rules and the “team owner” of the public plan. There will be no “level-playing field.” We believe a public option will toll a death knell for private plans.
• The end goal is not a single payer system: This is another Washington euphemism that confuses people. Let us all be clear: The “single payer” here is Uncle Sam, using taxpayers’ money, and not just paying the bills but calling the shots and deciding what care every American will get—or not get. The inclusion of a public option is nothing more than a Trojan horse. The architects of the President’s proposals, and the sponsors of his proposals on Capitol Hill, know that once a government plan is in place, private insurance companies will be eventually run out of business. The government already owns a major bank and auto company; we shouldn’t hand over the medical industry as well.
• The proposals are deficit-neutral: The President also asserts that a government system will be fully financed. This is a stunning untruth. Analysts, including the non-partisan Congressional Budget Office–Congress’s own watchdog–have issued preliminary estimates that the cost could be high as $2 trillion over 10 years, with most of that borrowed money. Even squeezing Medicare payments and adding new tax revenue will not pay for the massive burden this plan would put on American families. And current congressional proposals would still leave millions without insurance. Washington always says that new costs will be paid by savings elsewhere, but these phantom savings never materialize. These new costs will be borne by American families.
• The quality of your health care will get better: One need only look at current government health programs to test this premise. Medicare has huge gaps in coverage. Medicaid’s quality is notoriously bad. They both offer substandard care compared to most private insurance plans. These persistent deficiencies are routinely overlooked in discussions of a government health plan. Rather than fixing Medicare and Medicaid, what the government proposes is to make these programs the foundations of a universal plan.

But we know opposing bad ideas is not enough. We need to fix the gaps in our health care system and lower costs for Americans. The system we need must not just protect union bosses, bureaucrats and select cartels, it must empower American families. The nation needs health care reform, not health care micromanaged by the government.

We are happy the President has joined a cause we have championed since our inception. He has recently been asking audiences across the nation “Where’s the alternative?” We at The Heritage Foundation are ready to discuss our alternative plans and help craft a bipartisan solution to America’s health care problems. That is what the country needs and what the President says he wants.

Specifically, a plan that would reform health care will need to:

• Give families control of their health care: We need to let families—not the government—control decisions so they can choose the coverage they want. For this to happen private health insurance needs to be portable—that is, owned by Americans so they can take their package from job to job. The health care system we have today was conceived in the era of World War II, when many Americans worked for the same company all their lives. As we know, that is not the case today. The President has acknowledged this. But we do not need a public plan, or mandates on businesses, to have portability. We need changes in rules and the removal of tax penalties to allow families real choice and ownership.
• Reform the tax system: For portability to become reality, we need to reform the tax system. Right now, families can get a tax break for their insurance only if they hand over control of their insurance to their boss, and leave their plan behind if they change jobs. That needs to change. We need to provide the same tax relief to families wherever they choose to get their plan. In that world of empowered families, plans would have to compete to satisfy them, not compete to cut costs for employers.
• Bring on competition: Americans will get quality health care only with the mechanism that has given us quality in all other aspects of life: competition. The way to get quality care in America is to have insurers compete to satisfy families in an insurance market, one that provides transparent information, ease of delivery and quick results, and which is fair to families and their doctors. Members of Congress pick and choose plans in such a market. The rest of America should also have that right.
• Recognize that states know better than Washington: The challenges of organizing and delivering health care vary greatly across the nation. Rural Mississippi is not the same as Midtown Manhattan. States have always been smarter than Washington at figuring out how to get the job done. To the extent that government must play a role, the states should take the lead in devising the best way to reach our national goals. The last thing we need is one-size-fits-all health care. Congress needs to let states find the best way to achieve value for money in widening coverage while bringing down costs.

A reckless, expensive and one-sided rush toward “reform” would not only be damaging to our public discourse, but it could fundamentally change our society in ways that have far-reaching consequences.

Rather than bringing in the failed central-planning approach to health care, with the government controlling who gets what, let’s ensure access to affordable health care for all Americans. Let’s use the tried and tested approach of the empowered consumer in a truly competitive market.

These are some of our remedies to our nation’s health care system. There are other free market ideas that also warrant consideration. We call on the President and Congress to widen the conversation. Let the debate truly begin.