Rep. Pete Stark (D-Calif.) writes in The Nation, “As healthcare costs rise at double-digit rates, fewer and fewer manufacturers and small businesses can offer comprehensive coverage to their employees.” This is undoubtedly true. Stark’s solution? Medicare for All: “With Medicare as a model, we can fill the growing gaps in health coverage and ultimately weave together a stable, comprehensive, affordable system for Americans of all ages.” And how will Medicare keep health care costs so low? Stark again: “Medicare has lower administrative costs than any private plan on the market.”

But as CATO’s Michael Cannon noted last week, those low administrative costs come at a steep price. According to law enforcement authorities, U.S. taxpayers are the victims of more than $60 billion in health-care fraud every year. The Washington Post reports that “a critical aspect of the problem is that Medicare, the health program for the elderly and the disabled, automatically pays the vast majority of the bills it receives from companies that possess federally issued supplier numbers.” And why can’t Medicare buckle down and prevent all this fraud? The Post again: “Officials who oversee the Medicare program say they are vigilant despite time pressure and limited resources. Employees review fewer than 5 percent of the nearly 1 billion claims filed each year.” In other words, the famously low administrative costs that advocates of government-run health care so adore are the exact reason why Medicare is such a great tool for criminals to defraud the American public.

But Stark is not satisfied with making it easy for criminals to raise the cost of health care. He also wants to make sure medical equipment suppliers can inflate health care costs legally through government price controls. Currently, Medicare buys medical equipment for seniors using a centrally planned fee schedule. So despite the fact that an average citizen can buy a power wheelchair for $2,174, Medicare pays $4,023. In 2003, Congress passed a law that allowed the Department of Health and Human Services to phase out the fee schedules in favor of competitive bidding. But just as this new process is about to begin, saving taxpayers an estimated $1 billion annually, Stark has introduced a bill that would preserve most of the fee schedules through 2011 and some until 2015. The proposed delay would cost taxpayers $3 billion in wasteful spending.

Rising health care costs are indeed a threat to the bottom lines of U.S. businesses, and the skyrocketing projected growth of Medicare is a threat to the federal government’s fiscal health. Both of these issues need to be addressed, but encouraging fraud and waste by expanding Medicare and preventing free market reforms is not the way to do it.

Quick Hits:

  • Democrats in the House avoided voting on Rep. John Peterson’s (R-Pa.) plan to allow offshore drilling bill by canceling a key committee vote yesterday.
  • Rep. Maurice Hinchey (D-N.Y.) called for a government takeover of privately owned refineries yesterday.
  • Environmental groups sued to stop oil drilling in Wyoming yesterday.
  • English as an official language has gained momentum as 19 state legislatures are considering bills to join the 30 states that already have laws specifying that official government communications be in English.
  • According to Gallup, the “economic stimulus” checks Americans are now receiving are having no effect changing consumer attitudes about the economy.