Wednesday, March 24, 2010

Conservative Analysis of the Federalization of Health Insurance

The liberal Democratic-led United States Congress has approved President Barak Obama’s plan to federalize health insurance, which he has signed into law. The law federalizes health insurance not through federal ownership, as in the case of other industries and enterprises, but through heavy government regulation, at the loss of liberty in various ways.

Among the many provisions of the law, the federal government will oversee the collection of insurance premiums, fine those employers with over 50 employees who do not provide health insurance benefits as a form of compensation and individuals who do not have insurance policies, require that insurance policies provide whatever benefits it decides, and approve all insurance policies. With government control, bureaucrats will decide whether or not individuals are worth the expense of coverage (i.e. rationing). Therefore, the law truly meets the definition of a “government takeover” of health insurance. It is not communist-style socialism whereby the government owns the industry, but fascist-style socialism, whereby the government does not own it, but effectively controls it. Individuals will thus lose their commercial rights.

That the main intent of Obama and the liberal Democrats is government control, instead of only their stated goal of helping those in need by extending insurance coverage to many who do not have it, is suggested by the extent of these regulations that affect all Americans, even though most Americans are satisfied with their insurance policies. Obama and the Democrats believe that government control is the solution to every problem because they do not believe in free market solutions. Yet the law neither reduces the cost of insurance for many Americans, for which it was advertised as necessary, nor prohibits one of the practices its proponents claim it will end: the dropping of coverage for those who are ill; the insurance companies are simply replaced with government bureaucrats who would deny coverage.

It was government policy that contributed to the problems with health insurance in the first place. During World War II, the federal government implement wage controls, which forced companies to compensate employees with health insurance in lieu of cash, which has caused many employees to overuse health care, which they regard as free because they are ignorant of the cost, even though the higher the cost of insurance premiums, the lower their wages and salaries. Furthermore, health insurance benefits represented a tax-free form of compensation, which is not only unfair to those who pay for their insurance out of their pockets without any tax benefit but also contributed to the sense of health insurance as not costing anything. Instead of gratitude toward those employers who provide health insurance, Obama and the liberal Democrats believe that employers have an obligation to provide it and now will force them to do so.

Other government causes for the increased costs of health insurance the law was supposed to address include the federal ban on purchasing it across state lines and the higher costs of law suit awards for medical malpractice. The health insurance federalization law addresses neither of these concerns. It continues the dependency on employers, whom it makes agents of the federal government, for health insurance. It even increases the tax unfairness and reduces freedom because it limits health savings accounts, the tax-advantaged instruments enacted by Obama’s predecessor to liberate Americans from dependency on their employers for health insurance.

By extending insurance coverage to some who do not have it – regardless of whether they want it – the law that federalizes health insurance creates a massive new welfare entitlement, which reflects the goal of Obama and the liberal Democrats to redistribute wealth instead of liberating the economy from government interference in order to unleash prosperity. In other words, the government steals from those who earn money and gives it to those who do not. Welfare is not charity. Because welfare decreases liberty by taking away the people’s freedom to engage in charity, it nullifies charity.

Even with the increases in taxes not only on the wealthy, but on anyone who purchases certain medical devices and on pharmaceutical companies, the imposition of fines and increases in insurance premiums for many, the law will nonetheless result in cuts in health care, as well as increase the deficit, in addition to the massive increase in federal spending already undertaken by the Obama Administration. In addition to the rationing of health care, the law to federalize health insurance will provide federal funds for insurance companies that cover abortion, in addition to the anti-life aspect of health care rationing.

These taxes and the higher costs of goods and services that will result because of the increased costs to businesses will be harmful to the economy and further reduce economic liberty, as well the increase in federal debt. In addition to violating states’ rights by unconstitutionally expanding the federal power to regulate interstate commerce to the power to force individuals to engage in commerce, the law represents an unfunded federal mandate to the states to provide even more welfare benefits in the form of health insurance coverage for certain individuals.

In conclusion, instead of using free market solutions to problems in health insurance or leaving the matter up to the states, or eliminating the federal interference in the market that caused some of the problems in the first place, the Obama Administration has seized the opportunity to control a major sector of the economy as part of its policy of centralizing power in the federal government. The law that federalizes health insurance is costly to both the economy and individual liberty, as well as to the constitutional rights of the states.

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