Myths of Health Care Reform

This afternoon a press release popped into my inbox from John Cornyn entitled, “Health Care Reform Alert.”

The email from the junior U.S. senator reads like a lucid, well-informed critique of the current Democratic health care reform bill being considered in Washington. Cornyn doesn’t resort to claiming that your doctor will soon be a government bureaucrat transferred from the DMV.

He’s being much subtler in his rhetoric. Still, it contains some serous distortions.

Cornyn writes that “The health care reform proposals currently being offered by Congressional Democrats will not substantially lower costs or fix the problems in our health care system. Instead, their plan would shift costs to the taxpayers.”

That sentence contains two big myths.

1. Cornyn is referring to the so-called “public option” currently in the health care reform bill. It would create a government-run health care plan to compete with the private sector. The public option would likely  lower costs. That’s the whole point. The insurance industry is desperate to defeat the public option– or severely water it down — because the plan is so low cost that insurers know they can’t compete with it.

2. Cornyn also dredges up the myth that a public option would shift health care costs to taxpayers.

Well, who does Cornyn think is paying for health care now?

It’s true that, under the current reform bill, the government would pay for a lot more of the health care in this country. And taxpayers fund the government. So, in the simplest analysis, taxpayers would pay more.

But taxpayers don’t exist in a vacuum. Taxpayers are Americans, and Americans are paying, on average, the highest per capita costs for health care in the Western world.

We pay  for current government programs like Medicare and Medicaid. Many taxpayers also have to pay for their own health care plans. Underinsured taxpayers end up shelling out for high co-pays or paying for procedures out of their own pocket. And when one of the 40 million Americans without health insurance becomes ill and ends up in an emergency room at a public hospital, you know who pays for that in the end? The taxpayers. 

It’s possible that some taxpayers (read: rich folks) whose insurance is paid for by their employers would have to pay a little more under a public option — at least at the outset.

But those costs could eventually come down. If the number of uninsured Americans drops, the costs to the system will drop as well.  The Kaiser Family Foundation estimated that in 2004, uninsured Americans cost the U.S. health care system $41 billion. Local governments paid 85 percent of that cost.

That’s $35 billion paid for by — wait for it — the taxpayers.

There are certainly valid reasons to oppose the public option, particularly if you believe — as Cornyn does — in limited government. But the argument that a public plan won’t lower costs and would fleece taxpayers is misleading.