Saturday, October 3, 2009

The Devilish Details of Healthcare Reform

In my post of 6/1/09, I described the disturbing nature of a “deal” between the Obama Administration and the representatives of the healthcare industry, in which the business groups “agreed” to offer up $2 trillion worth of “savings” (price cuts) over ten years. I wrote:

"It requires a monumental act of evasion to believe that there is anything “voluntary” about this agreement.

"There is a word for this. It is called extortion.

"[But a] certain amount of moral guilt must accrue to business leaders for not speaking out in opposition to Obama. After all, free speech is still legal in this country. But the pressure of their own government’s threats to “get on board or get run over” was just too much for a philosophically blind, pragmatic group of businessmen to overcome.

"So, in answer to the title question above, the answer is clear. What President Barack Obama hailed as "a watershed event" was coerced out of private industry by brute governmental threats. I doubt that most Americans understand the gravity and enormity of the shift away from the rule of law that has taken place over the past year under two administrations, which is now accelerating."

Two recent events have offered us a window into the scary workings and nature of a mixed economy government shorn of any guiding political principles. The first offers a lesson in making a deal with the devil, rather than taking a principled stand. The second illustrates the essentially tyrannical nature of our mixed economy welfare-regulatory state, and what happens when a private company steps on the toes of politicians wielding arbitrary power.

Paul Hsieh reports at FIRM (Knife In The Back) on a Wall Street Journal article entitled The Innovation Tax: How Max Baucus knifed the medical devices industry. Quoting from the article:

... Convinced by the White House that legislation was inevitable, most of the health-care lobbies decided to negotiate and pay ransoms so Democrats would spare their industries greater harm. Sure enough, the device maker lobby, AdvaMed, was among the "stakeholders" that joined with Mr. Obama in a Rose Garden ceremony in May and pledged to "save" $2 trillion over 10 years to fund his program.

But the word on Capitol Hill is that AdvaMed's tribute wasn't handsome enough for Mr. Baucus's tastes. The massive new tax [the $40 billion "fee" that Mr. Baucus wants to impose on medical devices and diagnostic equipment]—which wasn't a part of any of his policy blueprints released earlier this year—is in part retaliation.

Old Washington hands are saying the device lobby made a "strategic mistake" by not offering Mr. Baucus more protection money, but the real mistake was trying to buy into the ObamaCare process, instead of trying to defeat its worst ideas outright. (Hsieh’s emphasis).

The damage done by the industry’s attempt to curry favor with the administration goes well beyond the Baucus plan’s innovation-killing tax on their business success. By giving a much-needed boost to Obama’s plans for a government takeover of American medicine, they in effect stabbed the American people … including their own customers … in the back. Had they taken a principled moral stand in defense of their rights, Obamacare likely would be in even deeper trouble than it is now … if not dead.

But as I wrote back on 6/1/09, :

"One thing is certain. When the most prominent victims of an advancing tyranny fail to speak out, for whatever reason, the chances of stopping the onslaught are almost nil. And I do believe that fear is the prime driving force."

So what might have been the result had AdvaMed and the other industry representatives taken a firm stand against today’s political leadership? A good example of why fear drives American businessmen into the arms of their own destroyers is currently on display in a case involving Humana Inc. According to a Wall Street Journal article:

The Centers for Medicare and Medicaid Services launched an investigation into Humana Inc.'s effort to enlist beneficiaries to fight proposed cuts to Medicare's private plans.

The investigation, launched Friday, is looking at whether Humana, one of the largest providers of Medicare Advantage plans, violated marketing rules by sending letters to beneficiaries in Michigan, Florida and other states urging them to contact lawmakers to register their opposition to proposed cuts.

The letters state that "millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable" -- a claim congressional Democrats say is false.

Senate Finance Committee Chairman Max Baucus (D., Mont.) -- whose proposal to overhaul the health-care system would cut payments to Advantage plans by $123 billion over 10 years -- pushed for the investigation.

Humana is a major participant in a government-run program, which means it must follow strict government marketing rules. Those marketing rules are now being used to silence opposition to proposed legislation by the senator who crafted the legislation, Senate Finance Committee Chairman Max Baucus.

"[Humana's] tactics do a disservice to beneficiaries by spreading false claims about such an important bill in Congress", Baucus spokesperson Erin Shields blustered. We’re only "cutting the fat [$123b worth!] from the profits of private health plans that deliver Medicare…”

"Funding cuts of that magnitude would result in lower benefits, higher premiums and fewer choices for many of the 10 million Americans in Medicare Advantage plans," Humana spokesman Tom Noland said.

This is an example of how the mixing of government (the realm of legalized force) and the private economy (voluntary production and trade) opens the door to far-reaching threats to all liberty. In this case, the First Amendment is being attacked under the guise of “marketing rule” violations. Writes Don Watkins at Voices for Reason:

The implication is that Humana must be investigated for in effect defrauding its customers by misleading them about the nature of Baucus’s proposal. But what did Humana’s “fraudulent” claim consist of? Well, no one disputes the fact that the budget for Medicare Advantage could be slashed under the health care bills now in Congress. The dispute is over the effects this will have. Humana claimed it could potentially lead to some of its customers losing benefits—not an unreasonable view—but Baucus insists “The health care reform bill we released…strengthens Medicare and does not cut benefits.”

Think for a moment about the mind-numbing complexity of today’s laws... Then: think of what it would mean for politicians—hardly notorious for their scrupulous honesty—to be able to punish Americans because our claims about the effects of a proposed law conflict with their assertions.

In a free country, it is not a crime to question the claims of one’s political leaders. If Baucus’s action is allowed to go unchallenged, however, free speech is gravely threatened.

To be sure, our leaders will insist that the rest of us have nothing to worry about, that Humana is a special case, and that everyone else will remain free to criticize the government. Don’t bet on it. If the government can suppress the political speech of Humana because it opposes those in power, it can suppress the speech of any corporation, and if it can suppress the speech of a corporation (which is nothing more than an association of individuals), then there is no reason in logic why it cannot do the same to individuals.

Whatever one’s views on health care, it should go without saying that nothing could be more dangerous than allowing government representatives to get away with bullying and silencing those who challenge their claims. (Emphasis added.)

One might say that Humana doesn’t have to take Medicare patients, and one would have a point. But the same could be said of a whole myriad of issues relating to government involvement, from collecting unemployment benefits to taking a government job. The same principle will apply: Medicare is a compulsory government program, funded by taxes, and administered by “public servants” funded by taxes. Humana is a group of tax-paying individuals who are in the healthcare business, and thus have a right to participate in it. Does this mean that they forfeit the moral right to criticize it?

The problem for Humana is that they give ideological support to “healthcare reform”. So their situation is morally ambiguous, to say the least. Still, they have a right to speak out without political bullying, in my opinion.

Baucus’ brazen act of intimidation is being perpetrated in the open. As I showed in my post of 8/20/09, the politicians have innumerable ways to pressure private business. Considering the enormous control our government has over the American economy, imagine the hidden pressures, veiled threats, implied warnings, expressions of “concern”, etc., by politicians that must go on behind the scenes to bully American enterprise. It’s a scary thought.

It’s also a good example of why we need the separation of economics and state … i.e., capitalism.

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