An Introduction to Health Care Reform , Page 1 of 8

An Introduction to Health Care Reform

Ian Hugh Patterson
ipatterson@gmail.com
9/11/09

The health care reform debate happening right now is so contentious because it
involves potentially massive changes in the role of government in our personal lives.
Many Americans are simply unaware of what is happening and the decisions being
made by their government right now. This document is meant to be a brief primer on the
health care reform debate, as well as an argument for why ObamaCare is the wrong
solution for a very real problem.

So what’s the big problem with our health care system today?

Pretty much everyone agrees that our current health care system needs reform. Many
people cannot afford coverage. The cost of businesses providing insurance to their
employees is increasing at a rate four times that of inflation, eating into profits and
making many businesses go belly up.1 People with preexisting and chronic medical
conditions have a hard time getting insurance because the system is built in such a way
that companies cherry pick only the healthiest customers to keep their profits up. And
lastly, even though we are #1 in the world for quality of medical care, we pay twice as
much as any other nation for that care.2 That cost is making it hard for our businesses to
compete internationally, and is bankrupting many families.

Advocates of ObamaCare frequently say that 46 million people in America are

uninsured, but the vast majority can afford health care but simply choose not to buy
insurance, and almost a quarter of that number are illegal immigrants. The number of
Americans who are truly in need, cannot get coverage, and have no alternatives, is
around 11 million—only 4% of Americans.3 That number is still significant because it
represents real suffering and tragic hardship—those 11 million people need our help—
but 11 million is a far cry from the 46 million ObamaCare advocates claim. Our system is
limping badly, but not on life support.

1National Coalition on Health Care. (2009). “Health Insurance Costs.”

http://www.nchc.org/facts/cost.shtml
2Atlas, Scott, “10 Surprising Facts about American Health Care.” The National Center for Policy Analysis,
March 24, 2009, http://www.ncpa.org/pub/ba649
3Weeks, B. (2009). “Uninsured count needs explanation.”
http://wichitaliberty.org/health-care/uninsured-count-needs-explanation/
 An Introduction to Health Care Reform , Page 2 of 8

Choose your flavor of government: Big or small?

There are two opposing approaches to solving these significant problems. The first is a
free market solution that encourages change without reducing consumer choice or
increasing government control over your health care.4 The Patient’s Choice Act of 2009,
which takes this approach and has a lot of potential, was actually written and introduced
before ObamaCare but is getting no press. This approach is a conservative, small
government one. It is not in favor right now because liberal Democrats have a majority
of votes in Congress and a Democratic president right now—they believe larger
government is the only solution.

Therefore, the second option is what has traction right now—Obama’s health care
proposal, H.R. 3200. Obama supports a “single-payer” system of health care, which
would eliminate all private health insurance providers in favor of a completely
government run system that provides universal coverage for everyone. He doesn’t have
enough public support for such a radical government power grab at this moment,
however, so he instead is proposing that the government create a “public option” for
health care which would compete against private insurers to “create
competition.” (Public option means a government run health plan alternative to private
insurance.) He has publicly stated that this “public option” is a stepping stone transition
to eliminating private insurance entirely, but will take a decade or so to work.5 In other
words, he is not at all interested in competition—a public option is a means to an end,
the end being universal government control of your health care. Private companies
simply cannot compete against the government, which has an unlimited ability to print
its own money to stay running, even with bad service.

Government bureaucracy: Innovating tomorrow’s problems today

So why would a government take over of health care be bad?

First, the government has a long track record of creating worse solutions than private
companies: Medicaid is broke, Medicare is insolvent and a model of how to waste
money, the Post Office is broke, Social Security is collapsing, Freddie Mac and Fannie
Mae nearly bankrupted our entire economy last year through bad business practices,
and thanks to Congress our national deficit is on track to double to around $14 trillion
during Obama’s presidency. That’s not a good track record. Researching Medicare
alone, a current government run health care plan, shows massive fraud, waste on a

4CATO Institute, “What is the Free-Market Approach to Health Care Reform?”

http://healthcare.cato.org/free-market-approach-health-care-reform

5“I don’t think we’re going to be able to eliminate employer [health care] coverage immediately. There’s going to
be some transition process. I can envision a decade out or 15 years out or 20 years out where we’ve got a much more
portable system.” -President Obama at SEIU Health Care Forum, 2007
 An Introduction to Health Care Reform , Page 3 of 8

grand scale, and studies show it offers lower quality care than even the cheapest
private insurance options.6

Universal health care is a failing experiment elsewhere

Second, universal health care in Europe, Australia and Canada is already a proven
failure. Studies show government run health care produces lower quality care, longer
wait times, increased death rates from cancer and other diseases, less innovation, and
a massive majority, 70% of people under these systems, say that it’s broken and needs
fundamental change.7

Third, government control of your health care means less choice for you and a potential
loss of privacy down the line. If the government takes over health care (progressively
via a “public option” or immediately via “single-payer”) our experiences will probably
parallel those in Canada, UK, and Germany. ABC’s 20/20 news program recently looked
at Canada’s care levels and found patients waiting months for life saving procedures,
which often drove them to come to America for care instead.8 In other words, if the
government run plan is broken, you have no alternatives and no choice.

As hard as it may be for us to believe, the government run health care system in the
United Kingdom has begun installing cameras in people’s homes without their
permission to monitor their parenting.9 Many patients there wait months for important
care, government authorization to get a wheel chair, or access to critical diagnostic tools
like MRIs and CT scans. More government control under programs similar to
ObamaCare has resulted in lower quality care, violations of privacy, longer wait times,
and increased death rates from treatable diseases.10

ObamaCare’s wide open door for privacy violations

There is language in ObamaCare that is frighteningly broad, potentially allowing for

these same kinds of huge violations of your privacy, right here in America.11 Such

6 Gottlieb, Scott, “What Medicaid Tells Us About Government Health Care,” The Wall Street Journal. January 9, 2009,
http://online.wsj.com/article/SB123137487987962873.html.

7Cathy Schoen et al., “Toward Higher-Performance Health Systems: Adults’ Health Care Experiences In
Seven Countries, 2007,” Health Affairs, Web Exclusive, Vol. 26, No. 6, October 31, 2007, pages w717-
w734.  Available at http://content.healthaffairs.org/cgi/reprint/26/6/w717.
8 http://www.facebook.com/ext/share.php?sid=142514258293&h=_ddCD&u=nDKM9&ref=mf
9Little, Alison. (2009). “Sin bins for worst families.” Daily Express.
http://www.express.co.uk/posts/view/115736/Sin-bins-for-worst-families
10Atlas, Scott, “10 Surprising Facts about American Health Care.” The National Center for Policy
Analysis, March 24, 2009, http://www.ncpa.org/pub/ba649
11 Liberty Counsel’s Analysis of H.R. 3200. http://www.lc.org/index.cfm?PID=19319
 An Introduction to Health Care Reform , Page 4 of 8

statements include one that authorizes government nurses to visit your home and
determine what is necessary for “improving maternal or child health and pregnancy
outcomes or increasing birth intervals between pregnancies.” 12

Such broad language does not protect your rights, it leaves the door wide open for
abuse. That phrasing is so open to interpretation that it’s possible for the government to
decide how many children you should have, and whether or not you should keep a
pregnancy. It could even allow for compulsory abortions or forced population controls in
the United States, as in China. If you think that sounds like scaremongering, you should
know that Obama’s lead science advisor, John P. Holdren, literally wrote the book on
forced sterilization and compulsory abortions as a means of population control.13 Not
only that, but he also stated that he believes such measures are acceptable under the
Constitution. If Obama appointed a scientist with such well known radical views, why
should he hesitate to include such allowances in his reform bill? It’s not a mandate for
such violations of your rights, but it is a massive loophole, of which there are many in
the over 1000 convoluted pages of H.R. 3200.14

Abortion: Universal “basic care” for all Americans

Fourth, universal abortion coverage is included in ObamaCare, despite Obama’s

repeated statements that such claims are “fabrications.”15 Even the mainstream press
says Obama is lying to Americans by claiming otherwise.16 If it passes, all private
insurance companies will be required to provide abortions as “basic care.” 17 This is
despite the fact that 69% of Americans don’t want the government paying for abortions
or even for their insurance to provide it.18

ObamaCare would cause a 25% increase in abortions

12 H.R. 3200, Sec. 1713, Pg. 768, Lines 3-5

13Abrams, Joseph. (2009). “Obama’s science czar considered forced abortions and sterilization.” Fox
News.
http://www.foxnews.com/politics/2009/07/21/obamas-science-czar-considered-forced-abortions-
sterilization-population-growth/
14 See “Liberty Counsel’s Analysis”
15 http://www.facebook.com/ext/share.php?sid=254591935525&h=pZDFv&u=HWUDT&ref=mf
16Alanso-Zaldivar, Ricardo. (2009). “Abortion coverage allowed in health care legislation.” Associated
Press.
http://www.huffingtonpost.com/2009/08/05/abortion-coverage-allowed_n_251605.html
17 President Obama’s speech at the Planned Parenthood Action Fund, July 17, 2007.
http://www.youtube.com/watch?v=uUl99id2SvM
18 November 2008 Zogby poll
 An Introduction to Health Care Reform , Page 5 of 8

Studies show that 25% of women who would have an abortion if it were paid for by the
government instead decide to keep the baby 19. That means our nationwide abortion
numbers are at least 25% lower because of the ban on tax funding of abortions.

Abortion advocates’ own research showed that if government funded abortions became
available, the abortion rate would go up by 28%! And that study was done by
Guttmacher Institute, the research wing of Planned Parenthood itself.

The bottom line is that by effectively bypassing the current funding bans, ObamaCare
could result in a 28% higher abortion rate, which translates to an additional 300,000
babies aborted per year.

Economic impacts: Tax hikes and lower wages all around

Finally, the economic impacts of Obama’s plan could be devastating. The plan will be
massively expensive—in the trillions range—and ultimately you, the tax payer, will be
funding it. Forbes Magazine says the plan will be paid for by cuts in Medicare for
seniors, alongside big tax hikes on businesses and the wealthy.20 These new taxes will
effectively be passed on directly to middle-class workers in the form of lower wages.

First, the wealthy—those earning $400k/year or more—would have their tax rate raised
to 40%, taking money out of new businesses and investments. Then businesses who
refuse to provide the government option to their employees would be taxed at 8% of
their payroll, in addition to other “surcharges.”21

What do companies do when they earn less money? They lower wages and reduce
work forces to survive. That means ObamaCare ultimately raises taxes on all Americans
by way of reducing wages and increasing unemployment. So who is going to pay for
this massive expansion in government power? You will, by having less money in your
pocket every month.

If businesses do decide to provide the government option, they will lose collective
purchasing power for buying their own private insurance, meaning it’s only a matter of
time before everyone getting insurance through their business will have to switch to the
government plan, where they’ll have no choice of doctor or their coverage levels. Again,
private insurers cannot possibly compete against the government on these terms,
eventually resulting in a universal single-payer system with fewer choices for you.

19 http://www.rhrealitycheck.org/blog/2009/08/04/politics-distorts-facts-impact-abortion-coverage
20 ObamaCare: Who Gets Hit and How Hard, July 22, 2009.
http://www.forbes.com/2009/07/22/health-care-reform-business-washington-tax.html
21 What Financing ObamaCare means to Your Business, August 4, 2009.
http://oregontaxnews.com/2009/08/04/what-financing-ObamaCare-means-to-your-business/
 An Introduction to Health Care Reform , Page 6 of 8

Practical alternatives to ObamaCare

The choice is not between doing nothing or passing ObamaCare—there are alternatives
to ObamaCare out there. The Patient’s Choice Act of 2009 (PCA) offers sound reforms,
focusing on increasing patient choice, strengthening doctor-patient relationships,
increasing competition through simple changes, and incentivizing insurance companies
to lower the number of uninsured. It uses creative, small-government solutions to lower
costs and put control of your insurance options squarely in your hands instead of those
of a bureaucrat.

Giving you control by putting money back in your pocket

The best way to create competition, lower costs, and get more people insured, is to put
educated consumers back in the driver’s seat with the power to choose and money in
their hands. The PCA would do just that, by giving individuals a $2300 tax credit and
$5700 to families that can be spent on health insurance and care. President Obama’s
own economic advisor, Jason Furman, endorses this idea, saying it has “the potential to
expand coverage and reduce inefficient spending at no net federal cost.”22 Combining
this tax credit with the creation of a consumer-friendly, one-stop marketplace for health
insurance shopping and authorizing insurance companies to compete across state lines
could reawaken competition in the land of slumbering insurance giants, resulting in
lower costs, greater patient choice, and fewer uninsured Americans.

Guaranteeing access to care for those with preexisting conditions

Even though these simple measures will significantly lower insurance costs for all
Americans, helping many more to afford insurance, there will still be a large number of
Americans who want health insurance yet cannot afford it or have preexisting conditions
that get them turned down by insurance companies. Our health insurance system must
work for everyone, every time, especially those in poverty and those suffering from
chronic illness.

The first step in helping Americans with current medical conditions is requiring that
insurance companies play fair. Under our current system, insurance companies cherry
pick only the healthiest patients because doing so keeps their costs down and profits
up. The PCA would fix this imbalance in two ways. First, it would guarantee access to
care for everyone by requiring that insurance companies offer coverage to any
individual, regardless of age or health history. However, this requirement is only
practical if insurance companies receive some incentive for taking potentially high-cost

22 “Furman, Jason, “Health Reform Through Tax Reform: A Primer,” Health Affairs, May/June 2008,
http://content.healthaffairs.org/cgi/content/abstract/27/3/622
 An Introduction to Health Care Reform , Page 7 of 8

patients. Therefore the PCA’s second key to guaranteed care is to establish an

independent board that would reward companies taking patients with preexisting
conditions and penalize those avoiding them—a concept that is already successful in
Switzerland and Holland.23 This step would guarantee access to care for everyone and
even incentivize insurance companies to compete for these patients because doing so
would give them a competitive advantage.

Providing care for the very poor

To help the very poor, the existing Medicaid program can be renovated and simplified to
guarantee their access to care. Medicaid already provides health care to many very low-
income Americans, as well as those with disabilities. In fact, many of the people who
currently qualify for Medicaid have not enrolled, simply because the process of enrolling
is so complicated. A more patient-friendly and efficient Medicaid system that provides
direct financial aid to those in severe need, along with practical guidance in purchasing
the right insurance plan, would guarantee that those in severe need receive quality
care. Establishing an auto-enrollment system for these individuals could ensure that no
one qualified for assistance is left out, resulting in near universal levels of coverage.24

Conclusions

Clearly there are very viable ways to reform our present system that do not involve the
potentially disastrous big government approach of ObamaCare. The Patients Choice
Act would enact simple yet powerful market reforms that would ensure that every
American has access to affordable and effective health care. On the other hand,
ObamaCare’s approach would effectively raise taxes on all Americans by lowering
wages, eliminating healthy competition, and initiating a government takeover proven to
result in far worse medical care than we have right now.

If you’re interested in learning more about the Patient’s Choice Act of 2009, you can find
a brief summary of its proposals here:
http://www.house.gov/ryan/PCA/PCAsummary15p.pdf

23 Leu, Robert, et al., “The Swiss and Dutch Health Insurance Systems: Universal Coverage and
Regulated Competitive Insurance Markets,” The Commonwealth Fund, January 16, 2009.
http://www.commonwealthfund.org/Content/Publications/Fund-Reports/2009/Jan/The-Swiss-and-Dutch-
Health-Insurance-Systems-Universal-Coverage-and-Regulated-Competitive-Insurance.aspx
24 Jeffrey Liebman and Richard Zeckhauser, “Simple Humans, Complex Insurance, Subtle Subsidies,” National Bureau of
Economic Research working paper, September 2008, http://www.nber.org/papers/w14330.
 An Introduction to Health Care Reform , Page 8 of 8

What can I do to make a difference?

Voice your opinion! The groundswell of opposition to ObamaCare over the past months
has been impressive and continues to grow. Most politicians only care about getting
reelected, but they will listen if massive numbers of their constituents say they do not
want ObamaCare and will not vote for any politician who supports it.

Go online and find out who your representatives are in Congress. Call their office to
voice your opinion and be sure to tell them this is an issue that will determine whether
you vote for them in future elections. Send emails or fax letters as well, although phone
calls are probably most effective.

Finally, consider talking to your friends about this important issue. It is difficult to sort
through the media spin on this topic, which is why I have tried to carefully cite sources
for my arguments in this primer. Keep your discussions on this topic factual, respectful,
and honoring—this is a very emotionally charged issue for some people. Let the facts
speak for themselves and encourage people to do their own independent research.

By making our voice heard and bringing the facts to bear, we can bring about a set of
real reforms that will help millions of people and serve Americans well for generations to
come.