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Health Freedom Watch
April 2009

Contents:


Recipes: Medical Tyranny or Medical Freedom

Given that Congress is poised to overhaul our nation’s health-care system this year, the Institute for Health Freedom (IHF) highlights two competing recipes that will produce very different outcomes.  IHF encourages Americans to consider which outcome they would prefer the 111th Congress to move our nation toward:  medical tyranny or medical freedom.  Take a look at these very different recipes for reform and their contrasting results:

Recipe for medical tyranny:

  • Add 1 federal mandate for health insurance (“everybody in, nobody out” policy).
  • Mix with health-insurance monopolies, oligopolies, monopsonies, and Blue-opolies.
  • Fold in a federal prohibition on private payment for services covered by health insurance and government health programs.
  • Combine with federal health board that “coordinates” health care and has final say over what services will be covered.
  • Serves all Americans tyrannical policies that limit their health-care choices.

Recipe for medical freedom:

  • Add 1 universal health-insurance tax deduction for every American (a refundable tax credit for those who have no tax liability; the deduction/credit would go directly to individuals, not insurers).
  • Mix with health-insurance competition (permit individuals to buy insurance products across state lines); provider competition (repeal monopolistic licensing laws); and tax deductions for providers and institutions that offer free care.
  • Fold in right to choose health insurance (forgo government programs such as Medicare if one so chooses) and right to pay privately for all health services, including those covered by insurance and government programs.
  • Combine with free-market concierge services and other “consumer advocate” services that encourage high-quality care.
  • Serves all Americans policies that will increase competition, lower costs, and improve freedom of choice in health care.

IHF encourages readers to cite the above health-reform recipes and/or write their own, and communicate them to policymakers.

Note: Economic terms cited above (monopoly, oligopoly, and monopsony) are defined online at (www.economist.com/research/economics/).

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Let These Seniors Go
By Sue Blevins

One of the most important issues policymakers will need to address when they debate health-care reform is patient freedom of choice, especially for America's oldest citizens.

Many people do not realize it, but government regulations severely penalize seniors who wish to keep their private health insurance, rather than enrolling in Medicare Part A, the government hospital insurance program, upon turning age 65. Little-known administrative policies adopted by the government in 1993 and strengthened in 2002 say that seniors can't refuse Part A coverage unless they give up their Social Security benefits. Adding insult to injury, once enrolled in the program, the only way seniors can withdraw from it is to repay all Social Security benefits they received, as well as any hospitalization benefits Medicare paid on their behalf.

To some, the controversy might appear to be much ado about little. After all, how many seniors want to pay for health coverage when Medicare is willing to pick up the tab?

In fact, a growing number of seniors want to continue their private health coverage instead of Medicare, and they should not be penalized for doing so because federal bureaucrats have decided they shouldn't.

Just as many parents choose to send children to private schools, though they pay taxes to support the “free” public education system, seniors should have the right to opt out of Medicare and pay privately for their healthcare.

There are many reasons to bypass Medicare beyond the simple fact that individuals simply should have this right.

For example, Medicare limits what services are available to seniors and denies payment for many claims. The Office of Medicare Hearings and Appeals, for instance, reports that 10 percent of the approximately 1 billion Medicare claims that government contractors process annually are denied.

Also, some seniors are serious about maintaining a confidential doctor-patient relationship, something more than the Health Insurance Portability and Accountability Act of 1996 provides. Yet Medicare claims routinely are reviewed by numerous sets of eyes, including outside contractors that help process the claims—hardly conducive to privacy.

Medicare was not intended to be forced upon seniors. When Medicare was created in 1965, Congress promised that the program would not interfere with seniors’ freedom to purchase and use private health insurance. That law, which remains unchanged, clearly says that “nothing contained in this title shall be construed to preclude ... any individual from purchasing or otherwise securing, protection against the cost of any health services.” Yet over the years the program has been regulated into becoming more of a trap than a safety net.

Government officials have no authority to strip seniors of the retirement benefits to which they are legally entitled simply because those seniors want the freedom to manage their own healthcare.

Hopefully the courts will end this abuse. Former federal employee Brian Hall and four other plaintiffs in Hall v. Leavitt, a lawsuit filed this past October, have asked the courts to strike down the government’s arbitrary and improper policies. The plaintiffs aren’t asking the government to refund the taxes they paid during their working years to finance Medicare. They simply want the right to say no to an entitlement “benefit” they don't want; they want the right to make their own healthcare choices and pay for what they want; and they want their Social Security benefits without being forced into Medicare.

The court should easily recognize that the law is on the plaintiffs’ side.

With Medicare Trustees reporting $34 trillion in unfunded liabilities over the next 75 years and possible bankruptcy by 2019, allowing those seniors who can and want to provide for their own health care to opt out of the program would save the system money, making additional resources available for those who actually need the benefits Medicare provides.

Let’s hope seniors’ health choices are upheld in Hall v. Leavitt so the great gift of freedom remains available for future generations.

Sue Blevins is president of the Institute for Health Freedom and author of Medicare’s Midlife Crisis.  This op-ed was originally distributed by McClatchy-Tribune Information Services and published by Detroit Free Press, Miami Herald (online version), and several other newspapers.

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Health-Insurance Mandate Leads to Government Control and Politicized Health Care
By Greg Scandlen


In reality a health-insurance mandate involves government, and government means politics.

For the past several years I have had discussions with friends who are free market stalwarts, but who tell me that maybe mandatory coverage wouldn’t be such a bad idea if the mandate was confined to a $20,000 deductible as Milton Friedman once proposed.  In economic theory, sure, everyone having a $20,000 deductible would make sense and then they could find various ways to finance the spending below $20,000—insurance, bank financing, etc.  But in reality a mandate involves government, and government means politics.  In making such an argument politically, you have conceded the point of mandatory coverage, leaving only the amount to be mandated in dispute.  The other side will take your concession and insist that a $20,000 deductible would disadvantage most people so must be lowered to (fill in the blank, maybe zero.)

Similarly with a Health Insurance Exchange.  The Heritage Foundation has long supported the idea of modeling the health insurance market after the federal FEHBP program.  I have always disagreed with them that FEHBP is a particularly attractive model.  It uses strict community rating, so doesn't even adjust premiums for geographical cost differences.  It adds another layer of regulation on top of the existing regulatory regimes of the states.  It applies subsidies that advantage more expensive plans and disadvantage less expensive ones.  And it is free to add expensive new mandatory coverages at the whim of bureaucrats without even legislative oversight….

But more important than all that, is that the idea concedes a fundamental principle and injects politics where there shouldn't be any.  Once you have accepted the idea that a federal bureaucracy should be responsible for structuring the entire market for health insurance, all bets are off.  You have given the politicians a new toy to play with.  Like kids in the sandbox, they will move the pieces around to suit their mood at the moment.

The consequences are already becoming clear.  The Heritage Blog currently is arguing with the Center for American Progress (CAP) about whether a “public option” would enhance or destroy “a competitive health insurance market.”  It starts out by quoting CAP—“Promoting choice among health insurance plans to reform a dysfunctional health insurance market is an idea that has been around for decades.  The Heritage Foundation has long advocated health reform modeled on the choices in the Federal Employees Health Benefit Program [FEHBP], which provides health insurance to federal employees.”

CAP then argues that having a public option, “offers an opportunity to create both competition and a new competitor in the health insurance marketplace.”

The rest of the Blog is Heritage's response, which amounts to whining about the Feds tilting regulations in favor of its own plan.  Well, duh!

But by supporting an FEHBP model, Heritage has already lost the argument.  It has given the Feds the power to tilt in favor of whatever it prefers at the moment—maybe HMOs this year, PPOs the next, and CD [consumer directed] Health the third, all dependent on who is in the White House and who is appointed to run OPM [Office of Personnel Management].

Greg Scandlen (greg@chcchoices.org) is a senior fellow of The Heartland Institute and founder and director of Consumers for Health Care Choices, a non-partisan, non-profit membership organization aimed at empowering consumers in the health care system: (www.heartland.org/CHCC/index.html).

Source: “Who Didn’t See This Coming?” Consumer Power Report, CPR #171, Consumers for Health Care Choices at the Heartland Institute, March 27, 2009 (reprinted with permission): (http://www.heartland.org/publications/consumer%20power/).

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Health Freedom Watch is published by the Insitute for Health Freedom. Editor: Sue Blevins; Assistant Editor: Deborah Grady. Copyright 2009 Institute for Health Freedom.