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Health Freedom Watch
November 2008

Contents:


Preparing for Healthy Debate
By Sue A. Blevins

As the government moves forward with helping people to access health care and to lower costs, there is going to be a lot of debate over reform.  Informed decision-making and a constructive debate will depend on citizens understanding the ramifications of proposed policies.  To that end, the Institute for Health Freedom (IHF) will educate readers about how proposals could affect their freedom of choice and privacy.  Given our nation’s constitutional purpose of protecting liberty, it’s vitally important that we stand firm in defending this value and not cave in to political correctness at this critical juncture in history. 

IHF certainly doesn't want to stop those who wish to hand over their health-care decision-making power to others (to government and/or the insurance industry).  But at the same time, we will continue to defend the freedom of those who want to maintain their right to pay privately for health care and uphold confidential doctor-patient relationships (and private relationships with other providers).  There are plenty of Americans who deeply value self-government and individual decision-making (vs. collective decision-making) when it comes to health care, and we support these long-standing rights.

We hope you will be an active participant in the upcoming debate over who’s going to govern personal health-care decisions.  You are welcome to use information at IHF’s website so long as you credit the source.  IHF welcomes you to share our analyses with others—your family and friends, policymakers, and the media.  Feel free to link to our work or cut and paste information when blogging.

We’re looking forward to an informed and healthy debate on ways to ensure that the precious rights of private contracts and confidentiality are upheld, as reforms for helping those in need move forward.

Sue A. Blevins is founder and president of the Institute for Health Freedom in Washington, D.C.

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“Broad” Adoption of Electronic Health Records Forthcoming  

President-elect Barack Obama is planning to pay for his forthcoming health reforms with projected savings from widespread adoption of electronic health records and by “allowing federal tax cuts to expire for those earning more than $250,000 annually,” according to a November 10 BNA’s Health Care Policy Report. Obama’s campaign estimated that the health-reform initiatives would cost between $50 billion and $65 billion annually.  He plans to expand Medicaid to more low-income individuals, provide health-insurance premium subsidies on an income-based sliding scale, create a health-insurance tax credit for small employers, and establish a federally funded reinsurance program to cover catastrophic costs for individuals, the report states. 

Obama’s campaign website states, “A key feature of Barack Obama and Joe Biden's health care plan is the use of health information technology to lower the cost of health care. Most medical records are still stored on paper, which makes them difficult to use to coordinate care, measure quality, or reduce medical errors. Processing paper claims also costs twice as much as processing electronic claims. Barack Obama and Joe Biden will invest $10 billion a year over the next five years to move the U.S. health care system to broad adoption of standards-based electronic health information systems, including electronic health records.” 

The campaign website also promises he’ll “safeguard our right to privacy.”  It emphasizes that “The open information platforms of the 21st century can also tempt institutions to violate the privacy of citizens. As president, Barack Obama will strengthen privacy protections for the digital age and will harness the power of technology to hold government and business accountable for violations of personal privacy.”  This sounds promising, but details will matter greatly when it comes to health-privacy protections.  As informed readers know, the existing HIPAA (Health Insurance Portability and Accountability Act) privacy rule doesn’t give individuals final say in who can access their electronic medical records, but instead legally permits personal data to be shared—without consent—for purposes related to treatment, payment, or management of the health-care system.  Until individuals have the right to decide if and when their health information is shared, they don’t have a true right to privacy. 

Thus before any health reforms are enacted Obama should restore the right to withhold consent under the HIPAA rule.  Without that, broad adoption of electronic medical records would further weaken the privacy rights of all citizens.  

Note:  See “What Every American Needs to Know about the HIPAA Privacy Rulewww.forhealthfreedom.org/Publications/Privacy/PrivacyUpdatedNov2008.html for understanding how the current HIPAA rule came about.

Sources:

  • “Reform Proposals: Health Reform, SCHIP, Medicare Top Health Care Agenda, Analysts Say” by Steve Teske, BNA's Health Care Policy Report, November 10, 2008.
  • “Science, Technology and Innovation for a New Generation” Obama-Biden campaign website, 2008.
  • “What Every American Needs to Know about the HIPAA Privacy Rule,” Institute for Health Freedom, November 2008:  www.forhealthfreedom.org/Publications/Privacy/PrivacyUpdatedNov2008.html

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Media Watch: Important Facts about Medicare and its “Socialized Medicine” Label  

In a November 9 Washington Post op-ed, Senator Ted Kennedy (D-MA) emphasized that health reform can’t wait, writing:  

"President-elect Barack Obama has issued a clarion call for action on health care. His practical and thoughtful proposals draw from our Massachusetts experience and add important measures to improve quality and reduce costs…. I'm sure opponents will dust off the same old slogans they have used to try to block every major advance in health care. They will call it ‘socialized medicine’ and a ‘government takeover,’ just as they did when they opposed Medicare and the children's health program—and they are just as wrong today as they were then. Such advances are no more ‘socialized medicine’ than is the coverage available to George W. Bush, Dick Cheney and every member of Congress, subsidized by the American taxpayer.” (Emphasis added.) 

It is important to point out that there is a big difference between Medicare and the coverage provided to elected federal officials.  

  • The federal government imposes a huge financial penalty on seniors who decline enrollment in Medicare Part A (hospital insurance).  As IHF has been pointing out for several years, many people don’t know that when they apply for Social Security they will be forced to enroll in Medicare Part A or forgo their Social Security cash benefits. Once enrolled, the only way to get out of Medicare Part A is to pay back all the Social Security cash benefits they ever received, plus any money paid on hospitalization coverage. The federal insurance program available to the president, vice president, Congress, and federal employees doesn’t do this!  Thus there’s a big difference between the programs. 
  • Medicare restricts seniors’ freedom to pay privately for covered services.  Section 4507 of the Balanced Budget Act of 1997 penalizes physicians who accept private payment for Medicare-covered services. Any doctor who does so must stop seeing all Medicare patients for two years. The United Seniors Association challenged this rule legally, but the court avoided the issue, ruling only that noncovered services could be privately paid for.  In contrast, the Federal Employees Health Benefit Program (FEHBP) does not restrict the freedom to pay privately for covered services. 
  • Medicare's restriction on seniors' freedom to pay privately is similar to Canadians’ lack of freedom (it is illegal to pay privately for government-covered health-care services in most Canadian provinces).  Americans clearly consider the Canadian system socialized medicine. 

Additionally, regarding the cost of forthcoming health reform Kennedy writes, “Opponents also argue that the cost would be too high and that any such reform must be deferred because of the economic crisis. I reject that argument. It is painfully obvious that our health-care system costs Americans too much, costs employers too much, denies too much needed care and leaves out too many Americans. The rising cost of health care is clearly contributing to the troubled economy and needlessly strains family pocketbooks. Even worse, these costs are expected to climb higher, more than doubling in the next 10 years.” 

But before taking Kennedy’s remarks about rising costs seriously, here are some important historical facts IHF has previously emphasized:  

  • When Medicare was debated in 1965 (the year it was signed into law), business and taxpayer groups were concerned that spending might grow out of control. Single-payer advocates assured them that seniors could easily be covered with only a small increase in workers’ payroll taxes. The federal government’s lead actuary in 1965 projected the hospital program (Medicare Part A) would grow to $9 billion by 1990.  It ended up costing more than $66 billion that year! Even after adjusting for inflation and other factors, the cost of Medicare Part A (in constant dollars) was 165 percent higher than the official government estimate, according to the actuary who produced them. (In unadjusted dollars actual costs were 639 percent above estimates.)

  • Just three years after Medicare was passed, a Tax Foundation study found that public spending on medical care had nearly doubled. Consequently, Medicare payroll taxes and taxes in general increased over the years to pay for skyrocketing health-care costs. 

Let’s aim for an accurate assessment of the federal government’s role and impact on health-care costs over the years, especially Medicare.  Our nation’s financial health cannot afford more miscalculations regarding the true costs of a government takeover of health-care financing.

Sources:

  • “Health Care Can't Wait,” by Ted Kennedy, Washington Post, November 9, 2008.
  • “What Every American Needs to Know about Social Security and the Mandatory Medicare-Enrollment Policy: Government Imposes a Huge Financial Penalty on Seniors Who Reject Socialized Medicine,” Institute for Health Freedom, February 11, 2005.
  • “Appeals Court Rules in United Seniors Association v. Shalala,” Institute for Health Freedom, October 5, 1999.
  • "How Bad Were the Original Actuarial Estimates for Medicare's Hospital Insurance Program?" by Robert J. Myers, The Actuary, February 1994.
  • Tax Foundation study cited in "Medical Care Cost Doubles in 3 Years," New York Times, September 9, 1968, p. 47.
  • “An Unhealthy Tradition: Medicare Miscalculations,” by Michael F. Cannon, March 26, 2004.

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Arizona Proposition 101 Narrowly Defeated: 50.2 to 49.8 Percent

On November 10, Medical Choice for Arizona conceded defeat of Proposition 101, according to PolitickerAZ.com.  This was an initiative on the Nov. 4 ballot that would have amended the state constitution to ensure freedom of choice in health plans and the right to pay privately for lawful medical services.

The backers of the Freedom of Choice in Health Care Act, Drs. Eric Novack and Jeffrey Singer, said, "We regret that we were unable to overcome the significant financial disadvantage we had and the intervention of the Governor and a major state agency in the campaign. Regardless, we are proud of the effort we put forward and are looking forward to continuing to be a part of the health care reform discussion in our state well into the future."

Proposition 101 won in 12 out of 15 counties, but failed to pass statewide by the smallest of margins: 1,048,624 to 1,039,585 votes (50.2 to 49.8 percent). Consequently, there is already consideration for putting the idea back on the Arizona ballot in 2010. 

Sources:

  • “Prop. 101 Supporters Concede Defeat,” by Evan Brown, November 10, 2008, PolitickerAZ.com.
  • Arizona Secretary of State's Office, 2008 General Election Unofficial Results for Proposition 101 (as of November 18, 2008 4:16 pm).

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Health Freedom Watch is published by the Insitute for Health Freedom. Editor: Sue Blevins; Assistant Editor: Deborah Grady. Copyright 2008 Institute for Health Freedom.