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“Health Summit Starting Point: Ban Three Bad Ideas”

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The regular Monday morning column from Clark Judge has become a Tuesday column because of the snows in D.C.:

Health Summit Starting Point: Ban Three Bad Ideas
By Clark S. Judge, managing director, White House Writers Group ( <> )

How bad have the last few weeks been for Mr. Obama’s White House?

You can keep the score in headlines and magazine covers.

Covers? My favorite is The New Yorker’s, with the President in three cartoon panels walking across the water. In the fourth he’s falling in.

Headlines? Take this one from Monday’s Washington Post, “A year later, where did the hopes for Obama go?” Or as the Financial Times put it, for a story that in good British fashion blamed the courtiers (in this case, four senior advisors) and not the king, “As Barack Obama struggles to put his presidency on track, concerns are growing….”

No kidding.

As part of his self-revival tour, Mr. Obama has called a health care summit to, he said, “to go through systematically all the best ideas that are out there and help move it forward.”[# More #]

Here is a better idea. How about going through all the worst ideas first, and make sure we don’t move backwards?

Here are three bad ideas that should be removed from the table right away.

Bad idea #1: Federal mandates, as in employers are mandated to buy health insurance for all employees or else, or all of us are mandated to buy insurance for ourselves or else.

Outside of the obvious areas of criminal behavior, “or else” has no place in the vocabulary of the government of a free people. A major source of opposition to all of the plans that the president and his allies have tabled has been their compulsory character.

This is a matter of personal freedom. If I don’t want health insurance, nobody should be telling me to buy it. It is also a matter of a more subtle form of government control.

Consider this: if the government mandates the purchase of health insurance, it must also decide what features satisfy the mandate. In other words, mandates are the public option without the money. The government will decide what you are to do and through mandates how much you are to pay.

Then, too, experimentation that is the hallmark of a successful marketplace will be cut off, as every new idea must pass through an administrative approval process. Short cycle times (try, discard, try again, keep cooking until done) are an essential feature of a creative marketplace. Federal mandates will effectively kill that feature in the insurance marketplace, as state mandates in many places already have.

Bad idea #2: Using state mandates as a barrier to creation of a national insurance market.

In global trading negotiations, the kinds of state mandates we have in health care are known as “non-tariff trade barriers”. For example, the European Union and the Japanese in particular have been famous over the years for creating regulations that effectively ban products of other countries from being sold within their borders. They had nothing on American states.

It is not that states should not be free to set standards. But if a company is licensed to do business in one state, it may do business in all states. The same rule should apply to insurance policies.

The president often portrays this way of doing business as a way of allowing insurers to get away with bad practices. Actually, it is a way of making each state hear the will of its people, not of its special interests. If California-compliant plans are more popular in Massachusetts than are Massachusetts-compliant plans, won’t that tell something to Massachusetts regulators and legislators? Establishing national competition among insurance companies is only half the reason for creating this kind of national market. The other half is establishing competition among the states.

Bad idea #3: Breaking the link between paying for health services and receiving health services.

This link is already broken, of course. And that breaking is a major – perhaps THE major – reason for health care inflation (including inflation in health insurance prices) in the United States.

If health reform does nothing else, it should repair the link, putting each of us in control of the coverage and services we receive and giving us the responsibility and reward of buying prudently. This is the point of health savings accounts, of providing individuals with the same tax benefits that companies receive when buying health insurance, of freeing us each to own our health plans rather than attaching the plans to our jobs.

Most unions have an institutional aversion to the concept. Collective control in any form enhances the power of their leaders. But union leaders form another special interest to which true reformers will need to stand up.

With those bad ideas off the table (I am assuming that a bad idea called the public option is already gone), constructive discussion of health reform can begin. If the administration refuses, one thing will be all but certain: the president will be headed for a second year in office as problematic as his first.


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