Recent polls show that senior citizens oppose the current federal health care legislation by about a 2-to-1 margin. Because practically all of these people are on Medicare, meaning the government already pays for most of their medical expenses, some have argued that opponents of federalized health care from this demographic are hypocrites (see here, here, here and here).
A recent example was this Newsweek article, "What Government Takeover?" Senior Editor Daniel Gross wrote, "There have been lots of absurdities in the debate — such as it is — about health care reform. There's the hypocrisy of people dependent on government-run health care complaining about government-run health care."
For two specific reasons the hypocrisy claim fails. First, seniors don't have a choice. Every American is forced into Medicare at the age of 65. Whatever health insurance policy one had before goes away. If a person refuses, they take away the Social Security checks that most people have paid a 12.4 percent payroll tax toward for decades.
Second, Medicare has been on the books since 1965, and every worker pays a 2.9 percent payroll tax for it as well, so jerking the rug out from under current beneficiaries would be immoral. In contrast, stopping a major new entitlement before it starts is a perfectly reasonable position.
Medicare is similar to Social Security — everyone pays in, and everyone eventually gets benefits. (That the current contribution vs. benefit structure of both programs make them fiscally unsustainable is a separate issue.)
There is another segment of the population that benefits from government-provided health coverage: Medicaid recipients. Medicaid is a welfare program that provides subsidized health care for the poor. As such, it affects only a minority of the population.
The majority of Americans — 176 million of us — get our health insurance from employers. Another 25 million buy insurance in the individual market. Some 80 million are in the two big government plans — 41 million in Medicare and 39 million in Medicaid.
Proponents of President Obama's plan contend that the overall health care system would work better if everyone's care was provided or paid for by a government system. Yet they have it exactly backwards: It is only because the government programs affect a minority that they are viable.
Consider an analogy: Nearly everyone supports some level of food stamps for the poor, but they only make up a small portion of the food market. Yet aside from a few ideologues, no one argues that the "food system" would deliver better value and operate more efficiently if it were run by the government.
Similarly, most Americans agree that our economy can sustain some level of public-sector employment, but this is hardly an argument for a government takeover of the entire private-sector workforce.
If anything, the publicly funded health care programs illustrate the dysfunctions that follow from government having too much of the market. Medicare has $38 trillion in unfunded liabilities. Medicaid shortchanges health care providers on their reimbursements to such an extent that an increasing number of physicians refuse to accept any Medicaid patients — 15 percent and growing in Michigan. Medicare also shortchanges providers, and has been rejected by some major medical centers like the Mayo Clinic's primary-care facility in Arizona.
Our current health care system is a certainly a mess, largely due to the skewed incentives on providers and consumers generated by decades of misguided public policies. The worst dysfunctions are in those parts of the system where the government currently has the most control. This is hardly an argument for giving it control of all the rest.
Jarrett Skorup is the research associate for online engagement for Michigan Capitol Confidential at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.