Redistributing health care

Alan Reynolds:

PROPONENTS of compulsory, government-designed health insurance can't seem to understand why others disagree. Perhaps the public is realizing that these proposals are fundamentally about redistributing health?

Health-care "reform," that is, aims to shift costs and benefits of health insurance from some groups to others. And the losers are turning out to be less docile than politicians had hoped.

All the leading proposals involve massive redistribution from people with healthy lifestyles to those who take more risks. As the Congressional Budget Office explained, "Premiums in the new insurance exchanges would tend to be higher than the average premiums in the current-law individual market . . . because the new policies would have to cover pre-existing medical conditions and could not deny coverage to people with high expected costs for health care."

That is, because the politicians want people who've already fallen ill to be able to buy insurance at the same rates as the healthy, rates would rise for everyone who has insurance now. That's why the bills would all force healthy people to buy this overpriced insurance, under threat of fines or prison.

There would also be redistribution from people with employer-paid insurance (particularly in risky jobs with high premiums) to those who would be induced to shun such benefits in order to qualify for taxpayer subsidies.

By far the largest redistribution, however, is from those on Medicare to those who'd become newly eligible for Medicaid or federal subsidies.

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There is more.

This is an interesting way of framing the issues and it is one that the Democrats will have trouble with. At its heart it explains the angry reaction of the Town Hall protesters as they learned what the Democrats had in mind.

The GOP needs to embrace this argument. They may not be able to stop this obamination, but they can prepare the election battle space of the 2010 election.