He Shouldn't Have Said It, but He was Right

South Carolina Congressman Joe Wilson is all over the news today for yelling “You lie!” during the President’s speech to a joint session of Congress. Given the forum it was disrespectful, wrong and he shouldn’t have done it. He has formally apologized to the President and the President has accepted his apology. However, the substance of his claim was right on the money. The President was not being truthful at that moment or during much of the speech for that matter. Let’s look at some of the claims made by the President and see if they hold any water.

My Plan – The first problem I had with the speech was that President Obama kept using the phrase “my plan.” As far as I can tell, he has never proposed an actual bill to Congress. I visited the website referenced during the speech last night and there is no plan there. There is only a list of promises he makes regarding health insurance. When actually challenged on the details of the primary health care bill in Congress, the White House and liberal pundits try and deflect criticism by pointing out that there is no bill on the house floor yet so the details are still being worked out.

No Illegal Immigrants will be Covered – This, of course, is the claim that led to Congressman Joe Wilson claiming that the President was lying. The President correctly points out that the current plan states that illegal immigrants will not qualify. However, the bill provides no mechanism for determining someone’s citizenship status. Republicans have tried to amend the bill to provide a way to actually prevent illegal immigrants from qualifying, but the Democrats have voted down their amendments. So the President’s position is that illegal immigrants are not allowed to be covered, but no action will be taken to prevent them from being covered.

You may also have noticed that the President has substantially reduced the number of uninsured from 47 million to 30 million. Why the change? Well, the White House said that it dropped 10 million from that number because they were illegal immigrants. Wait a minute; didn’t the President accuse his opponents of spreading lies about the plan? I guess their claim that the 47 million uninsured included illegal immigrants turned out to be true.

The Plan will Not Pay for Abortions – The primary bill under consideration does not state that the government plan will cover abortions. Rather, it is silent on this issue (and many others). From what I have read, it gives the Secretary of Health and Human Services the power to make decisions on what is covered and what is not. So if she decides to cover abortions, then they are covered. And once again, the Republicans have proposed amendments to the bill that would explicitly prevent the government from paying for abortions. But you guessed it, the Democrats have voted down any such amendment.

If You Like Your Health Insurance, You Can Keep It – Yes, the plan does not do away with private health insurance. However, if your employer decides that she can save money by putting the employees on the government run plan, then in fact you cannot keep your health insurance. This scenario is quite likely because the government run plan would almost certainly be subsidized by the taxpayers and therefore have the ability to under price private insurance carriers.

The Plan Will Not Add One Dime to Our Federal Deficit – (This is the claim from a President that is planning to double our national debt in just the next five years.) How does a bill that costs $900 billion not add a dime to our federal deficit? “Well,” says the President, “I’m going to cut a lot of waste in Medicaid and Medicare.” If he is aware of a way to cut $500 billion dollars in waste from Medicaid and Medicare, shouldn’t he cut that waste whether or not he gets his Obamacare plan passed? After all, Medicaid and Medicare are growing at an unsustainable pace and both programs are in serious financial trouble.

This Plan will Protect Medicare for Seniors – It is true that the current bill does not cut any benefits from Medicare. It only cuts Medicare funding by $500 billion. But not to worry seniors, the $500 billion we are cutting is only wasteful spending so it won’t impact you at all. You’ll have to forgive my skepticism, but every President claims that he will be able to cut the waste, but they are always short on specifics and never deliver on their promises.

“My guiding principle is, and always has been, that consumers do better when there is choice and completion.” – This is the line that gave me the biggest laugh. Right now it is illegal for you to buy health insurance outside of your own state. So if health insurance in your state is very expensive because the state requires the insurance companies to provide all sorts of benefits you don’t want (something the insurance companies love by the way), you are not allowed to buy from a state that offers a plan that meets your specific needs. So the simplest solution to increasing the competition that the President holds so dear is to allow us to buy insurance from other states (something we are allowed to do with car insurance). This would give everyone access to about 1,300 different insurance carriers, but the President opposes this plan. Instead, he will give us access to just one more option run by the government.

Overall I do not expect that this speech will be much of a game changer. We know that the President can give a good speech and he has been giving speeches on health care every chance he gets. The real problem has been and remains to be the actual details of his proposal. The more people learn the truth about this plan the less they like it. Unfortunately, the President did not come up with substantive new details nor did he go the route of reaching a compromise with the moderates and conservatives. Rather, he dug in his heels and backed the liberal health care wish list. Only time will tell if he made the right call.

9/12/09 Update: Yesterday, for the first time, the White House has issued a statement indicating that they will support legislation that requires verification of citizenship for anyone purchasing insurance through the new proposed health insurance exchange. This is, of course, a victory for those who support verification, but more importantly it is an admission that the President's critics (including Congressman Joe Wilson) were right.

This is similar to the debate over the "death panels." Remember that the President basically called Sarah Palin a liar for her criticism that the end-of-life counseling could place undue pressure on citizens to end their lives sooner than they would otherwise have chosen. But, soon after former Gov. Palin's criticism, the legislation in question was pulled from all of the proposed health care bills.

The Hardest Thing to Sell is a Free Lunch

An old Hollywood adage says that you can make a movie fast, you can make a movie cheaply and you can make a movie great, but you can’t do all three. Any claim to the contrary and would be financers start looking for alternative projects. Ironically, sometimes the hardest thing to sell is a “free” lunch.

This is the situation in which the President finds himself today. He is having a hard time selling a free lunch to the American people. He is promising that he can provide health care for everyone 1) without increasing our taxes, 2) without increasing the federal deficit and 3) without any rationing of health care. So far, the American people are not demonstrating an appetite for the President’s free lunch.

The first problem the President has is one of approach. It is simply a part of the American DNA to doubt anyone promising something for nothing. Common American warnings include if a deal seems too good to be true then it probably is, buyer beware, and there is no such thing as a free lunch. By promising the world and asking nothing in return, the President has triggered a skeptical defense mechanism that is an innate part of the consumer savvy American psyche. What’s the catch? What’s the angle? we instinctively ask.

President Obama might actually sell more people on health care reform if he were to drop his free lunch approach and try a more believable cost-benefits approach. He could say that he is asking everyone to take a modest increase in their tax bill, but in return he can deliver a health care system that provides access for more people without reducing our access to or our quality of care. After all, Americans may be skeptical of a free lunch, but we are also suckers for a good deal.

Unfortunately for the President, the second problem he faces is one of substance. The history of government involvement in health care is not on his side. Most voters are quite aware of the fact that the two major government run health care programs, Medicaid and Medicare, are on a collision course with bankruptcy. Each year they take a greater portion of the federal budget to stay operational. No one denies that this is an unsustainable path.

Many voters from around the country are also quite familiar with failed attempts by individual states to provide expanded coverage for little or no costs. For example, in 1994 the state of Tennessee attempted to reform its health care system largely because of the out of control costs of its Medicaid program. They implemented TennCare, a plan with a public option that they claimed could simultaneously cover even more people and yet would be budget neutral without raising taxes or cutting benefits (sound familiar?).

The end result was a disaster. Businesses did stop providing private insurance coverage and forced their employees to use the Tennessee public option instead. And far from being budget neutral, the TennCare program nearly bankrupted the state, required the citizens to pay higher taxes, medical benefits were slashed and 200,000 people had to be kicked out of the program entirely.

The states of Hawaii and Massachusetts have also each tried to provide more health care at lower costs. Although their approaches were different, both states saw the actual cost of their programs sky rocket beyond original estimates. Hawaii ended up cutting funding for their failed experiment after just seven months. Massachusetts is still holding on but seeing their health care costs rising faster than the national average, health insurance premiums rising faster than the national average and waiting times to see physicians on the rise.

President Obama may be able to gain some additional support for Obamacare if he changes his sales pitch. However, his greater challenge is going to be asking the American public to ignore government’s failed health care track record and to somehow believe that this time it’s different. Mr. President, you have your work cut out for you.