Obama health plan just perpetuates current, unhealthy system

"The status quo is unsustainable for families, businesses and government." — President Obama, June 13

WASHINGTON — One of the bewildering ironies of the health-care debate is that President Barack Obama claims to be attacking the status quo when he's actually embracing it. Ever since Congress created Medicare and Medicaid in 1965, health politics has followed a simple logic: Expand benefits and talk about controlling costs. That's the status quo, and Obama faithfully adheres to it. While denouncing skyrocketing health spending, he would increase it by extending government health insurance to millions more Americans.

Just why this approach is perennially popular is no secret. Health care is viewed as a "right." Promoting it seems "moral." Cost controls suggest dreaded "rationing." So there's a powerful bias toward expansion.

History is unambiguous. Originally, Medicare covered only the 65-and-over population. In 1972, Congress added the disabled, now about 15 percent of beneficiaries, notes Diane Rowland of the Kaiser Family Foundation. It also covered dialysis for kidney failure. In 2003, Congress created a drug benefit. Along the way, other services (hospice care, mammograms) were added.

Medicaid — the federal-state program for the poor — is the same story, says Rowland. Initially, it covered mainly people on welfare, as defined by states. Gradually, eligibility broadened. Now, children 6 to 18 in households under the poverty line ($22,050 for a family of four) get it.

Congress also set higher limits (133 percent of the poverty line) for pregnant women and children under 6. In 1997, Congress created the Children's Health Insurance Program (CHIP) to expand coverage further.

Meanwhile, open-ended reimbursement by government and private insurance has ballooned health spending despite repeated pledges to "contain" costs. For example, health payments for individuals rose from less than 1 percent of federal spending in 1965 to 23 percent in 2008.

Obama would perpetuate this system. No president has spoken more forcefully about the need to control costs. Failure, he's argued, would expand federal budget deficits, raise out-of-pocket health costs and squeeze take-home pay (more compensation would go to insurance). All true.

But Obama's program would do little to reduce costs and would increase spending by expanding subsidized insurance. The House legislation would cut the uninsured by 37 million by 2018, estimates the Congressional Budget Office. The uninsured get care now; with insurance they'd get more.