The Law of Unintended Consequences

In a famous scene in the movie "Top Gun," the salty naval commander Stinger admonishes Maverick (Tom Cruise's character) that "your ego is writing checks your body can't cash."

One might well give the same admonition to Congress, poised this week to extend unemployment benefits yet again ($47 billion), assuage bellyaching physicians with increased Medicare reimbursement ($64.9 billion), and increase Medicaid payments to the States ($24 billion), along with a handful of other initiatives both noble and nefarious to the total tune of $190 billion.

Uhm.

That besides, at the official health reform blog (HealthReform.gov), Stephanie Cutter, Assistant to the President for Special Projects, put up a post May 19 titled "Yes, You Can Keep Your Health Plan." In it, she says, "while the Act makes many changes to the individual market, it specifically allows those who want to keep their current insurance to do so. Most of the Act's protections apply only to new policies, allowing people to stick with their current plan if they prefer."

Of course, this statement is premised on the assumption that the individual's "current plan" will remain available, a condition that is - - at present - - beyond the administration's control. For those Americans whose health insurance is provided as a fringe benefit to employment, the continued availability of the "current plan" is the decision of the employer. Not the individual, and certainly not the Obama administration.

Employers understand this, and have for some time. Long before the reform bill passed, employers were considering whether continuing the paradigm of employer-based coverage still made economic sense:

The primary source of instability in the employer-sponsored insurance market is the decrease in employers offering health insurance coverage to workers and their families. Between 2000 and 2008, the percentage of firms offering health insurance coverage to their employees declined from 69 to 63; for firms employing less than 10 workers, the decline was even greater – from 57 to 49 percent.

The administration understands this too, because the above quote comes (also) from the HealthReform.gov website.

Consider the following factors in play:

• The reform bill did nothing to address the cost of care, which will continue to go up


• Premiums, which reflect the cost of care, will also continue to go up


• A surplus of employable individuals mean that businesses need not offer enhanced benefits to attract workers


• More employers, already at or near the break point of providing health insurance coverage as an employment benefit, will elect not to


• When employers drop health insurance as a benefit, the Obama administration's promise of being able to keep your "current plan" will be worthless.

Not that that would be a bad thing, necessarily. There are lots of reasons why employer-sponsored health insurance is a poor model on which to structure health care delivery.

But remember, of course, that we now have an individual mandate to purchase insurance. Individuals will be forced to continue supporting a third-party-payor model that overpays providers for poor quality care - - propping up what will be then be 1/5 of our entire national output while servicing a debt that exceeds 90% of GDP. That is what living in America will mean: being forced to support an otherwise unsupportable industry using money our grandkids will work their entire lives to pay off. That's not a future I want, and it's not a future I want for my children.

The "health care crisis" can be traced back directly to government intervention. The employer-based, third-party payor system thrived in the 50s and 60s because Congress and state governments thought it was a great idea and enacted laws that favored that model over others. Managed care thrived and became mainstream in the 70s and 80s because Congress and state governments thought they were awesome and enacted laws that favored that model over others.

The unintended consequences of all that government intervention is a system that has priced itself out of viability and yet delivers low quality care. Free markets frown on such results, and thus both individuals and business had begun to turn away from that model. But rather than return to free market principles, the recent reform bill corrals all of those that would flee and throws them right back into the third party-payor, managed care system by way of the individual purchase mandate.

That is not legislating to the benefit of the American people; it is legislating to the benefit of an outdated idea that should have died a long time ago. That is not legislating to the principles of a free market; it is legislating to the principles of a command market. That is not liberty; it is involuntary servitude to the third- party payor model of health care reimbursement. And involuntary servitude is the unintended - - but very real - - consequence of Obama's health care reform.