Phyllis Schlafly

Why Is Insurance Unaffordable For Many Families? - Feb.19, 1997

Phyllis Schlafly
February 19, 1997
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It's not hard to figure out why so many people lack health insurance. They can't afford it, or at least they don't think the insurance they can buy is worth what they have to pay for it.

This would not be a federal problem except that the chief reason why health insurance is so expensive is a Congressional mistake. Congress is responsible for the system that most health care is paid by third parties, either by government or by employers. This situation was created by the federal tax law that grants tax deductibility only to health insurance plans owned by employers, but not to plans that allow individual employees to own their own health insurance, control their own health care spending, or set up their own plan.

This means that (a) there is no incentive to hold down costs since people think that "somebody else is paying for it," and (b) it breeds a culture in which people don't expect to pay for health care. Many think they are entitled to health care as some kind of "right." The same people who don't grumble about $200 a month for automobile payments resent paying $50 a month for health insurance or for a visit to a doctor.

The tax-deductible feature is a powerful incentive to perpetuating a system that is wrong from every standpoint and grievously unfair. It means that the officers of big corporations enjoy gold-plated, fee-for-service health insurance prepaid with tax-deductible dollars, employees of big corporations have prepaid tax-deductible back-of-the-bus managed care, but the waitress, the part-timers, the self-employed, and the millions who work for small firms that lack company plans can buy health insurance for themselves and for their children only with after-tax dollars.

The cost to the individual of privately-purchased health insurance is exorbitantly high because (1) it must be bought with after-tax dollars, (2) the market is distorted because there is too small a pool of the uninsured seeking to buy individual insurance, and (3) it is subject to state mandates, which require insurers to include coverage for many conditions that may not be of value to the individual.

There are a lot of problems with health care, many of which will be addressed by other speakers. I suggest that the underlying problem is the attitude of liberal politicians that this is a federal problem that Congress is capable of solving. Congress isn't capable of solving all the problems, but it should start by cleaning up its own mistakes.

The system of giving massive preferential income-tax treatment for health insurance to bosses but not to workers is bad government policy, stupid economic policy, and very unfortunate for the individual. It is unjust, discriminatory, and downright intolerable. It is the chief reason for the large number of uninsured Americans today. There is no more reason why your boss should own your health insurance than your automobile insurance. When you switch jobs, your car and your car insurance go with you, and your health insurance should, too. Yet 90 percent of Americans who have private health insurance are tied into employer-based health insurance.

The correct solution is to move toward a system in which individuals can own health insurance and be treated by federal laws at least as well as corporations are treated. This can be achieved by Medical Savings Accounts (MSAs) - owned by individuals. MSAs are the best solution to all the problems connected with health care: uninsured Americans, portability, affordability, preserving your right to choose your own doctor, pre-existing conditions, job lock, gatekeepers, capitation, deductibles, co-payments, paperwork, long-term care, Medicare going bankrupt, and even the decline in real wages.

MSAs can bring down health care costs dramatically because they will put consumer discipline into the marketplace and provide incentives to save. Nobel Prize-winning economist Milton Friedman said that MSAs could cut health care costs in half. Furthermore, MSAs would be available for many medical expenses often not covered by company plans (such as eye glasses, dental care, or preventive care) or by Medicare (such as prescriptions and long-term care). MSAs would also be available from the first dollar of medical expense (which would be helpful to the single mother whose child gets ill on New Year's Day and can't afford to pay the usual deductible).

The MSA feature of the Kennedy-Kassebaum bill passed last year will not have all these good results because of the way it was hemmed in on all sides by regulations and restrictions. It is hard to avoid the conclusion that it was planned to fail. It is insulting to the American people that MSAs are available to only 750,000 out of 250,000,000 Americans, a factor that limits the market too drastically to allow a fair test.

In 1994, the American people decisively rejected the grandiose Clinton plan for the Federal Government to be the manager, the financier, and the regulator of the health care industry. What we are witnessing now is an attempt by the same Administration to enact the same plan incrementally, starting with children. Let's not lose our perspective. Children are the healthiest segment of our society, and most of the children who lack health insurance have not suffered. When I was growing up, my family had no health insurance, or even a family doctor. I personally never saw a doctor (except an optician to get glasses) until I was 25 years old and pregnant with my first child. I never had any of the so-called preventive-care examinations; I never had any vaccines. I had all the childhood diseases without ever seeing a doctor. Part of the plan to promote KidCare is an attempt to dictate health care, mandate vaccines, and enter everybody's medical record on computers. This is unacceptable in a free society. Parents should have the freedom, as well as the responsibility, to make their own decisions about their children's health care.

Congress's alleged responsibility to provide health care for all Americans, or even for all children, is a totalitarian idea. Unfortunately, the Big Government types who want to take over the health care of all children have been moving surreptitiously under two federal laws, which now cry out for Congress to amend.

One is the 1994 act called Goals 2000, which proclaims as the number-one goal: "Every child should start school ready to learn." The Robert Wood Johnson and other big foundations have persuaded many schools that "readiness" requires the schools to provide a large array of federal health intervention and services in public schools, including health clinics. The foundations are making the states and schools, including health clinics. The foundations are making the states and school districts believe that federal mandates in the Goals 2000 Act and the Individuals with Disabilities Act (IDEA) require the schools to test children for emotional, social, mental and physical disorders.

This rationale is the source of the outrageous battery committed against 59 sixth-grade girls at the J. T. Lambert Middle School in East Stroudsburg, Pennsylvania, who were taken out of math class and, despite tears and protests, were stripped, spread-eagled and given invasive pelvic exams without their parents' knowledge or consent. All the public officials are claiming that all this was done according to law and procedure. If the law allows this travesty, it cries out for Congress to change it.

The other federal law is Medicaid, which was set up to provide health care to people on some kind of welfare, either Aid to Families with Dependent Children or Supplemental Security Income (a program for the old). Loose language in the Medicaid law has allowed the bureaucrats and the billion-dollar foundations to teach public schools how to make "creative" uses of Medicaid funds and use them for all schoolchildren, whether in poverty or not. When health care is provided by and in the public schools, there is no separating welfare kids from the others. They are all eligible. No wonder Medicaid costs are skyrocketing out of control!

The smoking gun of this Medicaid fraud recently surfaced in an amazing letter sent by the Illinois State Board of Education to school district superintendents. Signed by the Board's "Medicaid Consultant," this letter describes in detail how public schools can exploit Medicaid in order to funnel a fresh flow of taxpayers' money into public schools that bypasses all traditional funding sources and accountability. Stating that "the potential for the dollars is limitless," the letter boasts that "Medicaid dollars have been used for purchases ranging from audiometers to mini-buses, from a closed captioned TV for a classroom to an entire computer system, from contracting with substitute [teachers] to employment of new special education staff, from expanding existing special education programs to implementing totally new programs."

Incidentally, this letter was addressed to the Barrington, Illinois District, one of the wealthiest districts in the United States. It proves that Medicaid is no longer a program for the "poor," but is the vehicle to saddle us with the federal medical system that the American people have rejected. The Clinton Administration, Ted Kennedy and Ira Magaziner have not abandoned their goal of forcing America to adopt federal health care; they are just bringing it in through the schoolhouse door.

Many people were puzzled when Bill Clinton bragged during last fall's campaign that "he" had provided health care for an additional million children. Medicaid is how he did it. Congress should amend the law to make this fraud impossible.

Congress should also conduct a thorough investigation of the billion-dollar tax-exempt lobbying, bribery of public officials, Medicaid fraud, and violations of privacy laws that forbid releasing personal data or transferring it from one agency to another.

The foundations' game plan is to turn the public schools into delivery centers for all kinds of health services, including physical examinations, treatment and medication of children, with or without their parents' knowledge or consent. This changeover of the schools' mission from academic learning to social services dispenser also includes compiling all sorts of private information on schoolchildren and their families.

Congress's primary role in dealing with health care should be to remedy its past mistakes that are hurting so many Americans and to investigate the fraud and abuses that federal laws have encouraged.

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