Health Care Trojan Horse

I have warned for years about government health care being a Trojan horse for government micro-management of personal behaviors.  If government is paying the health care bills, then anything individual action or choice that can conceivably be linked to health are open to regulation.  The latest episode:

Note in particular their emphasis on "health-related excise taxes." Those discussions are happening in Congress and the administration, too. It's really looking like tobacco, alcohol, and sugared sodas are likely to get a bit more expensive after health reform. Polling around these policies is proving them more popular than most wonks expected, and they have the secondary benefit of being dual-purpose: They raise money and make Americans healthier.

The fascism of good intentions is on its way.


  1. Bobby L:

    You've been warning, but I'm fairly sure they would just outright say that is the goal.

    From Politico on 5/12:

    In a roundtable discussion with business executives at the White House, Obama praised their corporate efforts to contain health care costs as admirable, achievable and practical reform goals.

    Afterward, Obama said he was having the administration look into programs for federal employees that would emphasize wellness — including smoking cessation, exercise and healthy eating. The aim is to lower cholesterol and stave off chronic diseases like diabetes and heart disease.


    “All this [is] designed to save taxpayers money, save businesses money and ultimately make the American people healthier and happier [and] make sure we’re getting a bigger bang for our health care dollars,” the president said.

  2. morganovich:

    if you are worried now, imagine how much easier it will be to drive personal behavior under a signle payor system.

    the WSJ reports today about a congressional plan currently gaining substantial support under which private health benefits (such as those received from an employer) will be taxed as income. the taxes from this program will be used to fund a national (government run) HMO.

    such a plan will weaken insurance companies and make it less attractive for employers to provide health coverage (or less attractive for employees to get it). if the true goal is universal coverage, this seems an odd way to go about it.

    my fear is that what we are really seeing is the single payor trojan horse. drive the private sector away from providing healthcare, weaken insurance companies, and go after them with a heavily subsidized government competitor. then, when "capitalism fails" step an and drive single payor.

    at that point, the we will have federally mandated services and service levels and the governement will have a great deal of control over personal health decisions from a "nanny state" standpoint.

    the silver lining here is that if anything is going to drive an anti-government healthcare backlash, it's raising taxes on everyone who gets it through their job. perhaps this tax is just a bargaining chip to be abandoned as a "concession" to getting a national HMO, perhaps it's really the desired plan. motives in DC at the moment are difficult to pin down. what a mess.

  3. m:

    "They raise money and make Americans healthier"

    I love this paradox that's often quoted in re: sin taxes. It can't do both. If people stop buying those things, the government raises no money. If the government raises money with them, people must be buying them and, therefore, not getting healthier.

    Seriously, America, these are the "leaders" you chose?

  4. Ian Random:

    If sin taxes worked, then the convenience store across from the apartment complex near my house would go out of business. People gotta get their cigs, scratch-offs and sudz.

  5. NASCAR Wife:

    What about the weight of evidence that suggests that drinking, especially red wine, in moderation, is good for you? The weight of evidence for this consensus is at least as solid as the evidence for man made global warning.

  6. Maurice:

    They are not going to care about what makes sense, or "weight of evidence"....and they shouldn't, because the evidence CHANGES all the time in medicine. It's the fallacy of so-called "evidence-based medicine"...this month's study is refuted next month by another study, and then a 3rd study comes out that confounds the conclusions of the first two.

    That's just one problem.

    How much wine IS good for you? One glass...two glasses...and who is going to say? Will we be allotted enough via ration coupons for enough for one glass/day/adult/household?

    Which anti-hypertensive drugs are we going to get to use? The ones that are cheap but claimed to be "as effective" (e.g. thiazides, water pills), but which do NOT work in many people, cause their own set of side effects, worsen glucose tolerance for diabetics etc? Ah, but they ARE dirt-cheap compared to newer (and better-tolerated) ones.

    Go back and look and see what was accepted medical practice even a few years ago was...or go back 30 years..and see if any of that is still accepted practice today.

    And what really works in terms of personal health? What's the best diet?

    WHO THE HELL KNOWS? No one. The government changed their food pyramid around not long ago, and even now, many would say that the government STILL doesn't have it right (and never will), because there is no 100% fits-all, will keep all illness and obesity diet away. Oh, yeah, calorie restriction probably is helpful, so let's just outlaw anything besides romaine lettuce, and call it a day.

    Coyote has it right. It's all a power grab, and nothing more. It's certainly not good science, nor good economics.


  7. Dan:

    This site is quickly becoming another conservative "bash Obama" site, in which no one ever acknowledges he can do anything right. I hear the same stuff from my father-in-law, so there's usually no need for me to check in here.

    However, a letter writer to the NYT made a good point about healthcare today and I wanted to bring it up. He noted that there's a lack of consistency in conservatives' position. First, they go about complaining all the time that the government can't get anything right. But on the other hand, they don't want a public health insurance plan to be available because if it were, everyone would choose it and it would hurt the private insurance companies.

    You can't have it both ways. If the government is incompetent and its plans never work, than the private firms have nothing to fear from public competition.

  8. James H:

    Dan, Obama is the one in power now, not "conservatives", so who else would bear the blame? In fact, I think that the Republicans could probably save some taxpayer money and just take a furlough until the next cycle since they aren't needed or wanted with the supermajority of Democrats and can't mount any effective opposition.

    You're missing Coyote's point about the public competition. Private firms must fear it because they have to make a profit to survive. Public programs can be in the red as long as China is willing to lend us the money.

  9. ed fargler:

    It's more than that. It's the fear that government will run the private companies out since they will not be allowed to directly compete with its program. Why do you think all the health care guys went and met with him? I'd fear this guy if I ran a health care business since nobody knows the specifics and transparency is rather lacking.

    I don't like nanny state concepts cause when the nanny gets mad, nobody can stop her from shaking the babies.

  10. morganovich:


    i think you miss the point in 2 respects.

    1. this is not a "conservative bash obama" site. it's a bash big government site. go back and read archived posts and i think you will find plenty of bush and republican bashing when they were driving the agenda.

    2. your argument about choosing the government plan over private plans also misses the point. the government is a TERRIBLE provider of goods and services. they will produce a plan, that like medicare and medicaid will be clearly inferior to plans privately available on a cost/service ratio. however, as they do not need to make a profit, they can price that plan so low that it becomes cost/benefit competitive and just bleed red ink the way the current medi plans do.

    if it were a private entrant, it would go out of business preventing such unfair competition. but it's not. they'll just raise taxes, adjust accounting standards, and plow ahead. think of it as health insurance dumping.

    how is this a good thing? inefficient spending never makes sense.

    now the congress proposes to compound the anti-competitive situation by making private health insurance taxable. they propose to take from the efficient and profitable and plow it into the inefficient and unprofitable. this will put ruthless and increasing pressure on private providers which which none can be expected to cope.

    if the government wants to found and run an HMO and demand that it be profitable, that's one thing, but to siphon money from private profitable firms to fund a loss making enterprise is precisely equivalent to taxing all foreign cars in the US and passing it on to the big 3 until through a combination of making foreign options more dear and US options cheaper that our cars look better in the marketplace.

    it's anti-competitive, inefficient, and unconstitutional.

  11. Dan:

    Thanks for the responses, everyone. I appreciate your thoughts. I'm not necessarily for Obama's plan, by the way. I just think that with the current system not able to cover millions of people, and health costs taking up more and more of our country's budget, it makes sense to look at alternatives.

  12. Dan:

    I also think most of you are too quick to label anything private as good and anything public as bad. It's not automatic. The massive bureaucratic costs associated with private insurance plans have contributed to the huge expenditures we're making for healthcare today. And thanks to Medicare, a public program that has to cover all, most senior citizens today have better access to healthcare than 40 years ago.

  13. morganovich:


    medicare has been a significant part of the upspiral in health costs. everyone loses money on it. it does real damage to the private insurers and drives down their margins.

    the other biggest driver in incremental healthcare costs is malpractice and general insurance. with a tort system as wildly out of control as ours and with astoundingly sized jury awards, the danger of being a doctor is enormous. i have a frient who is an optometrist who used to also run a free healthcare clinic in the bronx to do eye exams etc for needy kids. he had to stop when the insurance costs got so high that he was personally bleeding 6 figures on it.

    reining in tort law is the most obvious way to cut healthcare costs. very few countries allow suit for "pain and suffering" or punitive damages. this is a key component often ignored when comparing the US system to, say, france. most countries will let you recover costs and possibly lost income, but that's it. the deadweight loss to our system as w hole from pain and suffering suits would more than pay for all the uninsured in the country.

  14. tribal elder:

    We are blessed to have, as our model of central gov't planning and efficiency, that single nationalized industry, the delivery of first class mail. A business with no competitors can close on at 5PM M-F, Noon on Saturday, and be closed on Sunday.

    If you like the level and efficiency of service from USPS, I'll bet YOUR life you'll love socialized medicine.

  15. dave smith:

    All this does not matter...Obama has promised that no one who makes less than 250,000/year will see their taxes raised.

    How will he get out of this one?

  16. Not Sure:

    "A business with no competitors can close on at 5PM M-F, Noon on Saturday, and be closed on Sunday."

    If I want to buy a car, I can do so 7 days a week, as late as 10PM most nights.

    If I want to get a license to drive that car, I have to go between 9 and 5, M-F only. No evenings, no weekends.

    Which of those activities involves interacting with the government? Public servants? Yeah, right.

  17. Dr. T:

    NASCAR Wife: "What about the weight of evidence that suggests that drinking, especially red wine, in moderation, is good for you? The weight of evidence for this consensus is at least as solid as the evidence for man made global warning."

    The weight of evidence that moderate alcohol consumption is healthful (except for diabetics and pre-diabetics) is enormous. Not one study has refuted this. It still won't stop the governments from heavily taxing alcoholic beverages.

    The weight of evidence that we're at the beginning of a continual global warming period is NONE. The weight of evidence that carbon dioxide causes global warming is less than none. That still won't stop the government from enacting a horribly expensive, economy-damaging CO2 cap-and-trade program.

    Dan: "This site is quickly becoming another conservative “bash Obama” site..."

    No, it isn't. It's often a bash government site, because government affects everything now. But note how this post started: "I have warned for years about government health care..." Years. Not months. Also, this site is more libertarian than conservative. Some of the commenters may be conservative, but that's expected when comments are unmoderated.

  18. Methinks:


    A large part of the reason the current system is not able to cover millions of people is government intervention in the form of insurance regulation.

    Insurance is regulated by the state and simply moving or changing employers is a reason to break coverage. This worsens the "pre-existing condition" problem because if you paid premiums to Aetna in New York for 20 years but moved to Connecticut, you would have to re-apply with Aetna and they may decide not to cover you because you have a pre-existing condition which you developed 18 years into your policy with them in NY. So, you pay but you don't get coverage.

    State mandates raise the cost of insurance and put health insurance out of reach of less well-to-do Americans. New York has so many mandates that the cost of a basic policy for two young and healthy adults is around $15,000 per year. Health insurers in NY are forced to cover basic necessities such as acupuncture and life-threatening diseases such as acne. In Connecticut, there are fewer mandates. The same couple can obtain catastrophe insurance for less than $3,000 annually. Sure, you may have to pay out of pocket for acne, but the insurer negotiates a lower rate with your doctor and if you have an actual medical problem, you're covered. You may choose a more comprehensive plan in Connecticut but you can't choose a less comprehensive plan in NY. So, in NY, if you can't afford Cadillac coverage on your Yugo budget, you go without health insurance. Obviously, this problem exists in states other than NY.

    In most states, regulations prevent doctors from charging patients what the insurance companies pay them. Insurance companies pay a fraction of the amount submitted to them. But, if the doctor charged the patient the amount he actually received from the insurance company for the same procedure, it would be considered insurance fraud.

    Recently, in NYC there was a case of a doctor who served low income patients by charging them a low flat fee for a certain number of visits. This served the un-insured very well by giving them access to medical care at rates very very far below NY insurance rates. The state intervened. It forced the doctor to jack up his rates so that he is less competitive with insurance companies. That's the state working for the uninsured.

    Insurance regulation effectively limits competition for existing insurance companies, increases inefficiencies, increases the cost to the consumer and limits consumer choice. But all of that is created by government regulations.

    There is a default assumption that private is always better. Government has the power to create monopolies - note the USPS. The survival of a government run program is not dependent on efficiency and it's not at all dependent on providing the consumer with the service he desires. A private business is completely dependent on two things: providing the products and/or services consumers desire in the way that is desirable to them and efficient allocation of resources. In other words, a private enterprise must please it's fellow man. A government enterprise doesn't need to. That's the reason for the default assumption.

  19. Methinks:

    As if my previous post wasn't long enough....

    The sin tax is a laugh. So thinly veiled it would be embarrassing to anyone who is not in government. Notice that the sin tax is always levied on things for which demand is highly inelastic. Coincidence? humph.

    The weight of evidence that moderate alcohol consumption is healthful

    Dr. T,

    As I recall, you are a medical doctor. I read recently a curious thing regarding alcohol consumption - that the more alcohol you drink, the better it is for your heart. Obviously, excess consumption damages other organs, increases the probability of some cancers and reduces life expectancy for that reason but for the heart there's no such thing as too much.

    Speaking of husband is waving a glass of Malbec at me from across the room as I write this, so.....later!

  20. James H:

    Don't forget that as costs rise, they don't look for ways to cut in other areas. They raise prices while also cutting service levels (this from reading about mass-transit services on this blog). No competition also takes away any incentive to be friendly, expedient, or even care about a customer's outcome. I think about my experiences at DMV.

  21. spiro:


    "I’m not necessarily for Obama’s plan, by the makes sense to look at alternatives..."

    That statement in itself is contradictory. Obama's plan allows for NO alternatives. And Obama is not "looking" at anything, he is legislating. We're not anti- anything here, generally, we're pro- personal freedom.

  22. K:

    Try looking at health care somewhat, but not totally, like civil aviation.

    Most fliers take commercial flights. But we do not have one airline. We have about a half dozen very large and I won't guess about regional carriers. Clearly the government should nationalize and optimize service.

    We also have many people who can charter or own private jets. Clearly those planes must be folded into the new national air fleet. That would allow even the poorest person to sometimes use the most luxurious small jets.

    And finally, we have people who lack the money to fly. And there is no bus service to many smaller towns. However Amtrack provides excellent transportation for them at a low cost.

    Medicine is not travel. The analogy only goes so far. But analogies can help us think about what might happen as the present tiered system is forced to become a single-payer system.

    It comes to this. It sucks to be poor. But avoid the appealing idea - and logical mistake - that forcing the well off into a new system must inevitiably improve matters for the poorest. It might; and grand general theories of society insist it must. But it may not despite any amount of feel-good advocacy.

    We don't know.

    Conservatives have the idea that central direction is not well suited to all problems. But those who believe otherwise are in power.

  23. Bobby L:

    This is a good discussion on health care, but I really think you guys are missing the point. This has about as much to do with health care for everyone as cap and trade has to do with reducing CO2. It's just a tool for the "I know better than you administration" (which is both sides, btw) to worm it's way into our lives and tell us what food to eat, what cars to buy, what fuel to burn, who we can/cannot marry, etc., etc.....

  24. Eric Hammer:

    I think the DMV is the best example of state run programs. My local DMVs do not accept cash. US legal tender is not at the DMV. They also do not accept debit cards or credit cards, only check or money order. Add in a long wait and iffy service for basic exchanges, and you have an explanation why I went to a liscensed agency to get the plates and other necessities for my new car instead of the DMV.

  25. the other coyote:

    K hit the nail on the head. Whenever I hear someone insisting that "healthcare is a right" or claiming that millions of people are uninsured, I think my head is going to explode. For these reasons: First, why do I owe anyone else health insurance? As K stated, it sucks to be poor. I am sorry that there are people too stupid, too lacking in ambition, too lacking in judgment, or (possibly) too unlucky to find a job that provides decent health insurance, but why should I have to pay for them? What gives anyone else the right to the money I worked long and hard for? Why should I have less-than-good access to healthcare when I played by the rules, got an education, and carefully selected an employer who does provide decent healthcare coverage (and I show up and work my ass off every day to keep that coverage)?

    Listen, if I choose to donate to a charity, that's my choice. But I know lots of people who don't have good healthcare coverage because they won't put in the time or effort to better themselves. I have a bro in law whose employer doesn't offer health insurance. Yet he stays at that company. You know why? His boss lets him do what he wants, when he wants, and he likes not being told what to do better than he likes health insurance. Why is his choice my problem? I also know some youngsters who like to gamble; healthy 22 year old males who would rather have beer money than pay the health insurance premiums. Again, their bad choices (and their parents' inability to parent) are not my problem (aside from the fact that they WILL get emergency care and other users of the hospital, possibly me, will get stuck paying higher charges to cover their bad debt).

    I think I've commented on this before, but in Dallas, Texas, you can get a pretty good boob job - soup to nuts - for $10,000. If the rest of medicine could take a page from the cosmetic surgery industry, Obama would have his trillion dollars in savings in a flash.

  26. Dan:

    Thanks, the other coyote, for the "pull yourself up by your bootstraps" argument. Despite what you say, we don't have a level playing field in this country. I (and probably you) was born into fairly comfortable circumstances. My parents helped me pay for college and grad school, which helped me get a good job with health insurance. I guess to all the people who didn't have the luck to be born into such a situation, your response would be, "Let them eat cake."

  27. K:

    the other coyote: I think you score higher on the "tough love" scale than I would. But we all must be somewhere. My comment last night about aviation was to encourage thinking about how national health care might actually work out. People are passionate about health, they aren't about civil aviation.

    I could have substituted the pleasure cruise industry for aviation. The richest don't take them. They charter or own yachts. The poorest don't take them. They don't have the money. In between are huge numbers of people who can easily afford cruises and huge numbers who can barely afford cruises.

    Only the latter actually think about how much the value of a cruise v. other goods and services.

    Below I'll provide an comment that I also posted elsewhere today:

    National health insurance is actually about Power. Power with a capital P. The additional tax revenue is a minor concern.

    It is futile to argue that employer provided health insurance EPH, is not income. It is income. The usual plan is that the employee pays a portion of the premium with a payroll deduction. If an employee could decline any insurance and be paid the premium then it would clearly be income.

    O and Congress are going to tax EPH if they can and dare. That thar be the facts.

    EPH is a barrier to a nationalized health insurance and a barrier to expanding government power. Cutting off EPH ends the political clout of health insurance companies because their premiums would vanish. It also weakens any opposition from health professionals and associated institutions such as hospitals and laboratories; they would operate as the government demands or not at all. The drug companies would also be unable to resist orders.

    the nj is right, private health insurance can be very costly.

    OTOH, individual health insurance for a fit 25 year old would be quite low if the insurer could look at age, sex, lifestyle, health history, and give them an examination before writing the policy.

    But GROUP health insurers cannot legally do those things or many other things. Lawmakers work under the general premise that such acts would be "unfair" and thus must be made illegal. So they made them illegal.

    Hillary was at least bright enough to realize that the healthy and young would not voluntarily pay premiums for national health insurance. So her plan compelled everyone to join.

    But the Devil is in the details. Not everyone can be required to pay. Children certainly lack the funds, the homeless and poorest do. And we don't know how many illegals (choose your own term) are in the country. We don't know who they are or where they are or how to contact them.

    So her proposal was to create a massive bureaucracy to fix all such details. Do you believe it would?

    The problem is not that people are begrudged medical care. It is that many cannot afford routine care and others can be financially ruined by a catastrophe. And some believe the cost is deliberately kept unfairly high. Yet just as many do not believe the government's schemes will improve matters.

    But many do, including most of Congress and government. All we can do is watch, shout "yea" or "nay", and see.

  28. spiro:


    there is a HUGE logical mistake in your argument to "the other coyote". You assume that since you were born to privilege that TOC was too. I've found this mistake is very common in the liberal/academic mindset. Many people who are born poor use that as incentive to be better off as adults - and we take PRIDE in it. This is what separates America from the rest of the world..
    I was born poor and have worked hard for EVERYTHING I have -- that is why I don't want to have to pay for everybody else's ill-advised lifestyle choices.
    I currently do not have traditional health insurance because I found a better (and cheaper) alternative - an HSA account.
    Riddle me this:
    Why does my hard earned money have to go to those people with no job, 8 kids from 8 different guys and who have no self control or responsibility? And yes, it IS my money Obama wants to give them since I pay an honest income tax. This idea of nationalized health care and the increased taxes associated will set back our retirement age by decades.

  29. Methinks:


    I absolutely agree that the playing field is not level. Some people are born ugly, some stupid, some ugly and stupid, some have parents who don't love them, etc. They never have all the benefits of smart and/or beautiful and rich people. The world simply isn't just. It's not fair. I don't dispute that. What I do dispute is the fairness of reaching into a stranger's pocket to finance my idea of a more fair world. Worse yet, having government reach into other people's pocket. Reaching into my own pocket I consider admirable, of course.

    Incidentally, I was born into exceedingly uncomfortable circumstances, spent four years of my life at death's door and suffered a brutal immigration to America. I left my parents' house in high school and supported myself through the rest of high school and college by working menial (although, as my skill level increased, increasingly less menial) jobs to pay for school. I took out only $15K in school loans and my parents didn't help me at all. I received no charity or public assistance and my circumstances were worse than I'm willing to detail here. The natural response of people who know my story and see my current level of success is that I'm an extreme outlier. But, that's not the case. My story isn't terribly unique either. While the other Coyote makes the assumption that everyone CAN and SHOULD pull themselves up by the bootstraps, you should be careful not to assume that those born in circumstances worse than your own can't. It's terribly naive and insulting to those people.

  30. Fred Z:



    My children, we have done this before.

    It did not end well.

  31. ratherbeatthelake:

    You simply cannot make the world more fair, or just, by *taking* money (or property or body organs or ...) from one group and giving it to another group. That's just the powerful buying votes.

    Fair is not equal; fair is equal opportunity.

  32. John West:

    We have had government health care in Canada for a couple of generations now. It is a badly run as the educational system. We are indeed micro managed, the restrictions on our life-style just keep coming ... but it happens incrementally so we didn't notice it until the pot was a full boil.

    In Canada everything is now a right, not a privilege. Too many government given rights destroy the fabric of a society. Most Canadians are not even patriotic anymore, they see their country as an entity that owes them a life. And oh yes, we are grossly over-taxed and sadly the majority has adapted to this gray dull world called democratic socialism. It is an addiction and it must be avoided at all costs. Once it's upon you only a huge violent revolution can kick the habit.

    Here is a good explanation of what rights can do to destroy human behavior.