The Government Takeover of Health Care That Isn’t

January 20, 2012
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Among the wide array of hyperbolic complaints about health reform, the phrase “government takeover of the health care system” has always struck me as an odd one. It makes it sound as though the government is taking over the means of production, which is far from the case. In researching this post I realized I’m far from the first to make the observation. Actually it was featured as the Lie of the Year for 2010 by PolitiFact.

Among the wide array of hyperbolic complaints about health reform, the phrase “government takeover of the health care system” has always struck me as an odd one. It makes it sound as though the government is taking over the means of production, which is far from the case. In researching this post I realized I’m far from the first to make the observation. Actually it was featured as the Lie of the Year for 2010 by PolitiFact.

The government does play a major role in the health care system. It’s a big customer, financier and regulator. The feds own and operate VA and DoD hospitals, and there are various county, city and state facilities, but this is a small share of the total.

Kaiser Family Foundation has an informative piece today (Betting on Private Insurers) that  looks at health care based on who’s managing the benefits. The conclusion: at least 73 percent of those covered are in private insurance arrangements, whether through employer coverage, individual policies, Medicare Advantage or Medicaid managed care. The rest are mainly in fee for service Medicare and Medicaid. And many fee for service Medicare patients have private Medigap and Part D drug plans. If anything, the Affordable Care Act is likely to boost the percentage managed by private entities. More individuals are slated to purchase commercial insurance on their own or through exchanges, and much of the growth in Medicaid will be in managed care.

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Providers of health care are overwhelming private and likely to remain so. The government isn’t nationalizing hospitals nor forcing physicians out of private practice.

Sure, it’s arguable that many hospitals are so dependent on Medicare that the government influences them heavily without owning them. But I haven’t heard anyone say the government has taken over the defense industry even though many weapons makers can only sell to the feds.

I think it would be healthy to have a debate about the extent to which government should get more involved in health care delivery and benefit management. Maybe the VA model should be replicated and a public insurance plan be introduced to compete with the private health insurers. But none of this is part of the Affordable Care Act and therefore it’s laughable to frame “ObamaCare” as any kind of government takeover.