“Free” Uhuh, Right.
Ah, John Kitzhaber, everyone’s favorite cowboy-booted former governor. He’s back, and as further evidence that doctors don’t know anything about economics (or business, a fact to which anyone in the financial sector will gladly attest), he’s proposing “free” healthcare for all Oregonians. Proving that kids in the Journalism school don’t learn anything while busily failing the world’s easiest economics class, Ryan Knutson buys the “free” line hook-line-sinker. The nut ‘graph:
In the future, O’Leary and all other Oregonians may not have to pay a dime for health coverage if former Oregon Gov. John Kitzhaber’s proposed health plan is put into effect. The former emergency room doctor announced his goal to implement drastic reforms to the Oregon health care system to provide free health care to all Oregonians. He hopes to get an initiative in November’s elections and possibly enact legislation in 2007. [Emphasis added]
Right, because the taxes they pay don’t count as expenditure. I guess the $5000 I paid to Uncle Sam in one way or another in 2005 doesn’t count, then. Moving on to Kitzhaber’s actual plan:
Kitzhaber’s plan says that pooling tax dollars and federal funds that currently pay for Medicare and Medicaid with the tax break employers currently receive for providing medical insurance for their employees would create an approximate $6.4 billion fund. That fund would provide universal coverage for everyone in the state, yet allow citizens to purchase private insurance if they wanted.
That money breaks down to about $2,000 per person per year, which Kitzhaber said isn’t enough to provide for all Oregonians because the current health care system is too inefficient. However, by overhauling the system to be more cost-effective, the funds would be enough, he told the Register-Guard.
Let’s get this straight, shall we? His plan relies on diverting money already going to Medicare/caid, diverting other tax revenues from other sources, and “streamlining administrative costs”. Color me unimpressed. If the geezer drug giveaway is any indication, this plan is likely to cost much more than initially expected. Further, there’s going to need to be an additional government bureaucracy to administer this new “free” healthcare. A couple of years ago the cost of Measure 23 was estimated at $10 billion once the model assumed people with health insurance would drop it to sign on to the socialist medicine. Kitzhaber’s plan comes up $3.6 billion short of that estimate, and unless he’s got some sort of mystical power over administrative costs, the money is going to have to come from some place.
States have only two ways to raise money: taxes and debt. Being that debt is really just deferred taxation, states only have one way to raise money in the long run. With the heavy anti-growth sentiment in Oregon, the 5.8% unemployment rate (nearly a full percentage point above the national rate), and the cyclical volatility of Oregon’s primary revenue stream (personal income taxes), Kitzhaber’s plan would be a disaster for Oregon. Unfortunately, the same people who roundly rejected a similar proposal just a few years ago may be duped into ruining their economy with compassion this time.
