Tax the Rich to Doctor the Poor

50 Million uninsured may agree, free health insurance paid for by the rich would be ideal. This week’s ‘K’s Law’ will explore how legislation designed to help the uninsured will surely make life worse for them.

The law currently being pushed through the congress would levy a tax on individuals earning $200,000 or more per year and couples earning $250,000 or more per year. This tax would raise the 600 billion dollars necessary to provide health insurance to the uninsured. The theory behind the legislation would be to make health care better for the currently uninsured.

When people who are paying for insurance realize there is a free plan available they will soon cancel their private policies and rightfully so, their momma’s didn’t raise no dummies. In addition, companies who are providing insurance for employees will also be incentivised to drop their health plans knowing their employees can get coverage from the public plan. The public plan will soon be overflowing with people.

Scott Gottlieb of The Wall Street Journal Reports:

As patients shift to a lower-paying government plan, doctors’ incomes will decline by as much as 15% to 20% depending on their specialty. Physician income declines will be accompanied by regulations that will make practicing medicine more costly, creating a double whammy of lower revenue and higher practice costs, especially for primary-care doctors who generally operate busy practices and work on thinner margins. For example, doctors will face expenses to deploy pricey electronic prescribing tools and computerized health records that are mandated under the Obama plan. For most doctors these capital costs won’t be fully covered by the subsidies provided by the plan.

Government insurance programs also shift compliance costs directly onto doctors by encumbering them with rules requiring expensive staffing and documentation. It’s a way for government health programs like Medicare to control charges. The rules are backed up with threats of arbitrary probes targeting documentation infractions. There will also be disproportionate fines, giving doctors and hospitals reason to overspend on their back offices to avoid reprisals.

The 60% of doctors who are self-employed will be hardest hit. That includes specialists, such as dermatologists and surgeons, who see a lot of private patients. But it also includes tens of thousands of primary-care doctors, the very physicians the Obama administration says need the most help.

Doctors will consolidate into larger practices to spread overhead costs, and they’ll cram more patients into tight schedules to make up in volume what’s lost in margin. Visits will be shortened and new appointments harder to secure.

Right or wrong, more doctors will close their practices to new patients, especially patients carrying lower paying insurance such as Medicaid. Some doctors will opt out of the system entirely, going “cash only.” If too many doctors take this route the government could step in — as in Canada, for example — to effectively outlaw private-only medical practice.

Inevitably, this legislation will cause the availability and quality of health care to drop significantly. Those people who were previously uninsured will undoubtedly now have worse health care.

It was the intention of the law to make health better for the uninsured, but as always, K’s law holds true.