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Jewish World Review Feb. 14, 2007 / 26 Shevat, 5767 Schwarzenegger's folly By John Stossel http://www.JewishWorldReview.com | Gov. Arnold Schwarzenegger wants all Californians to have medical insurance. So he's going to force them to have it. Schwarzenegger abandoned his opposition to mandated employer-based health insurance and embraced the idea as his own. "Everyone in California must have insurance. If you can't afford it, the state will help you buy it, but you must be insured," Schwarzenegger said last month. Of course, his "solution" won't solve the problem. By making medical care look cheap to people, expanded insurance will push prices up even faster. Everyone will end up paying more. But politicians benefit because the costs will be hidden. The governor also wants to enlarge the state's coverage for children by including people with incomes as high as $60,000 for a family of four. Imagine that: You can make $60,000 a year and put your kids on the dole. This ought to dispel any notion that Schwarzenegger is a believer in small government. Here he is following former Republican Massachusetts Gov. Mitt Romney down the path of state socialized medicine. Romney said compulsory insurance would cost a person $2,400 a year. But now we know it's at least $4,560. This is not to say we don't have a medical mess on our hands. We do, but the problems have their roots in existing government activity. More such activity is unlikely to make things better. The root of the problem is that few people face the true cost of medical care. Medicare and Medicaid beneficiaries don't because taxpayers pay their bills. People with employer-based medical insurance don't because insurance policies shield them from it. Since they pay only small co-pays when they see a doctor, they don't ask, "Do I really need that test?" but rather, "Does my insurance cover it?" People who don't face the full cost of their choices don't act like cost-conscious consumers. Higher prices result. With a rational government policy, people would save money for routine medical care and buy insurance for solvency-threatening illness. After all, we don't buy auto insurance to pay for oil changes and worn-out windshield-wiper blades. But today, people expect medical insurance to cover routine physical exams because someone else seems to pay the premiums. All this hurts people who buy their own insurance or don't have it. It would be good if they could buy a basic high-deductible catastrophic policy. For a healthy young person, such a policy would be relatively cheap. But because of special-interest lobbying, most states mandate that insurance cover things that most people would never buy if they were paying the cost openly — things like Viagra and substance-abuse counseling. The Council for Affordable Health Insurance (CAHI) reports that states have imposed 1,824 mandates on insurance. This makes even a high-deductible policy absurdly expensive in many states. Government further harms us by not permitting cross-state competition. As a New Yorker, I can't buy a cheap policy sold in Iowa, a state with fewer mandates, because I may only buy from companies that are subject to New York's costly regulations. That's nuts. The upshot is that, however well intentioned, government regulation of medicine and insurance brings us mostly headaches, and Gov. Schwarzenegger's plan will bring Californians even more. But that should be between him and them. They should have the right to fail. Many disagree with that. The normally wise Wall Street Journal editorial board says the courts should strike down the governor's plan because of ERISA, the federal law that presumes to supersede state laws on worker benefits. But forbidding California to pursue dumb ideas is a mistake. As I've pointed out the last two weeks, the American founders showed their genius by dividing power between the states and central government. Let the states experiment! Universal coverage is a feel-good idea that many people want Washington to impose. Better to have models of failure in individual states so we all don't have to suffer! We need living reminders of collectivism's faults. Without the Soviet Union, I fear that Americans will forget its horrors. So states should be free to demonstrate the horrors without interference from Washington. The feds should let us learn. Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. JUST OUT FROM STOSSEL Myths, Lies and Downright Stupidity: Get Out the Shovel --- Why Everything You Know Is Wrong   Stossel mines his 20/20 segments for often engaging challenges to conventional wisdom, presenting a series of "myths" and then deploying an investigative journalism shovel to unearth "truth." This results in snappy debunkings of alarmism, witch-hunts, satanic ritual abuse prosecutions and marketing hokum like the irradiated-foods panic, homeopathic medicine and the notion that bottled water beats tap. Stossel's libertarian convictions make him particularly fond of exposes of government waste and regulatory fiascoes. Sales help fund JWR. JWR contributor John Stossel is co-anchor of ABC News' "20/20." To comment, please click here. Archives © 2007, by JFS Productions, Inc. Distributed by Creators Syndicate, Inc.

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