Sally Pipes:

Another common argument for more government insurance is that the uninsured shift costs to private payers when they avail themselves of the health-care safety net — thus jacking up health-care premiums in the private sector. Many reform advocates make this claim, including Sen. Edward M. Kennedy (D., Mass.) and Sen. Baucus in an op-ed in this newspaper. This is not the case. In the first place, a recent CBO report (“Key Issues in Analyzing Major Health Insurance Proposals, ” December 2008) is clear on one issue: Working to achieve universal coverage through expanding government’s role in health care will increase total costs and therefore either increase premiums or taxes, not reduce them. As for the argument that the uninsured shift costs, Mr. Elmendorf was quite direct dispelling this myth in his testimony before Mr. Baucus’s committee. “Overall,” he said, “the effect of uncompensated care on private-sector payment rates appears to be limited.” In fact, insofar as there is a cost shift, it derives from the government programs Medicare and Medicaid, which reimburse providers at rates roughly 20% to 40% lower than the private providers. This has been detailed by the widely used and quoted health consultant firm, the Lewin Group. But this is conveniently ignored by those who want to expand government health care. Preventative care, disease management and electronic medical records are also constantly cited as big cost-savers. The idea here is that if our health-care system was set up to prevent disease rather than just treat it, and could do so without duplicative paper records, it could save money. It’s a great hypothesis, but research does not indicate it amounts to much. “In many cases,” as Mr. Elmendorf testified regarding such initiatives, “those studies do not support claims of reductions in health spending or budgetary reductions.” Americans like their current health care, its plethora of choice and its intensive, high tech approach to fixing our ailments. A Gallup survey in December reported that “on balance, Americans still favor maintaining the current system, 49% to 41%.” But the CBO is very clear that saving money on health care involves doing less of the very things Americans like the most. “Studies attribute the bulk of the cost of growth to the development of new treatments and other medical technologies,” the CBO notes in a report issued last December, later adding, “Given the central role of medical technology in cost growth, reducing or slowing spending over the long term would probably require decreasing the pace of adopting new treatments and procedures or limiting the breadth of their application.” In other words, reducing costs means rationing the care of those who currently have private insurance and Medicare.