Grassroot Perspective – Aug. 26, 2003-Fantasyland; Consumer Driven Health Care Directory; Consumer Driven Health and the Modern Family; Using the Federal Employees’ Model: Nine Tests for Rational Medicare Reform; The AARP’s Grandchild Tax; A House Divided?; The Child Tax Credit and Welfare

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“Dick Rowland Image”

”Shoots (News, Views and Quotes)”


– Fantasyland

To jolt the health policy debate out of the August doldrums, nearly
8,000 physicians announced this week that they are supporting a
taxpayer-funded, single-payer health care system based on “an expanded
and improved version of traditional Medicare.”

In this fantasyland plan, the federal government would pay for all
physician and hospital care — without any co-payments or deductibles –
and also would cover prescription drugs, medical equipment, long-term
care, rehabilitation services, and dental care. The authors claim that
their plan, described in detail in the current Journal of the American
Medical Association, would SAVE $200 billion a year.

Where should we start?

First, today’s Medicare covers only about half the health care expenses
of seniors, with 90 percent of beneficiaries obtaining supplementary coverage.
The proposed universal version of Medicare would have to be very much
“improved” — and much more expensive — to even match the average private
health plans that the great majority of working Americans have today,
plans that are much more comprehensive than current Medicare.

The list could go on and on, but perhaps an article in The New York
Times this week is the best way to show where this all-you-can-eat
health care buffet would lead. It describes the experience of the
residents of Wales in the United Kingdom seeking dental care from their
government-run National Health Service.

“On a rainy Monday morning two weeks ago, 600 people turned up outside
Brynteg Dental Surgery, a tiny white-stucco office, to secure one of the
300 advertised appointments to see a National Health Service dentist,”
the Times reports.

“Wales is so lacking in government-subsidized dental treatment that some
people pitched tents overnight rather than miss a chance for a slot.

“Not anticipating the dental mob, Mr. [Steve] Acworth, 56, arrived too
late, which he said was too bad, considering he does not really have any
teeth to speak of.

“‘My crowns all fell off,'” he said. “‘I got some really bad dentistry
and it ruined all my root work. I have no front teeth and one pair of
molars, which meet on the right side of my mouth. I can’t bite
anything. …’

“Heather Davies, 25, the office manager who handed out numbers, deli
style, on the morning of registration, said she was still getting nasty
phone calls from some of the 300 people she had to turn away.

“People hurled curses and rude gestures at her. One man threatened her,
saying, ‘I know what time you get off work,’ Ms. Davies recounted. She
felt compelled to telephone the police. In fact, the office now has a
direct hot line to the police.

“‘Because they are paying national insurance, people feel they are
entitled to service,'” Ms. Davies said.”

How audacious!

So this is where it leads: Angry patients paying high taxes for
universal access to health and dental care, only to be turned away after
sleeping on sidewalks all night, with dentists calling the police to
protect themselves from desperate patients.

Donald Palmisano, the dynamic new president of the American Medical
Association, gets it right in saying single-payer systems lead to “long
waits for health care services, a slowness to adopt new technologies and
maintain facilities, and development of a large bureaucracy that can
cause a decline in the authority of patients and their physicians over
clinical decision-making.”

We also agree with Dr. Palmisano’s — and the AMA’s — prescription: “The
solution to the health care question is a mix of private and public
sector financing, with coverage and care remaining in the private
sector. The AMA’s health insurance proposal advocates refundable tax
credits inversely related to income, individually selected and owned
health insurance, and other reforms.”

The battles continue between advocates of government-run health care and
those, like us, who are trying to build a consumer-driven system
organized through competitive, free markets.

Yes, Americans are frustrated with the health care system – millions of
uninsured, high costs, and bureaucratic intrusion. But more bureaucracy
and centralized control in an era of dramatic new medical treatments and
technologies simply can’t prevail. The United States has an obligation
to lead the world to a better system, not turn back to the failed
systems of the last century.

– Consumer Driven Health Care Directory

Source: Galen Institute’s Center for Consumer Driven Health Care,

Employers, consumers, researchers, and others now can go to a central
location to find information about companies that provide consumer
driven health care products. This new directory, compiled by Joe Moser
and Greg Scandlen of the Galen Institute, contains product descriptions
and contact information for 126 companies that facilitate the delivery
of consumer-centered care, including insurers, third-party
administrators, software companies, and financial institutions. “This
directory is the most comprehensive listing of companies that provide
consumer driven health care services that I know of,” said Greg
Scandlen, director of Galen’s Center for Consumer Driven Health Care.
The directory will be frequently updated as the market evolves with new
companies and products.
Full text:
News release:

– Consumer Driven Health and the Modern Family

Author: Greg Scandlen

Source: Galen Institute, 8/7/03

“The way we pay for health care is based on an industrial-age image of
the American family that seldom applies today,” writes Greg Scandlen in
this commentary appearing in newspapers across the country. Women,
whether working or not, are especially hurt by this antiquated system.
“If you have ever moved, changed jobs, been unemployed, been divorced,
had to pay or receive child support, lived in a two-income family,
worked a part-time job, been self-employed, or married to an older
spouse, you would do better with a consumer-driven health care system in
which you could choose your own health insurance program and carry it
with you from job-to-job,” writes Scandlen.
Full text:

– Using the Federal Employees’ Model: Nine Tests for Rational Medicare

Author: Walton Francis

Source: The Heritage Foundation, 8/7/03

As Congress weighs Medicare reform options, “The choice is ultimately
between two models – consumer choice or detailed legislative and
bureaucratic control of benefit design, prices, and operational
decisions,” Walt Francis writes. While traditional Medicare is plagued
by inferior benefits and draconian price controls, the Federal Employees
Health Benefits Program (FEHBP) uses the mildest forms of government
direction and oversight to allow the forces of choice and competition to
determine health plan costs and benefits. Francis describes nine aspects
of the FEHBP system that will determine the effectiveness of Medicare
reform, including ensuring that the government functions as a good
business partner with health plans, allowing flexibility in benefit
design, and keeping regulation to a minimum.
Full text:
Francis also has a second paper comparing the performance of Medicare to
the FEHBP:

– The AARP’s Grandchild Tax

Source: The Wall Street Journal editorial, 8/11/03

“It’s a shame to see a powerful lobby like the AARP, formerly known as
the American Association of Retired Persons, weighing in with advice to
subsidize current retirees at the expense of their grandkids,” writes
The Wall Street Journal in an editorial. In a recent letter to House
Speaker Dennis Hastert, AARP Executive Director Bill Novelli outlined
his organization’s concerns with the Medicare legislation. Novelli
argues that means testing in the House bill is unfair because all
“working Americans pay into the program through the FICA payroll tax.”
“This is highly misleading,” writes the Journal. “The payroll tax funds
only part of the current system, not including the outpatient services
covered by Medicare Part B. The new drug benefit would likewise be an
unfunded liability.” The editorial asks, “We wonder how many of AARP’s
35 million members understand the lobby’s big government bias?”
Full text (requires subscription):,,SB106055662164050400,00.html?mod=opinion

– A House Divided?

Author: Merrill Mathews Jr., Ph.D.

Source: Tech Central Station, 8/14/03

Merrill Matthews looks at the importation of prescription drugs from the
traditional conservative and libertarian principles of security, free
markets, competition, and free trade. For example, he argues that
importation is not free trade because a country can simply allow its
drug manufacturers to make a generic version of a drug and sell it if
the drug manufacturer refuses to sell at a discounted price. Matthews
writes, “That practice is known as ‘compulsory licensing,’ and it is
nothing less than stealing a drug manufacturer’s intellectual property
if the company refuses to sell the drugs at bargain-basement prices.”
Matthews concludes, “A close look at what conservatives and libertarians
believe about the role of government and the economy can only lead to
the conclusion that we should oppose current attempts to legalize
Full text:

Above articles are quoted from Galen Institute, Health Policy Matters

”Roots (Food for Thought)”

– The Child Tax Credit and Welfare

The child tax credit should be part of the welfare debate.

By Dick Armey

“This will be a week from hell for Republicans!” declared House Democrat
Leader Nancy Pelosi in July as she led her troops into a procedural
battle in Congress. The cause: to protest the pace on expansion of the
child tax credit. Rep. Pelosi’s procedural motions were easily defeated
by the majority, but the challenge was clear- the Left is going to war
on the child tax credit.

The aggressive tactics began almost immediately after Congress passed a
version of President Bush’s jobs and growth tax cut package, which
increases the existing $600 child tax credit to $1,000. Even better, the
package emphasizes getting money into the hands of taxpayers as soon as
possible, and orders the Treasury Department to send advance payments to
families who qualify for the bigger child tax credit. As a result,
families are receiving the $400 increase this summer, rather than having
to wait until they file their 2003 returns next year.

The catch: not all families with kids are getting checks. The bill
excludes high-income families, and low-income families that don’t have
an income tax liability. For example, most families earning $10,500 to
$27,000 do not pay enough income taxes to qualify for income tax
refunds, and they will not receive $400 checks this summer.

The reason many families don’t qualify is because the Bush 2003 tax cuts
completely eliminate all tax liability for three million taxpayers. As a
result of this bill and other measures, many lower income working
families now pay little or no federal income tax. No income tax payments
mean no income tax refunds. Giving an income tax refund to someone who
doesn’t pay income taxes is not a refund; it’s a cash payment.

However, with respect to the child tax credit, the principle of “tax
refunds for taxpayers” is confusing and easily mischaracterized as
deliberately short-changing the poor. Congress quickly realized they
left themselves open to political attack, and scrambled to pass an
unnecessary bill. The Senate hastily voted 94-2 on June 5th to expand
the child tax credit provision for low-income working families. The
House then countered with its own 224-201 vote on a much larger
expansion. The primary differences — and they’re big ones — are that the
House bill also expands the credit to higher income families and extends
the measure through the decade.

That was the tempest in June and July. The August recess is a chance for
Congress to let the dust settle, and to let policymakers reassess the
agenda for the fall. Republicans are using this breather to make a very
smart strategic move: folding the legislation expanding the child tax
credit into welfare reauthorization.

In 1996, Congress sent President Bill Clinton a sweeping, historic
welfare reform bill. It made public assistance temporary and declared
that cash assistance was no longer an individual entitlement. The idea
is that welfare shouldn’t be a payment or an entitlement, but rather a
temporary helping hand designed to lift struggling people back to

Cash payments in the tax code — like the expanded child tax credit–
should be considered as part of America’s overall welfare policy. The
child tax credit should compete with other funding needs, such as child
care for the working poor, health insurance coverage for families that
have worked their way off welfare, and strengthening child support
collections. In fact, in this scenario, if Congress tries to spend too
much on welfare programs, it is possible that welfare reauthorization
will face budget hurdles the Senate. That’s good, because it will force
Congress to confront the actual welfare policy trade-offs for families
that don’t have to pay income taxes. Including the child tax credit in
the welfare reauthorization prevents the creation of a stealth new
welfare program in the tax code. It also helps shift the child tax
credit debate from one about “tax cuts” to more properly one about
government assistance to working families.

In thinking about welfare, Congress should also consider the role that
all forms of taxation play in keeping people from the workforce. Indeed,
Rep. Pelosi was right when she told a press conference on July 23rd,
“These [low income] people work hard to provide for their families, and
they pay taxes. They do pay taxes. Does anybody here who pays payroll
taxes think that that is not paying taxes? Or sales tax, that that’s not
paying taxes?”

She’s right, of course, and that’s why Congress passed the Earned Income
Tax Credit, another tax code spending program aimed at offsetting the
disincentives of the payroll tax. But why does Washington always create
new programs to address the problems caused by a high, complicated tax
code in the first place?

The fundamental reason is that all of these tax credits bring more
money, more decision-making, and more power to Washington, D.C. Instead
of demanding new tax credit programs, Nancy Pelosi and her colleagues
should propose reducing regressive taxes in the first place. At the
federal level, such an agenda includes holding the line against efforts
to expand the gas tax, which hits the working poor hardest, and backing
Personal Retirement Accounts, which will permit the working poor to
improve their Social Security returns and begin building real wealth.

The tax code should not be used as a welfare or income redistribution
system. In rolling the child tax credit into welfare reauthorization,
Republicans in Congress are doing the right thing in terms of both
policy and politics.

Above article is quoted from Citizens for A Sound Economy

”Evergeen (Today’s Quote)”

“A long life may not be good enough, but a good life is long enough.”
— Benjamin Franklin

”’Edited by Richard O. Rowland, president of Grassroot Institute of Hawaii, 1314 S. King Street, Suite 1163, Honolulu, HI 96814. Phone/fax is 808-591-9193, cell phone is 808-864-1776. Send him an email at:”’ ”’See the Web site at:”’