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Health Freedom Watch
August 2007


More Facts Needed for Health-Policy Debate
By Sue Blevins

A west-coast physician phoned me after receiving the latest hardcopy edition of Health Freedom Watch.  He wanted to know how to reconcile what he’d read there—that people in countries with universal medical coverage are often denied care—with Michael Moore’s documentary Sicko, which argues that such people are rarely if ever denied care.

I told him that many years ago I worked as a registered nurse in Canada and experienced that country’s medical system first hand.  (I also told him I am no longer a registered nurse, but that my past experience is invaluable in comparing health-care systems.)  Canadians had to get permission from their family doctors before seeking non-emergency services, and it was illegal to pay privately for health care covered by the government.  These policies still exist and continue to infringe on people’s freedom in many Canadian provinces, according to Dr. Jacques Chaoulli, a physician from Quebec.  Chaoulli challenged the restriction on private payment in Quebec and won—but only in that province. 

Considering the distorted picture given of the world’s health-care systems, it would behoove everyone to look squarely at the facts before making comparisons.  As the debate heats up over single-payer health care, IHF will provide facts, with documentation, to help you become better informed.  In turn, we hope you’ll inform your state and national policymakers. IHF encourages readers to use our information liberally in writing letters to the editor, op-eds for local and national newspapers, comments on blogs, and in making calls to radio and TV shows.  As we’ve said for many years: “We provide you with information about health freedom, and you decide what to do with it!”


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Does the Single-Payer Medicare Program Deny Payment for Health-Care Services?

National Health-Policy Q&A

Q:  Does the Single-Payer Medicare Program Deny Payment for Health-Care Services?

A:  Yes.  In fiscal year 2004 Medicare denied over 158 million claims; approximately 5 million of those denied claims were appealed to the first level in the process; and about 113,000 denied claims were appealed to the third level of the process where administrative law judges (ALJs) hear and decide appeals, according the Government Accountability Office (GAO).  “An appeal may consist of more than one denied claim,” notes GAO. 

The Office of Medicare Hearings and Appeals (OMHA) reports that Medicare contractors process about 1 billion claims for payment annually, of which 10 percent are denied each year.  OMHA was appropriated $59 million for fiscal year 2007 to handle denied-payment issues and appeals.  Its budget will increase to $70 million in 2008.


  • Government Accountability Office, “Medicare: Concerns Regarding Plans to Transfer the Appeals Workload from SSA to HHS Remain”, Report # GAO-05-703R, June 30, 2005: (
  • U.S. Office of Management and Budget and federal agencies, “Detailed Information on the Office of Medicare Hearings and Appeals Assessment”:  ( and (

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Genetic Research on Babies without Parents’ Consent Opposed

The Minnesota Department of Health collects and stores blood and DNA of newborn babies without their parents’ consent, according to Citizens’ Council on Health Care (CCHC), a Minnesota-based health-policy organization. CCHC strongly objects to this activity as a violation of privacy and the ethics of informed consent.  

“The blood and DNA of at least 670,000 babies is being stored indefinitely and claimed as State property. The [Minnesota health] department is giving away baby DNA for genetic research,” said Twila Brase, president of CCHC.  She stressed that this violates Minnesota’s newborn-screening and genetic-privacy laws.

In a July 12 written request to the Minnesota Department of Health, CCHC called on the department to comply with state law by:

  • Destroying all newborn blood specimens held without the written informed consent of parents;
  • Demanding immediate recall of all such specimens given to the Mayo Clinic, University of Minnesota, and other researchers without the written informed consent of parents;
  • Destroying all such specimens as soon as received; and
  • Publicly affirming that they have been destroyed.

As of August 15 CCHC had not received assurance that its requests were being met, according to a press release.  Brase stressed, “For ten years the Heath Department has been illegally retaining the blood and genetic information of more than 670,000 children…. Every day the Governor fails to act is another day these children’s genetic rights are violated and their property exploited.”

Will Minnesota uphold the ethics of parental consent before babies’ blood and DNA are collected, stored, and shared with researchers?  CCHC intends to make sure it does.


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To Mandate, Or Not to Mandate
By Greg Scandlen

Debate is underway within politically conservative circles between those who think people should be forced to buy health insurance coverage and those who think freedom includes the liberty to go without health insurance. The latest example is a point-counterpoint between Merrill Matthews, executive director of the Council for Affordable Health Insurance (CAHI), and The Heritage Foundation's Bob Moffit. I know and respect both gentlemen, so it distresses me that the old "divide and conquer" strategy is working so well.

Long-Standing Dispute

This debate is part of a long-standing dispute between Heritage and the rest of the free-market community. In September 1992, when I was running CAHI, I wrote to Stuart Butler, Heritage's vice president of domestic and economic affairs, objecting to a Heritage paper supporting individual mandates created under the guise of "consumer choice." In July 1993, Cato Institute President Ed Crane wrote a similar letter to Butler, and in June 1994 National Center for Policy Analysis (NCPA) President John Goodman wrote to Heritage President Ed Feulner objecting to Butler's support of community rating and guaranteed issue, state mandates that raise the cost of insurance and thus increase the number of uninsured.

More recently, Butler served on the events committee of the National Academy of Social Insurance, an organization that encourages and celebrates the growth of government programs such as Social Security, Medicare, and Medicaid.

Tax Reform Consensus

During the 1990s, CAHI, Heritage, Cato, and NCPA came together under the auspices of the Consensus Group, organized by Galen Institute President Grace-Marie Turner, to identify and work on the issues that united them.

The tax treatment of health insurance was the one issue all agreed on—specifically, supplementing the tax exclusion of employer-sponsored health insurance with a tax credit for individually purchased coverage. This has been a hallmark of the Bush administration's health agenda as well, but it went nowhere in a Republican Congress and has even less chance now that Democrats are in control.

So, The Heritage Foundation is back to supporting mandatory coverage along with a Massachusetts-style "connector" that extends favorable tax treatment to individually owned coverage, but only for a limited number of state-approved policies. Heritage is actively encouraging such programs in state legislatures nationwide.

Too Much Government

Heritage attempts to address the concerns of its free-market colleagues by proposing an "opt-out" provision: If someone is willing to put up a $10,000 bond, he or she should be allowed to opt out of the insurance mandate. It is a matter of "personal responsibility," according to Heritage.

This argument has many problems. Because the opt-out provision is unlikely to be adopted anywhere, it amounts to rhetorical window dressing. Second, people are already "personally responsible" for paying the bills they incur. We don't need a new law for that.

More importantly, it completely misses the reality that states have made a hash of the insurance market with excessive regulation and mandates. Coverage would be far more affordable if states simply repealed the misguided regulations they have enacted over the past 20 years.

People don't buy coverage today because the available coverage offers poor value for the premium price. Their refusal to purchase should be seen as an important signal to legislators and the insurance industry that they have gone off-track. Forcing people to buy something they don't want solves nothing.

Mandating insurance coverage ignores the fact that it is precisely third-party payment (both public and private) that has created almost all of the problems in health care. We need to reduce the role of third-party payers, not increase it by mandating everyone be covered by third-party payers for virtually everything.

Greg Scandlen is president of Consumers for Health Care Choices in Hagerstown, Maryland: ( 

Source:  This article was originally published in Health Care News, August 1, 2007: (  Reprinted with permission.

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Health Freedom Watch is published by the Insitute for Health Freedom. Editor: Sue Blevins; Assistant Editor: Deborah Grady. Copyright 2007 Institute for Health Freedom.