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Health Freedom Watch
January 2006


Universal Insurance Mandate Leads to Political Interference in Private Health-Care Decisions

Republican Governor Mitt Romney is proposing that all citizens of Massachusetts be required to purchase health insurance, join a government-subsidized program, or face a financial penalty.  His plan is being touted as a free-market alternative to proposals being pushed by advocates of single-payer health care.  Its compulsory feature is similar, in some ways, to the mandate proposed by congressional Republicans after the Clinton administration called for universal coverage in the fall of 1993.  


What's wrong with the government mandating individuals to purchase health insurance?  


The Cato Institute analyzed the Republican's 1993 plan and pointed out why a mandate is dangerous to liberty.  Following are excerpts from that Cato Policy Analysis:  


         "Once we presume that government is ultimately responsible for guaranteeing that every American has health insurance, we also guarantee a permanent role for politicians in determining an accompanying set of issues. Once government mandates insurance coverage, it must define what constitutes 'adequate' insurance coverage for each citizen."


         "By endorsing the concept of compulsory universal insurance coverage, [the bill] undermines the traditional principles of personal liberty and individual responsibility that provide essential bulwarks against all-intrusive governmental control of health care."


         ".[The bill] makes the fatal mistake of endorsing compulsory, government-defined, universal insurance coverage. That fundamental feature...opens the door wide to extensive political interference in private health care decisions."


         "Sweeping every American into a mandatory health insurance dragnet is not only offensive on philosophical grounds; it is also impossible to achieve.... Even under Canada's system of national health insurance, an estimated 2 to 5 percent of the population in the province of British Columbia is uninsured. Despite 41 state laws that require motorists to purchase automobile liability insurance, one in seven automobile drivers remains uninsured."


         "It is also rather difficult to enforce mandates on people who fall between the cracks of government databases. Not even heavy reliance on tax penalties can overcome the Internal Revenue Service's inability to track down millions of Americans who refuse, or fail, to file tax returns. And every 10 years the Census Bureau demonstrates that it cannot locate several million citizens."


         "Thus, one can expect that any...enforcement offensive to coerce the voluntarily uninsured into signing up for a mandatory coverage scheme will become both prohibitively onerous and politically pointless at the margin."


         "When those costs are added to the havoc that further political control of the entire health care market would wreak, even subsidizing the full amount of uncompensated care with public funds looks like a better buy for American society."


Of course, this is not to say that a single-payer system for the uninsured would be better than mandated insurance. As noted in an article titled "Universal Health Care Won't Work-Witness Medicare," (written by Sue Blevins and published by Cato in 2003):   


         "At first glance, many Americans might find the idea of single-payer health insurance appealing, given current economic conditions and high health insurance costs. However, before we accept such a drastic shift in national health policy, we should examine how single-payer health insurance could affect all individuals' health care costs, choices and privacy."


         "If history is any indication, any single-payer initiative will end up costing much more than advocates claim. That, in turn, will lead to higher taxes and/or rationing under which the government will determine which medical treatments will and will not be covered. How do we know this will happen? Because single-payer health care has already been empirically tested on seniors in the United States." 


Medicare is the largest single payer of health care in the United States and the world.  Thus, for Americans to understand how a compulsory program would affect them, they need only look to Medicare to see its impact on individual freedom. They can see clearly how a universal mandate for health insurance leads to political interference in private health-care decisions for all.



  • "Unhealthy in Massachusetts: The Romney Plan Doesn't Cut It," National Review Online, January 26, 2006: (
  • "Opinion Pieces Address Health Insurance In Massachusetts," Medical News Today, January 17, 2006: (
  • "Mass. Gov. Romney's Health Care Plan Says Everyone Pays," USA Today, July 4, 2005: (
  • "Nickles-Stearns Is Not the Market Choice for Health Care Reform," by Tom Miller, Cato Policy Analysis No. 210, June 13, 1994: ( 
  • "Universal Health Care Won't Work-Witness Medicare," by Sue Blevins, April 11, 2003: (

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New York City Begins Tracking and Monitoring Diabetics

Last month the New York City Board of Health approved a plan to create an electronic database to monitor the blood-sugar levels of diabetics. Under the plan, laboratories will be required to submit abnormal blood-test results to the board. Then patients will be contacted and referred to a physician or a community clinic for follow-up treatment, which might include at-home testing kits, medicine, exercise regimes, and nutritional counseling. Proponents argue the program can prevent costly and devastating health problems associated with diabetes. But others have serious concerns about privacy and liberty.

For example, on December 19 the Washington Times editorialized against the idea in "The Sugar Police": "In an appalling extension of the nanny state, New York is slated to become the first city to monitor diabetics' blood-sugar levels. It plans to register them like HIV or tuberculosis sufferers and nag them when their levels aren't healthy enough. Drop the cupcake; here come the sugar police." The Times continued, "No one denies diabetes' ill effects on Americans.... But who put city bureaucrats in charge of peoples' eating and exercise habits? The sugar police don't want to answer that question. In reality they are trying to install themselves as regulators of citizens' personal lives."

On January 11 the Washington Post reported, "The unprecedented step is being hailed by many health experts as a bold attempt to improve care for diabetes, one of the nation's biggest medical problems, which is burgeoning into a crisis because of the aging population and the obesity epidemic." But, the Post continued, "Some public health experts, ethicists and privacy advocates, however, say that the initiative raises serious concerns about confidentiality and is an alarming government intrusion into people's medical care."

Some concerns about the diabetes tracking system cited by the Post include:

Greater Government Intrusion: Lawrence O. Gostin, director of the Center for Law and the Public's Health at Georgetown and Johns Hopkins universities, stated, "There are lots of good reasons to do this kind of thing, but the questions it raises all have to do with the nanny state: Should the government be collecting this kind of information? Should it be intervening like this? You can imagine it getting to the point where you have a public health worker showing up at your door and asking, 'Did you remember to exercise, eat right and take your medication today?' "

Invasions of Privacy: Robin Kaigh, a New York lawyer noted, "It's an incredible invasion to privacy to have your sensitive medical information grabbed by the city of New York. It shocks the conscience that they [public health department] are not even required to tell you this is happening." Twila Brase, president of Citizens' Council on Health Care, said, "It's a little creepy that it's being done so undercover-in the laboratories-where it's completely out of sight of the doctor-patient interaction." Sue Blevins, president of the Institute for Health Freedom, pointed out, "This is really a recipe for invasion of privacy. Under the [existing federal medical-privacy rule], personal health information can be shared without consent for many purposes. All it takes is a click of a mouse."

Coercion and Penalties: Wendy K. Mariner of Boston University's schools of public health and law, told the Post, "Government concern often shifts to government coercion. Today we're telling people what you should do voluntarily. Tomorrow it may be we're telling you what to do or you'll be penalized."

Mariner also pointed out that because New York is often a leader in public-health measures, the decision is likely to prompt other jurisdictions to follow, for diabetes and perhaps other conditions.

  • "Medical Laboratories Could Be Compelled to Report Citizens' Blood-Sugar-Test Results to Local Governments," Health Freedom Watch, July 2005: (
  • "New York City to Register, Monitor 500,000 Diabetics" Bloomberg News Service, December 14, 2005: (
  • "The Sugar Police," Washington Times, December 19, 2005: (
  • "New York City Starts To Monitor Diabetics," Washington Post, January 11, 2006: (

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New Study Finds Medicare's Administrative Costs Are Underestimated

It is frequently asserted that Medicare's administrative costs are only 2 percent, compared with more than 20 percent for the private sector-and concluded that a "single payer" system would produce enough cost savings to cover all the uninsured.


A study just released by the Council for Affordable Health Insurance (CAHI) shows that Medicare's costs are underestimated, and private costs overestimated.  Moreover, the additional private costs do return some value.


If hidden administrative costs are added in, Medicare's costs are seen to be about 5.2 percent. Private sector costs, calculated in a comparable way, are 8.9 percent, or 16.7 percent if commissions, premium tax, and profit are included.


Because the percentage is calculated as administrative costs divided by total claims, Medicare is favored because it covers older and sicker people with average claims of $6,600 per year, compared to $2,700 for privately insured persons.  Correcting for this factor, Medicare's administrative burden would be in the range of 6 to 8 percent for a population similar to that covered by private insurance.


Private companies spend more in scrutinizing claims before payment.  Medicare relies more on post-payment investigation, and such costs are allocated to law enforcement rather than administration.


While private insurers pay commissions to bring in premiums, the government forces employers to collect and process Medicare "premiums." Additional costs of raising money for Medicare (such as interest on government debt and the cost of collecting the general revenues that subsidize Part B) are large but not estimated in the study.


CAHI concludes that the real issue is not which sector has the lower administrative costs, but which does the better job of providing good coverage for the best price. Even with the price controls imposed by the government, CAHI believes that the private sector provides much better value for money.


The study does not consider the administrative costs imposed on physicians and hospitals, the costs of fraud by carriers and providers, the economic consequences of the taxes required to support Medicare, or the other effects of Medicare on the medical market.


Source:  "New Study on Medicare's Hidden Administrative Costs," AAPS News of the Day...In Perspective, January 15, 2006, 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 2006 Institute for Health Freedom.