Hidden costs of free health care

As I consider the health care debate raging in our nation, or maybe worse only in our capital, I can't help but think of the phrase,"There's no such thing as a free lunch." When I am on company business out of town, I keep track of my meals and hotels and get reimbursed at the end of the month. At the time, it seems free, but the company ultimately pays those expenses which is just that much less that they can pay me. Whenever you go shopping, you may see a larger than normal package saying,"20% more FREE!" or you may see a car commercial say,"0% financing for 60 months". Such advertising might give you the impression that you're getting something for nothing. Obviously, that company could not just give away their product or service; somebody, probably you, is paying for it. You will never get that extra 20% unless you buy the normal amount, and you will never get a 0% loan unless you buy the car.

Now apply this logic to health care. To counter the estimated health care system overhaul 10-year pricetag of $1,000 billion, President Obama recently boasted of $600 billion in “savings” for the same time period. However, in the fine print, over half of that "savings" would come from tax hikes on those earning over $250,000 a year, closing loopholes and charging higher fees for some government services.

So while we are being told this will be free health care for all, it comes at a cost to the rich, those taking advantage of tax loopholes and those using some government services, whatever that means. Well, I earn less than $250,000 a year, so there is no cost to me there.

However, I am taking advantage of tax laws such as the mortgage interest, property tax and charitable giving deductions. It has been proposed by some politicians to reduce the amount you can deduct. Will this not this essentially raise your tax burden? Is this the loophole to which He is referring?

Also, while only a small percentage of taxpayers earn over $250,000 per year, I bet that they employ the remainder earning under that amount. In all of my years of being employed, it was always by a rich person, group or company not by the poor, and as I stated in an earlier post, when you raise their taxes, which is just one more cost of doing business, they must either raise their prices, unless it's a commodity, or cut other costs such as labor.

In summary, what good is it to lower the cost of my health care if it will result in higher income taxes, higher government fees or worst of all no job?

The White House Office of Management and Budget Director Peter Orszag said, “We are making good on this promise to fully finance health care reform over the next decade.” On the backs of whom...the producers?

Consider SCHIP, what I believe to be a precursor and warmup to universal health care. Congress earlier this year expanded this program by increasing the federal cigarette tax by 62 cents per pack. However, Dr. Adam Goldstein, director of the University of North Carolina Tobacco Prevention and Evaluation Program recently said that it was not inconceivable that adult smokers, now more than 20 percent of the population, could be reduced to less than 5 percent in 20 years. Besides the additional restrictions on smoking advertising, one of the factors that could cut into tobacco use is this higher tax. Eventually, the funding for SCHIP will dry up. Do you think that SCHIP will just dry up with it? If you do, you must be smoking something other than cigarettes. To paraphrase a great President, "A government program is the closest thing to eternity that we'll see on earth."

What happens when the funding or "savings" for this much larger program dries up? When the rich are poor, the tax deductions are gone and people cannot afford to pay other government fees, who will fund this program? Will this program die on the vine?

In another example, H.R. 1256, brand new anti-smoking legislation that gives the FDA sweeping authority to regulate tobacco products, will be paid for by a new user fee imposed on the industry. The Congressional Budget Office estimated that assessments could rise from $235 million in 2010 to $712 million in 2019. Again, will the industry absorb these costs or will the consumer, in this case the smoker? The FDA will have to expand to enforce this legislation. After all smokers either die or quit smoking because they can no longer afford the extra fees and taxes, will this expanded FDA contract?

Here are just three government programs either passed into law, about to be passed into law or going to be passed into law that make promises of free health care (golden eggs) but gloss over their direct costs not to mention their indirect costs. What happens when the golden goose that laid those eggs is killed?