Policy Documents

ObamaCare Policy Myths: Warnings from a 1980s HMO Executive

The administrative state regime of government central planning promoted from the 1930s until today is based on the fatal conceit that Frederick Hayek warned against in The Road to Serfdom. That is the belief that well-meaning government officials could achieve many utopian goals, including ideal access to and quality of medical care at a reasonable cost.

Ruling-class elitist arrogance and overreach has been discussed for many years by Thomas Sowell, and recently, famously and insightfully, by Angelo Codevilla in the July/August issue of The tyranny that results from ruling-class control of the government is apparent, and their policy is based on pet theories promoted by the healthcare “experts and policy makers” who are the army for the ruling class, selected for commitment to the agenda, and credentialed and rewarded to intimidate opposition and silence dissent.

President Barack Obama, a Harvard lawyer with no experience inmedicine or health-related policymaking, is not the first chief executive to pursue a utopian plan for medical reform that is based on assumptions about medical science, human behavior, politics, and economics that are just plain wrong.

After Medicare and Medicaid rolled out with much higher costs and utilization than expected, there was a national concern about costs and access. The health policy experts decided that managed care was the answer. The Nixon administration introduced the Health Maintenance Act of 1973, funding and promoting managed care by a nonprofit entities governed by a community board, with federally defined benefits and premium packages. Federally qualified health maintenance organizations (HMOs) offered a single-level individual or family premium, no limits on preexisting conditions, first-dollar coverage or a very small deductible or copay on visits, and comprehensive coverage that included comprehensive preventive care—riddled, however, with the requirement to obtain care from the HMO physicians, or requirements for approval or preauthorization for care inside and outside the HMO. If this sounds a lot like the mandated, government-designed plans in Obamacare, it's because it was.