"President Barack Obama says that he can pay for his goal to provide health care insurance for every American without it. Why isn't that good enough for you?"

Elder: Yes, the President says that he can "pay for" his goal of providing health insurance for every American without it. Care to bet on that?

When government proposes a program, the ultimate price tag inevitably exceeds projections. In "Why Government Doesn't Work," libertarian Harry Browne wrote: "Most older people now find it harder to get adequate medical service. Naturally, the government points to the higher costs and shortages as proof that the elderly would be lost without Medicare -- and that government should be even more deeply involved. When Medicare was set up in 1965, the politicians projected its cost in 1990 to be $3 billion -- which is equivalent to $12 billion when adjusted for inflation to 1990 dollars. The actual cost in 1990 was $98 billion -- eight times as much."

Congress, from the outset, placed Medicare on autopilot because of a growing, aging and longer-living elderly population. Congress, from time to time, attempts to "rein in" increased costs by imposing fixed reimbursement schedules. This simply creates an incentive on the part of doctors and hospitals to schedule a lot of unnecessary tests or to "pingpong" patients from specialist to specialist in order to evade the artificial limits. This also forces doctors and hospitals to charge more from private carriers to offset the low reimbursement rates provided by Medicare.

Everybody gets hurt -- the elderly because the medical profession becomes less efficient, innovative and cost-effective, and the non-elderly because practitioners charge them more to offset the lower reimbursement rates provided by the government.

"We need to require all employers to provide health insurance."

Elder: We end up paying more, not less. During World War II, Congress imposed wage freezes. Business people who wished to attract employees had little recourse but to offer non-cash benefits. The government, recognizing business people's "plight," allowed business to deduct the cost of health insurance as a business expense. This put, for the first time, something between doctor and patient, distorting the traditional fee-for-service system, used so successfully up until then. It also created the incentive to get your medical care through your employer rather than pay for it directly.

I once lived in a large apartment complex that included utilities paid by the landlord. During hot summer months or cold winter months in my previous apartment -- where I paid for utilities -- I turned the thermostat off when I left the apartment and put on the heat or air when I returned. Once I moved into the "utilities-included" apartment, I left my heat and air on all day, thus ensuring a perfect climate when I came home -- sometimes as long as 12 hours later.

Now, I knew that somehow I paid, but the cost would be distributed over all the tenants in the building. So the conscientious tenant who cut off his or her air subsidized my carefree use of utilities. Eventually, we all pay, but the effect becomes gradual and diffused over a number of people who have little incentive to "conserve." Continued...