Obamacare’s 5 Flaws (Economic Effects Edition)

While most of my comments on the problems with what is passing for Health Care reform in Congress have focused on the "Culture of Life" issues, there has also been plenty of discussion about the economic effects it will have. I recently came across this excellent look at those flaws by Heritage Foundation expert Nina Owcharenko. She also gives some alternatives that are definitely worth considering. Here is a summary of that look with a link to the full dissection:

Obamacare’s five flaws

September 2, 2009 By Amanda Reinecker

There is little disagreement among liberals and conservatives that America's current health care system needs serious reform. But the Left's plan is seriously flawed.
Heritage Foundation expert Nina Owcharenko dissects "five major faults with the health care bills" being pushed in the House and Senate.
1. The public "option." Both proposals would create a government-run insurance plan which proponents claim would foster honest competition among private insurers. But how can there be fair competition when one of the players -- Washington -- is both writing the rules and playing the game? What's more, this scheme could lead millions of Americans to lose their private health insurance.
2. Centralized regulation. Both the House and Senate bills would result in sweeping and complex federal regulation of health insurance. This would take oversight away from states and concentrate it in Washington -- and this oversight is best left at the state level.
3. Greater dependency on government. Both bills would expand existing government health care program and introduce massive new taxpayer-funded subsidies to buy health insurance. This would leave millions of Americans dependent on government for their health care.
4. Employer mandate. The plans would force employers to provide coverage for all employees or face a massive tax. These "play-or-pay" mandates will raise prices, stifle economic growth and particularly hurt low-wage earners.
5. Individual mandate. Both bills require that all Americans purchase health insurance. Those without coverage or whose plans don't meet the new federal standards would face tax penalties. Special interests are sure to "lobby intensively to expand the legally mandated health benefits, medical treatments and procedures, and drugs that all Americans must buy under penalty of law."
Taken together or individually, these flaws would inflict serious damage on an industry that represents one-sixth of our nation's economy.
Instead, Owcharenko suggests the government refocus its efforts on incrementally introducing real, cost-effective reform. Such a reform would grant more autonomy to individual states; extend tax relief to everyone who purchases private health insurance, regardless of employment; and rein in runaway spending on programs like Medicare and Medicaid.
"Policymakers need to proceed slowly and deliberately," advises Owcharenko, "making sure that the initial steps they take are not disruptive of what Americans have and want to keep, actually work, and do not result in costly and damaging and unintended consequences." So far, they're on the wrong track