Shock: People take advantage of free government health care

posted at 10:10 am on October 17, 2008 by Ed Morrissey

Hawaii has ended an experiment with universal health care for children because it proved a little too successful.  Seven months after launching Keiki Care, a flood of enrollments caused it to run over budget.  The social engineers in Hawaiian government just learned a lesson about free-market economics and the effect of government distortion (via The Corner):

Hawaii is dropping the only state universal child health care program in the country just seven months after it launched.

Gov. Linda Lingle’s administration cited budget shortfalls and other available health care options for eliminating funding for the program. A state official said families were dropping private coverage so their children would be eligible for the subsidized plan.

“People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink, the administrator for Med-QUEST at the Department of Human Services. “I don’t believe that was the intent of the program.”

Fink gets this entirely wrong.  Taxpayers didn’t get this for free.  They paid for it with their taxes.  Keiki Care took taxes and directed it into creating a universal health-insurance program for children, and apparently didn’t set any income requirements for entry.  Why wouldn’t the taxpayers whose money funded the risk pool take advantage of it?

Furthermore, the surprise of Fink and Lingle at the effect of a “free” service in a competitive marketplace only proves the economic illiteracy of our governing class.  What happened to the sale of Internet browsers when Microsoft offered Internet Explorer for free?  Did that only entice low-income web surfers to use IE, while leaving Netscape for those who could afford it — or did it kill the market for for-profit browsers?  Introduce a no-additional-cost alternative to any market of goods or services and consumers will flock to it, and in the process kill the market for anyone looking to maintain their own share of the market. That’s more basic than Econ 101.  It should embarrass Hawaiians that anyone would have to explain it to their elected officials.

For their relentless cluelessness about the free market and consumer behavior as well as the non-“free” nature of government programs, Fink, Lingle, and the Hawaiian Legislature win the prestigious Captain Louis Renault Award for their shock, shock! that people would take advantage of a no-fee program … that they themselves funded.

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How does my new padded Mao suit look?

*turns in a circle*

Well, off the rice paddies now.

Bishop on October 17, 2008 at 10:13 AM

My British dad, who has dual citizenship, decided to move back to England a few years ago because of his big health care bills. After less than two years he came back here, citing the lousy “free” care there.

jgapinoy on October 17, 2008 at 10:13 AM

And in a totally unrelated story, a majority of American families send their children to ‘free’ public schools.

Vashta.Nerada on October 17, 2008 at 10:14 AM

I am shocked, shocked to find moochers and looters taking free money!

BKennedy on October 17, 2008 at 10:17 AM

And in a totally unrelated story, a majority of American families send are forced to send their children to ‘free’ public schools.

Vashta.Nerada on October 17, 2008 at 10:14 AM

fixed it for you!

grapeknutz on October 17, 2008 at 10:18 AM

Who dares to threaten the profit margin on peoples misery and misfortune?

[email protected] on October 17, 2008 at 10:19 AM

This same thing happened in Tennessee when TennCare was implemented. That program ruined Tennessee’s finances.

flyfisher on October 17, 2008 at 10:19 AM

1984,

In the not to distant future,citizen needs medical
care!

They know all,see all,and he didn’t vote for Hope!

And now,he’s denied Health Care,he now lives in the
Change that he helped create!!!(Snark):)

canopfor on October 17, 2008 at 10:21 AM

Now Obama wants to implement this harbrained scheme in the whole country.

promachus on October 17, 2008 at 10:23 AM

And in a totally unrelated story, a majority of American families send their children to ‘free’ public schools.

Free education?

jgapinoy on October 17, 2008 at 10:24 AM

The unending stupidly of government officials never ceases to amaze me! How can they not learn about basic human behaviour?

OldEnglish on October 17, 2008 at 10:24 AM

I’m sure that with a little more brain? storming and meddling, these geniuses will come up with something new and better.

Jeff on October 17, 2008 at 10:24 AM

Netscape? Wow, I had already forgotten about that page of history. Thanks for the memories, Ed!

Grafted on October 17, 2008 at 10:24 AM

Son of a gun! I guess Obama is from Hawaii after all.

Kafir on October 17, 2008 at 10:25 AM

If you ever want to see the ugliness of identity politics and racist socialism played out on the microcosmic scale of a tropical paradise archipelago, spend some time in Hawaii.

Fletch54 on October 17, 2008 at 10:26 AM

Having worked in an emergency room business office while in graduate school, I can also attest to the fact that, when one child gets sick (or the parent needs a doctor’s excuse from work on a Monday morning) the entire extended family takes advantage of it, taking over the waiting room and staring at the TV until they get bored and leave.

And that’s just with a company insurance program. Imagine what it’d be like with nationalized healthcare.

AubieJon on October 17, 2008 at 10:26 AM

Australia has universal health care but the only catch is you would probably die waiting in line for the “free” health care provided.

Crux Australis on October 17, 2008 at 10:26 AM

I’m sure those who can afford healthcare didn’t like paying for homeless heroin users.

lodge on October 17, 2008 at 10:27 AM

The government doesn’t need to provide health care. That is not the problem with the health care system. The value of health care in this country is second to none.

The idea that people don’t have health care because they can’t afford it is also a red herring. The only problem with the system is that private companies underwrite individuals and determine some individuals uninsurable. . .

Imagine trying to get car insurance when you have had 10 accidents and a couple of DUI’s. auto insurance companies wouldn’t be able to insure you. . . the same thing happens with health insurance.

We don’t need to ‘give everyone health insurance’. . . we need to make sure that it is available to everyone at an affordable rate. NC has developed a ‘risk pool’ funded by all insurance companies that do business in this state (different from taxpayer funded risk pool). That pool will be used to provide insurance for uninsurables at a much more reasonable rate. THAT is the solution to the ‘problem’ of health care in this country.

Watch NC and how we do this thing. It is a model that should be used across the country. The new plan will roll out Jan 1. . . and I can not tell you how excited I am about it. Yes I know I am a geek, but I am uber stoked about this new health care plan for otherwise uninsurables.

ThackerAgency on October 17, 2008 at 10:29 AM

canopfor on October 17, 2008 at 10:21 AM

Have no fear comrade, in our new Obamanation, there will be a “Room 101” for every citizen.

Whether they like it or not.

“Just to be fair to everyone”.

Over.

1GooDDaDDy on October 17, 2008 at 10:30 AM

I am shocked, shocked to find moochers and looters taking free money!

BKennedy on October 17, 2008 at 10:17 AM

Not sure you can call them moochers and looters if they funded the program themselves with tax dollars. I believe that was one of Ed’s points. His IE example is a bit off the mark because those availing themselves of the freebie browser hadn’t already paid for it with confisticated taxes, although the end result is the same.

a capella on October 17, 2008 at 10:32 AM

And Lingle is a Republican!! Yet, she participates in the Democratic War on Economics.

thuja on October 17, 2008 at 10:33 AM

confisticated

=confiscated.

a capella on October 17, 2008 at 10:34 AM

The vast majority of our elected officials are absolutely useless people who were ran by their political parties not because of their competence, but due to their connections.

Witness Barack Obama. Perfectly unaccomplished, unqualified, generally useless individual with shady connections and this complete jackass could be our next President.

Until voters demand competent candidates, we’ll continue to get worthless clown acts like Barack Obama, who will have idea how to even perform the basic functions of government, but will shovel money at their donor groups. That’s the sum of what they can do.

And what do Hawaii Democrats need a giveaway program like this anyway? It’s already a one-party state.

NoDonkey on October 17, 2008 at 10:35 AM

South Africa tried to play the same game and got the same result. I notice other people commenting that other governments have also tried this and failed.

Perhaps when certain things regularly follow a certain economic policy, we could consider learning. We could even look to a discipline called Economics to see if it provides us any reasons why those results happen.

thuja on October 17, 2008 at 10:37 AM

Oh, that’s rich! Didn’t Hawaii try to freeze gas prices a year or two ago?

budorob on October 17, 2008 at 10:40 AM

Have no fear comrade, in our new Obamanation, there will be a “Room 101″ for every citizen.

1GooDDaDDy on October 17, 2008 at 10:30 AM

Yeah. The Oval Office.

RushBaby on October 17, 2008 at 10:45 AM

What a surprise.

WisCon on October 17, 2008 at 10:46 AM

I am voting for Thackeragency for President! I have an adult child that would be uninsureable if we ever dropped him from our coverage. We buy health insurance through a group of small business with about 600 others and still pay $1400 per month. I hate it! My son gets Medicaid because he his disabilites prevent him from any kind of work activity. I have considered dropping him from our insurance to save money, but adults on Medicaid can’t find doctors. “Free healthcare” is lousy and expensive.

bopbottle on October 17, 2008 at 10:47 AM

Great clip.

drjohn on October 17, 2008 at 10:49 AM

Here in Louisiana, we have the Lachip program for low-income people. Once a child is on it they can stay inrolled till 18yrs.old. Regardless, if parents income increases within that time. The program also advertises alot, and set up display booths at festivals and community events. Our government wants more people on this program.

la.rt.wngr on October 17, 2008 at 10:51 AM

Off topic here – I posted an uplifting video clip of Sarah Palin from the Dover, NH rally 10-15-2008.

Sarah Palin – “…don’t have to apologize for being Americans!

MrC_5150 on October 17, 2008 at 10:52 AM

Fletch54 on October 17, 2008 at 10:26 AM

Hey Fletch, a long lost love of mine was in Hawaii for a few years and she was a hot shot nursing supervisor at a big hospital. She said you’d be surprised at how you’re discriminated against if you’re white and not some Pacific Islander or whatever. And this was back around ’75.

Jeff on October 17, 2008 at 10:52 AM

i like this, the reality of government run health care.
http://www.freemarketcure.com./

palefaced on October 17, 2008 at 10:52 AM

Socialized medicine is pursued by the LEFT because it is fulfillment of Communist Goal Number 32. The Democrats don’t care if you are poor, in fact they want everyone to be poor, the masses are much more easily controlled that way. The Democrats don’t care if you have health care or not, but they do care about being able to exercise absolute control over everyone’s personal life and socialized medicine goes a very long way toward that end.

America once had the finest schools in the world, then we decided to let the government run them. Look at them today. While American’s spend more per student than almost any other country in the world, the quality of our education system nevertheless lags far behind nearly all third world countries. Just think what the government could do for our health care system !!

Maxx on October 17, 2008 at 10:53 AM

Oh, wonderful . . . let’s hope our government health care handout is as good as Canada, or even, perhaps Zimbabwi . Hang it up folks we’re about to descend down a communist sewer. Say goodbye to your once great capitalistic, free market society and say hello to your new third world country.

rplat on October 17, 2008 at 10:54 AM

It sounds like legislative malpractice. They didn’t know how to accurately estimate the cost of their legislation. When they were really surprised by the cost and unwilling to accept responsibility, they blamed the parents. But most of them probably sound as articulate as Barack.

snaggletoothie on October 17, 2008 at 10:58 AM

Yeah.The Oval Office.

RushBaby on Oct 17,2008 at 10:45AM.

RushBaby: In case Hopey get in,they have installed a self
cleaning system,just in case,there’s an accidental
debauchery of the Oval Office’s rug,a hem!haha:)

canopfor on October 17, 2008 at 10:59 AM

This sort of nonsense is why Obama needs to commit to fully funding his play-or-pay “public option” with the payroll surcharge rather than subsidizing it in order to artifically set premiums low.

Once play-or-pay is in place, the government can run private insurance out of business by pricing the government product at an actuarially unfair (low) rate.

Fabian socialism.

DrSteve on October 17, 2008 at 11:02 AM

bopbottle

Your uninsureable adult child is a threat to the profits of Insurers. Any threat to the bottom line that can be eliminated in private industry is acceptable. Unless you want to be a commie.

[email protected] on October 17, 2008 at 11:05 AM

Ahem…Ed, you forgot to put a big red (R) beside Lingle’s name.

Brat on October 17, 2008 at 11:05 AM

Thanks for the endorsement bop! But for your son, you said he is disabled and on Medicaid. . .

My son gets Medicaid because he his disabilites prevent him from any kind of work activity.

If he is on disability, he should be able to get Medicare. As long has he has been on disability for two years, he will be eligible for Medicare. Medicare is MUCH MUCH better than Medicaid. I would recommend that you look into seeing if he qualifies for Medicare due to disability. I think that could be a pretty good solution for a disabled individual. . . but he has to qualify (which can take some time but is worth it).

ThackerAgency on October 17, 2008 at 11:07 AM

MrC_5150 on October 17, 2008 at 10:52 AM
THANKS ! nice

pambi on October 17, 2008 at 11:08 AM

For at least the past 40 years, Arizona has offered child immunization clinics and county hospitals for the indigent, including emergency care as well as surgeries for anyone willing to wait their turn in line. It began prior to the flood of illegal aliens into the state and our nation, and prior to the aids epidemic as well.

So I wonder how Arizona’s budget covers the burdens now.

Even on financing the state’s healthcare budget alone, that would certainly explain why tent city for convicts exists.

maverick muse on October 17, 2008 at 11:11 AM

Your uninsureable adult child is a threat to the profits of Insurers. Any threat to the bottom line that can be eliminated in private industry is acceptable. Unless you want to be a commie.

[email protected] on October 17, 2008 at 11:05 AM

You are obviously being sarcastic here, but it is much more complicated than that. If these insurance companies insured people that cost them 2000/month in claims but they only brought in 500/month in premium. . . guess how long that company stays in business.

Do this little excersize. . . open a business and tell everyone you will give them 2000 if they give you 500 and see how long your business stays open.

Then another issue that complicates it is that new procedures and drugs are developed daily. How much are they worth? Does it cure the disease? Does it alleviate symptoms? How much would an insurance company be forced to pay for a new and unproven treatment?

These are questions that insurance companies have to deal with. They negotiate lower rates for heart surgery because when you need heart surgery is not the best time to negotiate with the surgeon about price. If you need it to live, you will pay anything for it. . . fortunately, you don’t have to haggle if you have insurance because the insurance company has already done that TO KEEP YOUR HEALTH COSTS DOWN!

But if you reduce it down to profits and commies, you miss the entire debate.

ThackerAgency on October 17, 2008 at 11:12 AM

Imagine trying to get car insurance when you have had 10 accidents and a couple of DUI’s. auto insurance companies wouldn’t be able to insure you. . . the same thing happens with health insurance.

ThackerAgency on October 17, 2008 at 10:29 AM

Imagine forcing banks to make loans to people that can’t afford to pay them back. Sound familiar? Something else the Democrats forced on all of us. Destroy the American economy, bring America to its knees, then Communism can bloom, that’s the Democratic goal.

Maxx on October 17, 2008 at 11:13 AM

Here’s the problem. The people getting the “free” care are being completely rational.

I don’t know how Hawaii regulates health insurance companies but I would imagine that employer health care plans have either single or family coverage. If you want to cover a spouse you’d need to cover your entire family and knocking the kids off the plan isn’t an option. This “free” or cheap government subsidized plan must have affected people who were buying individual plans (often single proprietors or small business people) that they could tailor. This group pays a much higher price since (1) they are paying for whatever risks and pre-existing conditions they have, not having them averaged out in some larger pool. (2) They are paying the full cost of premiums (no employer subsidy) and depending on how their business is structured, (3) may be paying the premiums with after tax dollars. When given a chance to put the kids on a government subsidized plan and save $$$ I am sure it was a no brainer for them.

Insurance companies are rational too. When this plan came online, if they could get away with it they’d probably have been encouraging families with sick kids that maybe they should think about putting them on the government plan. I am sure it would have saved them a bundle too. They already do it with adults who apply for individual insurance who have expensive conditions that they don’t want to insure.

As long as health insurance is based on what your employer wants to give you, and its tied to your continued employment at that employer, more people will continue to fall through the cracks and demand some kind of universal healthcare or univeral insurance system. Fewer people are working at really large corporations anymore and with the recession, even fewer nowadays.

MargaretMN on October 17, 2008 at 11:13 AM

The unending stupidly of government officials never ceases to amaze me! How can they not learn about basic human behaviour?

OldEnglish on October 17, 2008 at 10:24 AM

The same government officials who think we’ll stop illegal immigration by giving amnesty to the illegals?

It’s always been a fundamental fact of human behavior that if you reward a behavior, you will get more of that behavior, not less. Yet somehow, our government types can’t seem to wrap their tiny minds around that principle.

AZCoyote on October 17, 2008 at 11:13 AM

Whoda thunk it? Huh.

Akzed on October 17, 2008 at 11:15 AM

When does Joe get HIS bailout and free healthcare?

Fletch54 on October 17, 2008 at 11:19 AM

It should embarrass Hawaiians that anyone would have to explain it to their elected officials.

And what do you think President Obama’s health care plan is going to do? Precisely that. Only, it’s so comprehensive and it’s mixed with so many “fines” and other crazy burdens on employers, that it’ll result in government health care crowding out private insurance. Then we’ll be just like Canadia, with a single payor system! Then, Obama and the socialists will be able to nationalize the health care busienss (just like they want to nationalize our banks) and, voila, we’ll be like England!

Outlander on October 17, 2008 at 11:19 AM

It will work better on a federal level though, because the federal system is bigger. You people just don’t understand how to apply the economies of scale to liberal economics.

(end sarc)

angelat0763 on October 17, 2008 at 11:19 AM

Here is the Obama plan coming soon.

Republicans are charged a “Racism Mitigation Surcharge” and the funds go directly to the “Democrat Party Member Health Cooperative” where in one must be a registered member of the party to receive services. Brilliant!

ronsfi on October 17, 2008 at 11:30 AM

bopbottle

Your uninsureable expensive-care-requiring adult child is a threat to the profits of Insurers solvency of any nationalized health care system. Any threat to the bottom line that can be eliminated in private industry the national health care plan is acceptable. Unless you want to be a commie.

[email protected] on October 17, 2008 at 11:05 AM

FIFY

Sekhmet on October 17, 2008 at 11:40 AM

TA

Yes I’m being sarcastic but only because there is so much fertile ground in the Health business to be sarcastic about. I live under the threat of Canadian health care every day. I don’t pay $1400.00 dollars a month and the terms “pre-existing condition and uninsurable” do not exist in the vocabulary of the Canadian health system. I like our system and will defend it against ignorance.

[email protected] on October 17, 2008 at 11:41 AM

And Lingle is a Republican!! Yet, she participates in the Democratic War on Economics.

thuja on October 17, 2008 at 10:33 AM

Where’s my magic bus? So many elitist Repubs., not enough buses.

Sapwolf on October 17, 2008 at 11:42 AM

FAIL

CP on October 17, 2008 at 11:46 AM

So, have Democrats learned anything based on the information provided? No. >:(

mindhacker on October 17, 2008 at 11:52 AM

Sekhmet 11:40

Not sure that scans coherently. Besides the concept of cutting health corners to please investors isn’t a consideration in Canada.

[email protected] on October 17, 2008 at 11:53 AM

Not sure that scans coherently. Besides the concept of cutting health corners to please investors isn’t a consideration in Canada.

Instead, corners are cut in Canadian healthcare to please government bureaucrats and attempt to control costs to the taxpayer….Umm, that’s not an improvement.

Sekhmet on October 17, 2008 at 11:57 AM

“TANSTAAFL”
Look it up if you need to.

Doug on October 17, 2008 at 12:02 PM

If he is on disability, he should be able to get Medicare

No, he would only get Medicare, as a dependent, if my husband or I died and he were still living in our home. He has never paid social security or medicare taxes, so he does not qualify for Medicare.

I am not a commie! Just glad to live in a society that doesn’t exterminate the disabled or elderly. Remember, anyone could become disabled at any time.

bopbottle on October 17, 2008 at 12:33 PM

And in a totally unrelated story, a majority of American families send their children to ‘free’ public schools.

Free education?

jgapinoy on October 17, 2008 at 10:24 AM

So right. Public Education is a perfect example of how govt can screw something up royally.
As a public screwl teacher, I see waste waste waste. Paying people to push paper & do NOTHING. No accountability on the part of administration. UGH! But if the kid doesn’t ace the standardized test, oh let’s blame the teacher! But only the teacher in the core subject areas. So the PE & history teachers don’t need to be accountable. Just us math,English & science folks.
And then, oh, let’s pay everyone with a different degree the SAME. That’s the way to ensure a quality education!
I only teach for the convenience (got a ranch to tend to). I fight the bias every day in class.
People, you are better off home schooling. Even if you think you’re too dumb, form a network with other parents. It’s worth it.You can do much better.

Badger40 on October 17, 2008 at 12:55 PM

If you’ve ever worked for a social agency, you’d know first hand how unsurprising this is.

You wanna see unbridled greed? Go to your local Food Bank. Not the truly needy ones needing food. The workers.

School Lunch Program? All the best food is going home with the workers, not in the stomachs of the kids.

Free Health Care? All the meds will walk out the back door.

It’s all about creating clients, too. You’ll qualify for everything they’re offering, if you just apply. Like ACORN, the more clients, the more federal money that will be poured into your local office.

Joan of Argghh on October 17, 2008 at 1:21 PM

Joe the plumber needs to make a statement about this.

csdeven on October 17, 2008 at 1:39 PM

Just waking up to read this….

Yup, plus we don’t have any doctors here. Well, not enough….

I’m not kidding either. Low reimbursement rates and tort reform is needed to attract doctors to the state. But the liberal democrats don’t want to give up their share of the insurance pie.

Kini on October 17, 2008 at 2:11 PM

2nd lawsuit challenges Obama’s citizenship
Man demands state verify birth records or remove senator from ballots

Note: It is incumbent on ALL Secretaries of State in all of the United States to BOTH accurately verify Voters AND candidates. Barack Hussein Obama has sealed his “Hawaiian” birth records and also records in Kenya.

Failure to verify and certify qualification for ALL candidates in a general election by any Secretary of State may be a cause of action (dereliction of duty) and criminal charges may be filed.

http://www.wnd.com/index.php?fa=PAGE.view&pageId=78111

Also:

The Video that could cost Obama the election

http://www.nextgenerationcorp.com/NextGenBlog/?p=68

First Lawsuit against Obama and the DNC:
http://www.obamacrimes.com

AdrianS on October 17, 2008 at 2:47 PM

The supply demand curve is the immutable LAW of economics. When something is perceived as “free”, then demand is on a sure beeline to infinite. Why wouldn’t it be? The only limit, would be that people do need to work and other things, so they can’t spend 100% of their time waiting in long lines for that “free” service. Politicians shouldn’t be allowed to run for office until after they have taken both basic micro and macro economics courses, and then PASS A TEST WITH A REQUIREMENT OF 90% CORRECT ANSWERS.

Webrider on October 17, 2008 at 2:55 PM

The sad part is it was a Republican governor who signed the bill making this possible.

xblade on October 18, 2008 at 12:36 AM

Um, waitaminit, Ed. I thought you had some history behind you and were web savvy. I’ve never yet bought a browser. I used free Mozilla. I used free Netscape. I’ve used free Internet Exploder. I’m using free Mozilla/FireFox now.

Please get your basic facts straight when you lay down examples. They work better.

{^_-}

herself on October 18, 2008 at 5:01 AM