W hen it comes to health care reform, the Obama Administration is insisting that our health care system is fundamentally broken and needs drastic change. They cite the facts that nearly 50 million people are reportedly uninsured and that health care costs are soaring ever higher. They make much of the policies of insurance companies, which often deny coverage or treatment in their efforts to improve their own bottom lines.

But Dick Morris, past adviser to former President Bill Clinton, current political analyst to FOX News Channel and coauthor of the best-selling book Catastrophe, which details many of the issues surrounding health care, has a different take. He says that the American health care system is the best in the world. "What other country has long lines of people waiting to get in for medical treatment?" he asks. He warns that the 1,000-plus-page health care reform bill from the House of Representatives and the Senate version introduced by Senator Max Baucus will severely hurt our health care system and will not end up providing coverage to those who need it. He says that we don’t have medical resources to provide care for the 30 million new patients projected to be covered by the House and Senate bills. He says that we need to expand the number of health care providers as we are expanding the number of patients. But, he warns, the cuts to Medicare reimbursement rates contemplated by Obama are likely to force more retirements among medical professionals and result in fewer doctors, constraining our resources still further. The political wrangling involved with the various proposals has led to fear, misinformation and a rising tide of skepticism that has exploded in town hall meetings across the country and even a march on Washington, DC.

I asked Morris to explain the truth behind some of the hot-button issues in order to separate myth from reality...

Issue: Health care coverage for all.
Fear: We’ll end up with socialized medicine -- and how will we pay for that?
Reality: Though many are against the "public option" proposed in the House bill, the administration appears to be backing down on that and exploring other alternatives -- and anyway, Morris told me, insurers have already agreed to halt the practice of denying coverage to those who are sick, have preexisting conditions or are at risk for illness. Under the new plan, everyone -- including all the American citizens who are now uninsured -- will be able to get insurance, through either a private or public option or, in the latest iteration, health care cooperatives that function like credit unions, owned and operated by their members. (However, notes Morris, since these would have to be set up by the government, they would end up serving as just another government agency in the interim until they could be organized and elections held.) "It’s not necessary to redo the entire medical-care system to accomplish the goal of insuring everyone," Morris says. "A simple expansion of the Kassebaum-Kennedy Act passed in 1996, which bans discrimination against those with preexisting conditions when changing jobs, would suffice."

One frequently contested issue concerns just who gets counted in the "50 million" people who are supposedly uninsured. Though this is the figure that the administration uses to describe how many "Americans" lack health insurance, Morris said, the truth is this estimate includes an estimated 10 million illegal immigrants, plus approximately nine million people with household incomes of more than $75,000/year but who choose not to buy health insurance -- so in reality, the number of Americans who actually are in need of coverage is more like 31 million. "President Obama claims his bill would not cover illegal immigrants, and both the House bill and the Baucus proposal clearly exclude them," Morris notes. "But that’s not the end of the story. Neither bill provides for citizenship or legal status verification before a person is given a subsidy. Indeed, the Democrats have explicitly rejected the idea of including provisions for verification. This opens the door to massive fraud."

Issue: The vast majority of people are happy with their coverage.
Fear: Health care reform will make things worse for the many who don’t actually "need" reform.
Reality: Several polls, including those done by the Kaiser Family Foundation and FOX News, report that approximately 80% of Americans are happy with their current plan and the health care they receive. Morris adds that other polls, including one done by Rasmussen, suggest that nearly half of Americans believe the quality of their personal care under proposed changes will get worse... so, he asks, why do we need broad "reform"? Doesn’t it make more sense to just figure out a way to cover the 31 million Americans who need health care coverage?

Also, the President has said repeatedly that Americans who like their private health insurance coverage would be able to keep it. However, that’s only if they stay at their current jobs and their employer continues to offer the same private insurance coverage. The House bill sets standards for acceptable health care coverage, specifically delineating essential benefits and permissible co-payments, and allows small businesses the option of deciding which insurer their employees should use. This means that employers will shop for the cheapest coverage and may force their employees to change plans. Of course, Morris notes, they do this now, so we have limited control over our own insurance anyway.

Issue: Increased demand will lead to doctor shortages.
Fear: Covering these many millions of currently uninsured people (including illegal immigrants) places excessive demands on the health care system.
Reality: This is the biggest issue of the proposal, says Mr. Morris, because insuring more people will inevitably lead to greater need for services. Cost-effective solutions to this problem must be a part of the plan. "With no expansion in the number of doctors or nurses or even licensed alternative practitioners, there will be a shortage of doctors’ time and medical equipment," says Morris. "Large numbers of patients will get treatment, but at the cost of quality and availability of care to each one."

Issue: Health care reform will cost more than $1 trillion over a decade -- where will the money come from?
Fear: Drastic cuts to Medicare will affect care available to the elderly.
Reality: The Senate bill provides that $500 billion of the approximately $900 billion price tag will come from cuts to Medicare and Medicaid. The administration says they really aren’t cuts but rather reductions in the program’s growth. Morris disagrees, "A cut in the projected growth of a plan is a cut in the program." Obama also says that the cuts will not reduce patient benefits but will only eliminate "fraud and abuse." Morris points out that administration officials have indicated that cuts in reimbursements to doctors and hospitals are likely -- and that this will lead to shorter doctor visits and a reduction in the quality of care. He also notes that the bills vest the power to cut Medicare and Medicaid in a board within the executive branch, so these cuts would not be subject to legislative amendment, only to an up or down vote in their entirety which must be cast within 60 days, as was the case in the closing of military bases. It is designed, he says, "to ram through cuts without letting the elderly protest them."

The rest of the money to pay for health care reform comes from a tax on health insurance premiums. Currently, the Baucus Bill provides that the tax will be triggered by policies with premiums above $8,000 per person -- and the Congressional Budget Office estimates that 10% of all plans now fall into this category. But, Morris notes, "The $8,000 figure is not indexed for inflation, let alone for medical inflation, which usually is twice as rapid." Therefore, says Morris, it will increasingly cover more and more families "just like the Alternative Minimum Tax, which started as a levy only on the rich." Indeed, by the time the bill takes effect in 2013, the number of people subject to the tax would likely be far greater than the current 10% estimate. The tax in the Baucus Bill would be 35%. So a policy that now calls for $8,000 premiums would rise to $10,800. Morris calls this "a tax on the middle class."

Issue: Helping the uninsured.
Fear: The legislation requires tens of millions of people to buy insurance even though they don’t have the money to pay for it -- because it does not provide adequate subsidies to make it affordable.
Reality: The Congressional Budget Office estimates that the average person who is currently uninsured and not eligible for Medicaid will have to pay between 15% and 20% of income in premiums, deductibles and copayments under the Baucus Bill before subsidies kick in, or face very heavy punitive fines. But what about the many who now lack insurance but really only want catastrophic coverage, which is not an acceptable alternative under either bill? Only full coverage will satisfy the requirement. "This bill is funded by taxing middle-class health insurance, cutting Medicare and penalizing the uninsured and forcing them to buy policies that they may not want or need -- all to get revenue to pay for the plan," Morris points out.

Issue: Health care costs are exorbitant and must be controlled.
Fear: Cost-cutting measures will lead to lower quality of care and will eliminate choices for patients and doctors.
Reality: A key factor in the escalating costs of health care is that doctors are forced to practice "defensive medicine," ordering every possible test to rule out every possible diagnosis in the event that the outcome is poor and the patient or family decides to file a suit. This is an issue that needs to be addressed with tort reform, says Morris. For example, he cites the recent request by the administration of the insurance industry to stop paying for C sections when they are not necessary, without providing a clear definition of what "necessary" means. As Morris points out, "OB-GYN doctors often have to perform C sections to avoid being liable for bad outcomes in natural childbirth." Until this concern is alleviated, he says, cuts in the cost of care are just not possible.

Read on for more from Dick Morris...