Saturday, December 28, 2013

No Free Market Health Reform Will "Work"—by Socialist Standards

Last Fall's attempt by the Republicans to force a defunding of ObamaCare through the budget process, thus precipitating the confrontation with Democrats that in turn precipitated the government shutdown, was, I believe, a poorly conceived political strategy. My reasons are two-fold. First, I believe that ObamaCare must be confronted openly and on principle, rather than smuggled in through the budget process. 

By principle, I mean fundamentally opposite of the statist ObamaCare. To do that, the GOP must offer a fundamentally opposite healthcare reform to anchor their opposition. Being against without being for something is not a viable strategy. The Republicans have failed to come close to offering a viable principled alternative.

Worse, they've gone the opposite way, basing their opposition to ObamaCare on the Democrats' basic premises. House Republicans introduced a health care reform plan in September that would replace ObamaCare if Republicans are successful at repealing ObamaCare. According to TPM's Dylan Scott:

The plan, drawn up by the House Republican Study Committee, starts with repealing the 2010 health care reform law. It then aims to lower health care costs through a few mechanisms. Income and payroll tax deductions would be available to individuals ($7,500) and families ($20,000) for health coverage. Insurance plans could be sold across state lines. The federal government would pump $25 billion into state high-risk pools for people with preexisting conditions. Medical malpractice laws would be reformed to reduce doctors' risk of litigation.

Although the GOP plan does have a few good free market reforms, it is vague and underwhelming. Worse, the preamble's muddled message reads like a weak-kneed attempt to achieve the Democrats' goal of universal coverage, only more slowly:

Americans want a step-by-step, common-sense approach to health care reform, not Speaker Nancy Pelosi’s costly, 1,990-page government takeover of our nation’s health care system. Republicans’ alternative solution focuses on lowering health care premiums for families and small businesses, increasing access to affordable, high-quality care, and promoting healthier lifestyles – without adding to the crushing debt Washington has placed on our children and grandchildren.

The GOP plan won't "work,"  argues Scott, because it doesn't help poor people get insurance in the way ObamaCare does.

But ObamaCare "helps" poor people get health insurance by subsidizing their premiums with money seized from taxpayers against their will. ObamaCare further subsidizes some peoples' healthcare at the expense of others through insurance mandates that force everyone to buy only government-approved coverage whether they need, want, or can afford such coverage. The contraceptive mandate is a prime example of this. And, of course, there is the individual mandate, which requires everyone to purchase a government-approved policy under threat of fines. The effect of these mandates is to raise premiums on people who would otherwise be able to get much cheaper coverage, in order to subsidize—lower the premiums of—others. As a corollary, ObamaCare accords federal regulators unrestrained power to write regulations; i.e., to make law.

All of this amounts to a monumental regulatory/redistributionist scheme that massively violates the rights of individuals to control their own wealth and healthcare. The only fundamental alternative to ObamaCare and like schemes is a free market. But no free market plan can comply with the standard of government help for the poor or the uninsured. No free market plan can "work" by socialist standards on socialist premises. A free market protects individual rights. A plan that guarantees coverage for everyone must necessarily violate rights on a massive scale. If the Republicans are to credibly counter the Dems' universal coverage schemes, they must reject the Dems' premises and boldly hold individual rights as the standard for healthcare reform.

Some of their proposals do advance toward more freedom; e.g., "Allowing Americans to buy insurance across state lines" and "Enhancing Health Savings Accounts (HSAs)." But it also contains provisions for "Universal Access Programs to guarantee access to affordable care for those with pre-existing conditions." Nowhere do the Republicans uphold individual rights and free markets as their standard. They simply accept the Democrats' standard and, of course, by that standard the GOP plan won't "work."

Of course, the natural incentives inherent in a fully free market—consumers shopping for the best healthcare and health insurance at the best price, coupled with providers competing to attract customers and expand sales and profits—inexorably leads to lower costs and higher quality. Problems like pre-existing conditions are largely a consequence of the government-instigated third-party-payer system that ties health insurance to employment, which wouldn't exist in a free market. (The GOP plan seeks to partially rectify that by allowing tax deductions for individuals and families to equalize tax treatments between individuals and businesses.) The lower costs and higher quality that results from competition in a free market does help everyone, including the poor, to pursue healthcare. But that must be recognized as a consequence, and individual rights as the standard, if the GOP is to avoid the trap set by Scott and other Leftists.

And that's what a free market does; protects everyone's right to pursue healthcare and health insurance that fits their values, needs, wallets, and overall personal circumstances. A free market does not give anyone an automatic claim on other people to provide for needs they can not provide for themselves, with the government acting as his agent to carry out those claims. A free market does not guarantee that everyone's needs will be satisfied. A free market only protects the rights of the needy to seek charitable help, and everyone to offer such help as and when they choose. The government's only role is a neutral one; to protect everyone's individual rights to life, liberty, property, and pursuit of healthcare equally and at all times. This government protection is what makes free market capitalism the only moral social system. 

As long as the GOP frames their ideas as a way to achieve socialist goals, as their recently submitted plan is implicitly designed to do, they will fail to stem the tide toward full, single-payer socialized medicine. In fact, they will enhance the trend. Why go for a slow-motion, halfway Republican plan of universal coverage when the Democrats are offering to take you there much quicker and explicitly. 

Consistency will always win over half measures, and the Dems have been fully consistent in pursuing universal healthcare. As Ayn Rand observed about "The Anatomy of Compromise" in Capitalism: The unknown Ideal: "In any conflict between two men (or two groups) who hold the same basic principles, it is the more consistent one who wins." The GOP, if it is to be the political voice of free markets, must heed her advice.

Related reading:

As ObamaCare Failures Pile Up, Get Ready for the Mother-of-All Healthcare Battles


Mike Kevitt said...

The only fundamental alternative to ObamaCare is individual rights enforced by government under law. That's the only fundamental alternative plan. From that comes economic activity as per mutually freely chosen relations by all parties. Those relations are markets, 'the' markets, the only markets there can be. There is no free market plan. There is only markets in relations planned by the parties to them. The only overall plan is government by law as per individual rights. That's the fundamental alternative to ObamaCare and to the statism behind ObamaCare.

Lots (I believe most) people don't want to exercise their right to control their own health care. They want 'government' to do it for them. They want 'government' to plan and execute the production and distribution of wealth, but then they want to control, themselves, their individual portions of the wealth.

Today, statism must be disestablished, and individual rights established, instead, whether they like it or not, and without their vote (without anybody's vote) on the matter. At NO time is it a matter of anybody's vote. It's a matter of DOING it, as per our knowledge.

On this fundamental matter, voting is not a formality. It's a popularity contest to check up on prevailing attitudes, taken with a grain of salt. The formality is the signed, sealed, delivered and enforced documents.

Michael A. LaFerrara said...

"There is no free market plan. There is only markets in relations planned by the parties to them."

Good point, Mike. A little collectivistic poison leaked into my terminology.

Mike Kevitt said...

Great! Among the rest of what I said (which I stand on), I carefully, deliberately chose those words. Glad ya caught 'em and latched on!

I got a bang outa your likening of your terminology to leaking collectivistic poison(!).

In today's culture, there's plenty of that poison commin' outa ever' where, not just outa the woodwork. We're bound to get a little unintended and unwanted osmosis into us. Happens to me a lot.