Thursday, November 21, 2013

Before ObamaCare Fiasco: Problems Caused by Government

A letter writer (Eyes on the prize) named JoAnn responded to the ObamaCare rollout fiasco by claiming that the problems should be fixed because ObamaCare (the Affordable Care Act) is needed. She writes that "The old health care system was a disgrace to a country that calls itself exceptional." After noting that the Medicare Part D prescription drug benefit rollout also faced problems, she said, "It is crucial that we get [coverage for] the 30 million people who suffered physically and financially from lack of health care coverage."

I left these comments:

"It is crucial that we get [coverage for] the 30 million people who suffered physically and financially from lack of health care coverage."
At whose expense? Yours, JoAnn? I didn't think so. On what moral basis do you have a right to demand that government seize other people's wealth and redistribute it to the 30 million people you claim to care so much about? 

What we had before ObamaCare had many problems, all of them caused by government; such as high healthcare and health insurance costs and pre-existing conditions problems caused by insurance mandates, legal barriers to competition, the 3rd-party-payer system, and the tort crisis. But it was better than ObamaCare, because at least we were freer to make our own healthcare and financial decisions.

ObamaCare not only criminally redistributes massive amounts of wealth through taxes and higher insurance premiums, it also creates a labyrinth of government boards and committees to dictate who gets what healthcare and when.

Rather than give the government vastly more power to "fix" the problems it caused in the first place, we should repeal ObamaCare and then repeal the government policies that afflicted the pre-ObamaCare system, and establish a free market. Then, consumers, health insurers, and medical providers would be free to contract voluntarily to mutual advantage, and consumers would be able to buy policies that best fit their needs, budgets, and other personal circumstances. With consumers in charge and the government no longer coercively breathing down insurers' and doctors' necks—but rather protecting everyone's rights to freedom of contract—costs would drop dramatically and consumers would gain control over their insurance.

The government's job is to protect the rights of people to pursue their own values, including healthcare. It has no business guaranteeing "universal coverage." It is each adult's responsibility to provide for his and his own family's healthcare, and to decide how, when, and in what capacity to aid others who he deems worthy of his help.

In a recent Forbes piece, Paul Hsieh cited several policy reforms that could alleviate the cost and pre-existing conditions problems:



1. Eliminate the tax disparity between employer-provided health insurance and individually-purchased health insurance. This would uncouple health insurance from employment and restore a level playing field to the individual insurance market. Individuals could then purchase policies that they kept even when they changed jobs (just as they already do with their car and homeowners insurance).
2. Eliminate all mandated benefits. Insurers should be free to offer to willing consumers inexpensive policies covering only catastrophic accidents and illnesses. Insurers would remain free to offer richer policies that covered varying levels of elective procedures (but cost correspondingly more). Customers could purchase whatever levels of coverage they wished from willing insurers based on their own individual needs and circumstances.
3. Allow insurers to sell policies across state lines. State mandates create 50 separate state markets rather than a single national market. A family insurance plan costing $3,000 in Wisconsin might cost $10,000 in New Jersey because of state regulatory barriers. Allowing interstate competition would quickly drive down prices and help many working families on a tight budget.
Reforms 1 and 3 are probably familiar to most people. Reform 2 is a more radical approach that one rarely hears advocated by Republicans or conservatives. Hsieh continues:
    Free-market reforms would also help handle the currently-thorny problems of pre-existing conditions. For example, University of Chicago professor John Cochrane has proposed the innovative concept of “health status insurance.” This is basically meta-insurance, where customers pay an additional small premium to protect against major changes in their health. If their health status changes significantly for the worse, this additional policy allows them to either keep the current health plan without additional penalty or gives them sufficient money to cover the increased lifetime costs of a more expensive new policy.
    In 2008, United Health began offering (where permitted by law) a “future insurability” option to customers purchasing individual insurance plans. This would allow them to retain their United plan regardless of subsequent medical problems. A free market would make such innovative options more widely available as other insurers competed to provide willing customers with comparable alternatives.

JoAnn is correct that the technical problems regarding ObamaCare are secondary to the primary issue, which in fact and as she implies are political/philosophical. Committed socialized medicine ideologues will never go for reforms that liberate the insurance market and empower consumers. But those who want real, moral, rights-respecting reforms that give individuals the tools to deal with their own healthcare and solve their own problems without burdening their fellow Americans should welcome alternatives to ObamaCare and the even more authoritarian medicine that lies beyond it.

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