Adam Smith once wisely said “Great ambition, the desire of real superiority, of leading and directing, seems to be altogether peculiar to man, and speech is the great instrument of ambition.” If only President Obama would embrace more of Smith’s beliefs…
The first two pieces (Part I, Part II) of this series exposed some major caveats in the healthcare bill that Obama is urging Congress to pass and addressed some of the common myths of a free market enterprise system. Now that the criticisms have been established, it is time to focus on the solution.
The Invisible Hand vs. The “Visible” Hand
As President Obama continues to campaign around the nation in an effort to win support for the current healthcare proposal, he is selling the “visible” hand approach. The visible hand has been present in the healthcare sector for decades. The result has been out-of-control costs and a monopoly by the insurance companies.
In 1964, President Lyndon Johnson promised the American people that Medicare would not cost more than $1 per month. For $1 per month, Americans would have a secure financial future knowing that all of their medical costs would be paid when they reach an age when they will require more medical care. It is safe to say that Medicare costs today are far off the inflationary curve, and Medicare no longer covers all costs.
Proponents of government healthcare say that rationing is a scare tactic used by the opposition. The truth is rationing is not a scare tactic, as it has taken place with Medicare. In an effort to control costs, Medicare no longer covers medical care in full. Senior citizens must purchase supplemental insurance in order to have little or no out-of-pocket costs.
Part II of this series touched on government regulation of the insurance companies and the community rating system. Obama’s plan is more of the same. People will not have the freedom to choose what is in their plan. Government regulations require anything from in-vitro fertilization to hair transplants to be covered. Those who may never require those services are forced to pay for those that do, which is why insurance premiums are so expensive. If people have the freedom to pick and choose what they wish to have insurance cover, the premiums will be more affordable.
The community rating system states that people must pay the same rates for their level of coverage regardless of their age or medical condition. It’s a wonder why so many young people opt out of purchasing health insurance when they have to pay the same rates as those who require more medical services. Under the current proposed plan, insurers would not be allowed to charge more than twice as much for one patient than any other patient with the same coverage.
Perhaps it is time for the invisible hand. Real healthcare reform should allow the consumer to freely choose what to buy, how much to buy and allow the producer to freely sell it. This means allowing people to purchase insurance policies across state lines, and removing all government mandates that dictate what should be covered.
Cost Control vs. Number Insured
Which is more important? The magic number is 47 million. Try and type the number “47 million” in a general internet search and leads for “47 million uninsured Americans” will appear. The focus in the current proposal is on the latter when it should be on the former. What good does insuring everyone do if the costs are not addressed? Furthermore, if the costs are not addressed, everyone’s quality of care will be severely diminished.
Countries that have universal care face rationing of care and lack of access to modern medical technology because rising costs do not allow for such investment. Healthcare reform should not be about getting people insured, but rather bringing down the costs in order to allow more people to have access to QUALITY care at an affordable price. Nations that reject centralized government control and incorporate market mechanisms have the best chance of accomplishing this feat. Nowhere in the world has any nation’s government been able to successfully control costs without it coming at the expense of quality care. France’s healthcare system, a country that Michael Moore suggests the United States follow, is the single largest factor driving their overall budget deficit.
Empowering the Government vs. Empowering the People
Which has the power to do more harm? The United States is a country that embraces freedom, so why does the Obama Administration want to empower the government to make the American people’s most PERSONAL decisions? Benjamin Franklin once said: “They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.” If the government bureaucrats are empowered to make people’s health decisions, the United States will suffer one of the greatest losses of liberty.
The Bush Administration didn’t get much right when it came to fiscal and economic policy, but one bright spot was the creation of the Health Savings Account (HSA). HSA accounts create a market that is strictly CONSUMER driven. People are empowered to make their own decisions and use tax-free dollars to pay for medical care. HSAs are not about insurance. They are about people spending their OWN dollars which induces far more cost-conscious behavior, which will play one of the largest roles in bringing healthcare costs down for everyone. This is due to the fact that people spend their own money much more wisely as opposed to “using their insurance.”
HSAs can be structured to reward those who live a healthy lifestyle and give people the freedom to choose the level of insurance based on their needs. People who complete personal health assessments are given funds, and employers can fund the accounts much more cheaply than being forced to insure their employees. Preventative care is encouraged and is FREE. In addition, some people may choose to use HSA dollars to purchase a high-deductible plan in an effort to guard themselves against higher medical costs. The bottom line is the consumer is empowered to make their own decisions as opposed to the government.
The modern technology of government takeover is not improving the wellbeing of America’s healthcare system. Perhaps it is time to try an age-old, natural remedy that has historical proof of success…
Ayn Rand, Capitalism - At Amazon, Ayn Rand, *Capitalism: The Unknown Ideal * (Mass Market Paperback).
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