Most Americans are fed up with our health care system. It’s not necessarily the quality of care, according to a recent CBS/New York Times poll. It’s the cost — and that folks believe their fellow Americans should be covered.
But it’s not clear from the poll that people understand the relationship between high costs and noncoverage, or why premiums are so high to start with. If they did, they’d know where to point blame.
OK. So why are health care costs so high?
Limited competition
Ever try buying insurance in another state besides the one you live in? Don’t bother. The government won’t let you, particularly since powerful state insurance boards want to make sure they’re controlling your plan. That leaves people in states like New Jersey and Massachusetts paying exorbitant prices, if they pay at all. Oh, and since many people buy their insurance through their employers, these folks don’t bother to shop around in a competitive market for individual plans. The tax disadvantages of doing so would be crippling. But this severely limits competition, leaving reduced motivation for insurers to attract your business with lower prices.
Regulatory costs
Do you know that if you’re an insured, healthy male in your early 20s you’re probably paying for mammography, in vitro fertilization and other irrelevancies? That’s because regulators mandate coverage for such things. But you pick up the tab. Your insurance company simply cannot offer a plan tailored to you. These coverage mandates — purportedly designed to “protect” people — ratchet up prices.
Expense account mentality
The nature of third-party plans (whether public or private) is such that if someone else is paying, why not charge it? If the difference is only a copay of $10 between a generic and the brand-name prescription, most opt for the brand. If I don’t have to pay out of pocket to see a doctor for my sniffles, why go to a nurse practitioner? Exercising is hard; why not get diet pills? If you have ever lived in an apartment where utilities were included in the rent, ask yourself: Were you really careful about keeping lights switched off?
When you add up these and other factors, you can see why insurance has become so expensive. And yet Americans are so busy fretting about the uninsured, few have bothered to ask why so many people choose to self-insure.
To bring about revolution in American health care, it wouldn’t take anything complicated. All we need is to: A) fix the tax code to level the playing field so that people have incentives to shop around for insurance rather than simply taking the company plan; B) allow people to shop in other states for insurance — a measure that would also force insurance boards to reconsider some of the more onerous regulations (guaranteed issue, coverage mandates and community ratings) lest they drive business to less expensive states; and C) empower consumers with more expansive health savings accounts (HSAs), which will help them weigh their health care decisions more carefully and save up for old age. None of this is rocket science. It’s the benefit of freedom. But can it happen?
Not likely. The left is preoccupied looking for ways to expand government assistance in areas like SCHIP, i.e. to provide more Medicaid to more children. What they really want is a single-payer system (read: socialized medicine) like Canada’s, with its attendant rationing, waiting lists and high taxes.
But another way to get there is to expand Medicaid for children, Medicare for seniors, then later on ask: “Why not cover the middle?” Creeping socialism. It’s a clever tactic — and all you have to do is to promise Americans goodies in exchange for votes.
The right is understandably worried, so many are embracing either the employer mandate (requiring employers to pay) or the individual mandate (requiring everyone have insurance) believing that if “universality” is somehow achieved the Left will stop trying to give health care to the apparatchiks.
This muddy approach is a deadend, despite what Mitt Romney would have you believe. His plan is crumbling right along with his presidential aspirations. Still, there is something close to a silver bullet for health care.
It was offered during the 2007 State of the Union Address. But few listened to the president, probably because they’re still mad at him about the war.
Max Borders is a writer and New Media Coordinator for the Civitas Institute of North Carolina.
