Editor’s note: This editorial originally appeared in The Gazette (Colorado Springs, CO).
In overhauling the failed Affordable Care Act, Republicans should focus on supply. It is an aspect of health care the left, right and middle never address. We hear not a whisper about it in Washington this week, even as Republicans gleefully dismantle Obamacare.
The world’s economies, micro and macro, revolve around scarcity and abundance. Diamonds and gold are relatively scarce, and therefore expensive and difficult for those of modest means to afford. Conversely, gasoline is so abundant in the United States it costs less in real dollars than in the early 1980s.
When federal regulations limited the number of phone companies, calls to neighboring towns busted the average consumer’s budget. In today’s post-monopolized telecommunications market, calls halfway around the globe can cost the same as dialing a neighbor.
In every aspect of consumer life, more of any service, product or commodity means lower prices and easier access. Supply is the oxygen of American prosperity. It distinguishes us from under-developed countries in which consumers barely access goods and services the need to survive.
The equation simple: Too many consumers chasing too few goods, services and commodities inflate prices and reduce access. Too many services chasing too few consumers reduce prices and increase access.
The Affordable Care Act, along with most health care plans discussed by Republicans, manages distribution of a fixed supply. It distributes, but fails to create.
Obamacare defenders correctly claim the law reduces the rate of health care inflation. It does so by restricting access with barriers that include high-deductible plans and tax disincentives for so-called “Cadillac” private-sector insurance that made health care easy for the middle and upper class to consume. It regulates the demand side while neglecting supply.
For most Americans, no-deductible, 100-percent coverage plans are a thing of the past. Meanwhile, millions of consumers who lacked insurance have plans they cannot afford to use because of expensive deductibles and co-pays.
Former President Bill Clinton said it best, as the only high-profile Hillary Clinton supporter who appeared to understand the economic angst among white, working-class Americans.
“So you’ve got this crazy system where all of a sudden 25 million more people have health care and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world,” Clinton said.
True, but Republicans cannot kill simply Obamacare without quickly devising a replacement schematic that is genuinely egalitarian. It is a matter of supply, stupid.
Government distribution schemes have never ended well, and Obamacare provides the latest and greatest example. By contrast, surplus has always been a benevolent distributor, blind to any consumer’s race, religion, gender, sexual orientation or economic status.
Easy and affordable access to health care would mean a palpably increasing selection of health care options. It would appear on the scene as more emergency rooms and surgical centers in strip malls. It would mean the best and brightest students longing for careers in medicine. It would mean universities emphasizing medical studies with the same zeal they have shown for marketing law and technical degrees.
The latest Republican revolution will be short lived if Congress and the president cannot quickly unleash the health care market to provide more health care. Republicans are destroying Obamacare, so they had best be ready to create something that works. Any health care plan lacking supply as a central tenet will almost certain fail.
Supply side policies would reduce or eliminate protectionist barriers to competition. They might also more heavily subsidize students pursuing medical degrees. They might direct the Small Business Administration to aid more medical entrepreneurs. Possibilities for supply-side health care policies are limited only by the imagination, but Republicans aren’t even discussing them.
Republicans are in charge for at least two years. If they liberate the mighty forces of surplus supply, everyone will win. If they don’t, killing Obamacare will spell Republican demise in 2018.
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