I heard an interesting comment the other day on a call-in show.
“If nobody had ever thought of health insurance, we’d all be able to afford a doctor today.”
In a sense, this is true. However, the problem does not lie with a free market. The problem lies with government trying to make health insurance a right, for everybody — and in the process, driving up the cost for everybody.
In a free market, with no government interference whatsoever, there would probably still have been health insurance. This is because as both expensive technology and the demand for medical care grew, prices would tend to rise. It’s probably the case that health insurance would have come about, and still be in existence today, if government had never intervened.
However, as we all know, government did intervene. Government intervened in the 1940s by creating special tax credits for businesses so that they would cover people with health insurance. Would health insurance have become as widespread if government had never done this? Probably not. But because government created an artificial incentive for most employers to cover most of the population — making medical care primarily a commodity paid for by third parties — it was inevitable that the cost of medical care would go up. Simply put, government policy created a scenario where most doctors and hospitals began to be paid for by insurance plans rather than by individual patients. Imagine if haircuts were paid for this way. Or automobile tires. Or carpeting. If somebody else paid for these things, people would be less consumer-oriented and cost-conscious when shopping for them. Consequently, they’d be highly expensive.
Because government encouragement of health insurance led to higher rises in medical care costs than would otherwise have been the case, government had to find a way to address the problem that government itself created. The logical solution? Get rid of the controls. Lower taxes for everyone, across the board, and get rid of the special, targeted tax credits for health insurance. Did the federal government do this? No way. This would mean acknowledging a mistake. Nobody is less willing to acknowledge a mistake than politicians or government officials. In psychiatry and psychology this is called narcissism and grandiosity. When politicians do it, they call it “compassion” and they congratulate themselves.
Instead of acknowledging and correcting their own errors, the government pushed for, and ultimately passed, Medicare. Opponents of Medicare, definitely in the minority, predicted that the program would raise the cost of medical care even more, by providing “free” insurance to everyone past a certain age. These opponents were wrong, only in that they vastly understated how much and how fast Medicare would drive up costs. The inflation created by Medicare led state governments to drive up the cost even further by regulating health insurance companies to a point where they could not offer competitive or cheaper plans. Imagine a world where Walmart or Target were outlawed because they didn’t (according to the government) provide high quality, since they’re discount stores. This is exactly what government did to the health insurance industry. We would consider it insane and unconstitutional if government did this to the industry of candy, cheap clothes, Windex and flip-flops. But when government does this to medical care? Again, they’re congratulated for unprecedented foresight and brilliance.
The end of the road came in 2010. ObamaCare was passed, and health insurance is now guaranteed as a right for everybody. The law went about this in a backhanded way. It still allows the heavily regulated, for-profit health insurance industry to exist, and it nominally allows people to “keep” their current health insurance if they wish. The superficial trappings of a market are still there. But the regulations and directives imposed on the private sector, including the health insurance industry itself, are so onerous that only a well off minority will be able to afford private coverage by the time ObamaCare is firmly entrenched. In the foreseeable future, just about everyone will be on Medicare, Medicaid or whatever equivalent the government develops in the coming years. Only rich liberal socialists, like Oprah and Warren Buffet, will be able to afford private and high-quality health care. Think public schools, only worse — because while the mind can often recover from bad treatment, the body usually cannot.
Yes, it’s possible that the Supreme Court will decisively strike down ObamaCare this June, in a best-case scenario. But this will simply leave us with the high cost of medical care caused, in the first place, by a government-sponsored system in which doctors and patients are encouraged, and even indirectly required, to have a third party pay their medical bills.
With or without ObamaCare standing as law, Medicare and Medicaid are still going broke, and (since these programs are quite literally consuming the federal government), our entire federal government and currency system could go down along with them.
It’s a vicious cycle of the government’s own creation. People have asked for it. The more people depend on a third party to pay for their medical care, the less cost-conscious they are. At this point in American history and culture, virtually nobody thinks of a doctor or a hospital as somebody they pay. They view such life-saving services as a tab to be picked up by somebody else. There will never be a free market in medicine unless or until this basic psychology changes. The existence of this “other payer” psychology for medical care makes it impossible, in a democracy, to advance legislation to return medicine to a free market. Everybody wants freedom in the abstract, but nobody is prepared to pay for it, not when it comes to medical care.
The only “solution” we’re left with, then, is to wait and watch the whole third party government-financed system crash and burn. What that will look like is hard to predict. It’s already happening, rather gradually, which is why there was a push for “health care reform” in the first place. ObamaCare will undoubtedly hasten the crash. Look for something equivalent, or worse, to the housing market bubble (also government created) of 2007-08 for an indication of where medical care is headed, surely in most of our lifetimes.
Ultimately, human beings can and will have to survive the mess they allowed government to create. It’s too bad that Americans will have to learn the same painful lessons that Communist and other socialist societies had to learn throughout history. In America, with its heritage rich in freedom and unparalleled prosperity, it somehow seems less excusable.
The best advice for survival in post ObamaCare America? Stay healthy.