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Some people just don’t seem to get it. No sooner had Republican Scott Brown won liberal Massachusetts by opposing the Democrats’ health-care agenda that U.S. Sen. Al Franken, D-Minn., demanded Congress immediately pass health-care reform.
Nothing like having your finger on the pulse.
Franken blames free enterprise for rising health-care costs. But if government intervention could solve the rising-costs problem, it would have happened years ago. We haven’t had a free market in heath care since the advent of World War II wage and price controls - which gave us our current, and dysfunctional, third-party-payer system.
Since the closest thing to a universal truth is that demand skyrockets when something is free (or close to it), global health budgets remain high. In fact, government programs such as Medicare, Medicaid and SCHIPS account for 47 percent of what Americans spend on health care - and are set to rise above 50 percent by 2011, according to the Centers for Medicare and Medicaid Services.
Real insurance, on the other hand, is bought by individuals for catastrophic events. It not only pools risk but prices it. Refusing to let the market price risk creates a "moral hazard" that encourages the very behavior being insured against. That’s why your auto policy coverage has limits.
The real debate therefore is whether to make private insurance more affordable by allowing market forces to work or whether to empower politicians with a government-run solution.
Federal penalties in the Democrats’ plan for failing to buy insurance won’t begin to pool enough resources to cover insurance company losses from an inability to price risk. The "guaranteed issue" requirement combined with a "community rating" scheme means insurance prices will be heading skyward. The net result represents a massive tax increase on the young and healthy.
Indeed, a "guaranteed issue" mandate is really a bailout under the guise of a "preexisting" condition. Why should taxpayers allow someone to avoid paying for insurance until they get sick? If prices were allowed to adjust in a real health-care market, some sort of reinsurance covering the higher cost of pre-existing premiums would surely emerge, as a number of health-care economists have suggested.
Yes, that means some folks would have to pay a bit more, but there’s only one thing worse than more expensive health care, and that’s not being able to get it at any price.
Liberals pooh-pooh health-care rationing, but in Great Britain, the National Institute for Health and Clinical Excellence denies care, and no less than the new president of the Canadian Medical Association has acknowledged exploding costs and serious delays in medical procedures north of Minnesota’s border.
In the U.S., we’re headed down the same road. When Medicare and Medicaid refuse to reimburse health-care providers at market rates (sometimes even below cost), that is a form of rationing. Unless you think going to medical school is getting cheaper, we’ll have fewer medical professionals and fewer facilities while government subsidies drive up demand. Can you say waiting list?
In truth, we now have a record number of Americans with insurance. The majority of those without it already are eligible for public assistance or they live in households with annual incomes of more than $50,000, according to the National Center for Policy Analysis.
Nevertheless, real reforms are needed. Give individuals a tax deduction for the purchase of health insurance, not employers. Eliminate the nearly 2,000 state coverage mandates by allowing insurance products to be purchased across state lines. And expand Health Savings Accounts. Then you’d have real reform.
Jason Lewis
Source: Duluth News Tribune February 2010
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