Tuesday, August 18, 2009
Obamacare and the Feserting Wound
Public plan or no? That's the question President Obama faces in pitching his vision of healthcare reform. The American people are quickly learning that "change" and "reform" can often be two very different things, and they're coming out to denounce the idea at townhall meetings with Democrat lawmakers. They're justifiably angry at the prospect that the government could become more intrusive in their healthcare choices and jeopardize the quaity of healthcare insurance that most Amerians already receive. And they're savvy enough at math to figure out that our nation's deep debts will make a taxpayer-subsidized plan unsustainable without taxing the middle class. Blue-Dog House Democrats from conservative districts realize this, and it's clear that there aren't enough votes for the public plan to ram it through the House.
To be fair, publicly-funded health coverage is not a shotgun-blast that will kill the private health insurance industry. Rather, it's the pin-prick would that never heals. It gets infected and bleeds until the industry slowly dies. President Obama's "post office versus UPS" analogy is fairly apt until he glosses over its fatal flaw: FedEx and UPS really don't compete head-to-head with the postal service. After all, how frequently do most people receive letters and greeting cards from UPS? Instead, the private carriers offer a higher-quality, higher-priced service for those critical deliveries that consumers wouldn't trust to the postal service.
The health insurance business will be quite the same. What checks will exist to ensure that employers don't dump their existing coverage and push employees onto Obamacare? For that matter, how many people will jump ship from their current insurance companies, lured by the promise of Obamacare's lower premiums? As time goes by, Obamacare will siphon away more and more people from private plans until just a handful of large insurers remain in the game, and they'll survive in an atmosphere of increased government regulation and oversight.
The ludicrous idea that a government plan will "keep the private industry honest" stems from the minds of men who either don't understand the capitalist system, or reject its basic tenets. Government competition doesn't control prices; competition between private-sector entities controls prices.
To that end, there isn't enough competition in the health insurance industry. We live in a culture where people expect employers to give them good health insurance, and they get railroaded into an employer-provided plan. Why can't every employer pay employees a healthcare stipend they can put towards an insurance plan of their own choosing? And why can't consumers choose insurance providers who operate outside of their home state?
The spiraling costs of healthcare can't be solely blamed on the capitalist system (or the mockery of capitalism which exists in today's regulated healthcare environment.) Massive damage payouts in medical malpractice cases force doctors to pay higher premiums to run their practices. And these costs are passed on to the consumers of healthcare. Would laws capping medical malpractice damages lead to lower premiums for healthcare providers, and would consumers see a benefit for this tort reform?
For people who still want the government to do something to lower health costs, they may want to revisit "Kerrycare" before pressing on with Obamacare. During his failed presidential run, John Kerry proposed government subsidies in the case of "catastrophic health emergencies." The idea should be examned closely. Depending on your definition of a catastrophic emergency, the plan may prove very costly to the taxpayers. But it could also bring down the premiums that consumers currently pay for medical coverage.
There are a lot of options on the table for true reform within the American health insurance system. The Democrats do Americans a disservice the longer they fixate on a public health insurance plan. The public plan has no guarantees that it will do anything to improve the cost or quality of healthcare, aside from the strong-arm tactics the government can employ to force providers into taking less than market rates for their services. The only guarantee is that the public plan will saddle Americans with more taxes and debt than we already see.
To be fair, publicly-funded health coverage is not a shotgun-blast that will kill the private health insurance industry. Rather, it's the pin-prick would that never heals. It gets infected and bleeds until the industry slowly dies. President Obama's "post office versus UPS" analogy is fairly apt until he glosses over its fatal flaw: FedEx and UPS really don't compete head-to-head with the postal service. After all, how frequently do most people receive letters and greeting cards from UPS? Instead, the private carriers offer a higher-quality, higher-priced service for those critical deliveries that consumers wouldn't trust to the postal service.
The health insurance business will be quite the same. What checks will exist to ensure that employers don't dump their existing coverage and push employees onto Obamacare? For that matter, how many people will jump ship from their current insurance companies, lured by the promise of Obamacare's lower premiums? As time goes by, Obamacare will siphon away more and more people from private plans until just a handful of large insurers remain in the game, and they'll survive in an atmosphere of increased government regulation and oversight.
The ludicrous idea that a government plan will "keep the private industry honest" stems from the minds of men who either don't understand the capitalist system, or reject its basic tenets. Government competition doesn't control prices; competition between private-sector entities controls prices.
To that end, there isn't enough competition in the health insurance industry. We live in a culture where people expect employers to give them good health insurance, and they get railroaded into an employer-provided plan. Why can't every employer pay employees a healthcare stipend they can put towards an insurance plan of their own choosing? And why can't consumers choose insurance providers who operate outside of their home state?
The spiraling costs of healthcare can't be solely blamed on the capitalist system (or the mockery of capitalism which exists in today's regulated healthcare environment.) Massive damage payouts in medical malpractice cases force doctors to pay higher premiums to run their practices. And these costs are passed on to the consumers of healthcare. Would laws capping medical malpractice damages lead to lower premiums for healthcare providers, and would consumers see a benefit for this tort reform?
For people who still want the government to do something to lower health costs, they may want to revisit "Kerrycare" before pressing on with Obamacare. During his failed presidential run, John Kerry proposed government subsidies in the case of "catastrophic health emergencies." The idea should be examned closely. Depending on your definition of a catastrophic emergency, the plan may prove very costly to the taxpayers. But it could also bring down the premiums that consumers currently pay for medical coverage.
There are a lot of options on the table for true reform within the American health insurance system. The Democrats do Americans a disservice the longer they fixate on a public health insurance plan. The public plan has no guarantees that it will do anything to improve the cost or quality of healthcare, aside from the strong-arm tactics the government can employ to force providers into taking less than market rates for their services. The only guarantee is that the public plan will saddle Americans with more taxes and debt than we already see.
