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Friday, March 19, 2010

Prescription for Failure 

President Obama appears to be on the cusp of success. This Sunday he will likely get the House Democrats to approve the ten-year, $940 billion health care bill. A major campaign promise will be fulfilled; now that's change we can believe in.

Change for the health insurance industry is coming, alright. Except that the bill only strengthens the existing problems in the health insurance system. Too many Americans have the attitude of "somebody else should pay my medical expenses," while forgetting that health insurance is a profit-driven industry. To stay in business, health insurance vendors ensure that the average American pays more in premiums than they receive in benefits. Most Americans would be better off paying routine healthcare costs out-of-pocket, and paying a smaller premium for insurance that would kick in during catastrophic health crises and end-of-life care.

What we get instead with the Obama plan is a government mandate for insurance; Americans will have to buy the level of health insurance coverage that the government deems fit for you, or pay a fine. It's anti-choice and it only fattens up the insurance industry which already has Americans bent backwards over a fence. Medicare payments are being cut, too. If Obama thinks that healthcare providers will cut their rates out of the goodness of their hearts, he will be sorely mistaken when more and more doctors stop accepting Medicare. And once the insurance providers are forced to accept people with pre-existing conditions, the premiums will only increase across the board for everybody.

The healthcare debate has been framed by the president and his congressional allies. All of the bill's proponents are ignorant of basic, free-market economics. They live in a fantasy where the government can simply dictate the cost of healthcare through public health insurance. While that scheme is dead for now, they still think they can reduce premiums by mandating coverage and forcing more people to buy in. My news for them is that premiums are never going down relative to the level of coverage. They will only go up. That's how the free market works. But the health insurance market is so heavily-regulated that it's anything but a free market. It's bound to be even less free (and even more expensive) if the health insurance bill passes on Sunday.

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