Why Do We Think Health Care Should Be Free?
Somebody has to pay for even good things.
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While reporting the Supreme Court discussions of Obamacare, the New York Times got to the heart of the matter. After explaining how the conservative justices seemed to be leaning against the government's desire to force everyone to buy health insurance whose coverage had to meet government standards, they quoted Justice Ginsburg:
Mr. Verrilli [the government's lawyer who's supporting Obamacare] argued that the law was a valid response to a crisis in the market for health care. The individual mandate, he said, merely regulates how people pay for services they are virtually certain to use at some point in their lives and is well within the authority granted to the federal government by the Constitution.
Justice Ginsburg seemed to agree, saying the mandate was a response to the fact that uninsured people receive free health care that ends up being paid for by others. “The problem is that they are making the rest of us pay,” she said. [emphasis added]
Justice Ginsburg has it completely right. The main problem with health care is that hospitals are required to provide unlimited free health care to anyone who can't pay. That's how one illegal ran up a million dollars worth of hospital charges and a group of illegals whose kidneys were failing ran up so many unpaid charges that a hospital was forced to close its dialysis unit.
The driving force behind requiring everyone to buy health insurance was to take care of the problem of so many people getting free health care. Justice Ginsburg understands the problem posed by uninsured people who receive free care: “The problem is that they are making the rest of us pay.”
Why not attack the problem at its root? Why should health care be free?
How Did We Get Here?
Health care used to be bought and sold just like any other commodity. Doctors often gave their services at reduced rates when people couldn't pay and collected above-market sums from the wealthy, but these were voluntary decisions made by individual doctors and patients. When my father-in-law needed an expensive operation in his youth, he was treated at the Mayo Clinic. His father was astounded at how low the bill was. "We have a fund to take care of people who can't pay," he was told.
Go to any hospital, the walls are festooned with plaques thanking this person for the room and that person for the equipment. The spirit of American philanthropy is alive and well when it comes to hospitals. The problem is that the law forces hospitals to provide care for anyone who can't pay, so people flock from all over the world to take advantage of us.
This situation came about because of government meddling in the economy during WW II. With so many men drafted into the military, businesses found it difficult to find enough workers and started increasing wages. The government was afraid that this would make weapons cost too much. Instead of letting the market clear so that workers went to the places that needed them the most, the government froze workers' wages.
As usual, clever business leaders figured out a way around the government's rules - they started offering free health care as a fringe benefit. In order to make sure that they wouldn't run afoul of the rules against raising wages, they persuaded the IRS that health care wasn't a part of wages, with the apparently minor side effect that it wasn't subject to income tax.
We've Seen This Again and Again
As always when the government meddles in a market, bad effects pile up. When the government started making tuition loans, colleges raised their fees way faster than inflation. College is now so expensive that many students graduate burdened by loans they can never pay given the subjects they studied.
We saw the same bad outcomes when the government started forcing banks to lend money to minorities who couldn't pay. All this extra money pushed up home prices. This caused the real-estate bubble which finally popped.
How did the wage freeze during WW II affect health care? People who had health insurance stopped caring about the cost because it was free to them. Health workers have no reason to drop prices because patients on the table don't care; they charge whatever they can get. Insurance people don't really care because it's not their money, they just raise premiums to cover the bills.
What's more, as income taxes grew in size and breadth, tax-free health insurance from your employer became more and more valuable. Buying insurance on your own with after-tax dollars is automatically a third more expensive than with pre-tax dollars through your employers, creating a powerful drive for employer-provided insurance. Unfortunately, that too has a bad side-effect: when you lose your job, not only do you lose your income, you lose your health insurance as well.
After a few decades, enough families got health care for free through their employers that it was decided that it was unfair for some people not to have health care. Laws were passed forcing hospitals to treat anyone who came regardless of ability to pay.
It's no wonder that medical costs have gone through the roof - nobody, but nobody really cares about cost. There's no hope of the Obamacare pricing panels having any effect on costs; government has never been able to control costs no matter how hard they try.
One state tried to limit the number of visits to the emergency room. Poor people started calling ambulances to show that the visit was necessary. Costs went up.
President Clinton couldn't control gasoline costs and the Emperor Diocletian couldn't control food costs way back in Roman times. President Obama can't either.
Justice Ginsburg identified the problem - freeloaders make the rest of us pay. Although the Supreme Court is considering killing the Obamacare requirement that everybody buy health insurance, that isn't the real problem. The real problem is that we've decided that health care ought to be free.
Other nations - England, Canada, Japan, most of Europe - have made the same decision. Once it's free, the only way to limit costs is by making people wait for treatment. Enough of them die while waiting that they can keep within the budget. People don't like that, of course, so the budget keeps growing.
If wishes were horses, beggars would ride. Wishing health care to be free won't make it so, no matter how hard we try. Unless the system starts reflecting a decent part of the cost back on users, costs will go nowhere but up.
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What does Chinese history have to teach America that Joe Biden doesn't know?
Here we have another impossible situation imposed upon us by the congress of federal meddling. We have a big problem in that if we were to do away with company sponsored insurance there would be a huge backlash. People would rather ride the horse until it collapses instead of doing a little walking on their own to help the horse out.
We need a transition phase from our total ignoring the cost of health care to a more responsible way to address the problem. My idea is already in place to a degree but unfortunately it requires some self reliance which the liberals will never agree to unless the horse dies. Here is how it would go. Let's say for example that a company spends $10,000 a year on an employee's health insurance policy. In my world that money would go in to a Health Savings account, no taxes incurred. Out of this $10k the person could if he wanted to buy a catastrophic policy in case he had a terrible illness. If he was one of the lucky ones he would simply amass a lot of money that could be used for his retirement and his heirs could inherit the money to do with as they wish. I would go even further as I would not require that the companies that provide the health insurance to spend the whole $10k. Since part of that $10k goes to the overhead of the insurance company's cost of paying the bills that would be eliminated since the person would be the payer, not the insurance company. We really don't have an insurance system in America but a health payer provider that takes care of ordinary health care like a doctor visit, a prescription drug, etc. These are things that should be part of our everyday life, budgeting for our own health care and not the ignoring of costs and spending money that too many think has no consequence on them. I would also allow people who have to buy their own insurance to be able to buy it with no tax consequences like the workers of a company enjoys.
At one point in time, say 50 years from now these Health Savings plans could substitute the government's medicare program and we would all be better off. Rest assured, these problems will not go away. A solution like mine needs to be sold to the people as a program that will benefit them personally. The liberals will scream as this plan removes them from power in a huge area of one's life. It's the typical question, "Do we as Americans want more or less government intrusion in our lives?". The liberals have so dumbed down our education system and captured the media that anything will probably not see the light of day when addressing our problems as a nation. A revolution is inevitable one day as we slide down the spiral to bankruptcy. When Joe Six Pack awakens he will be mad and that is when the revolution will occur. Until then expect more of the same.........