The ‘Free Market’ and Universal Healthcare

by Jon N. Hall5/4/17
With Obamacare, Democrats destroyed the market for private health insurance and then supplanted it with what they had the chutzpah to call “the Marketplace.” The people whom Obamacare hurt the most were those who had been buying health insurance in that pre-existing market and who had paid the full price for it themselves but who are now paying more and getting less. Everyone else, those receiving federal subsidies to buy private insurance policies and those thrown onto Medicaid, got welfare from Obamacare. Consequently, the first objective of Republican repeal and replace efforts should be to undo the harm visited upon those who, by buying health insurance, were already doing what Democrats forced other Americans to do under Obamacare.

How to achieve that objective? Congress must restore the “free market.” America hasn’t had a free market in health insurance for decades. If the GOP wants to create a free market for private health insurance, they might consider this:

In a free market, prices are the Great Regulator. But why would health insurance companies compete on price when people are required to purchase their product? So scrap the individual mandate to buy insurance. And how can the price of premiums moderate when policies must cover every conceivable outlay? So the “essential health benefits” that Obamacare requires insurance companies to cover, such as birth control, need to be optional. Congress also needs to require all healthcare providers to charge the same prices to all payers. Charging different prices for the same thing is the most blatant form of cost-shifting.

The Obamacare subsidy program also needs to be scrapped. It’s one of the worst ideas of Obamacare, and it stymies the possibility of a truly free market. And the subsidies shouldn’t be supplanted with Ryancare’s tax credits. The federal government shouldn’t be assisting people to buy private health insurance policies. In healthcare and most other things, the public and the private should be separate. The folks receiving Obamacare subsidies can be put on Medicaid.

Private health insurance should be mainly for folks who are very serious about taking care of their health. Everyone else — the obese, the junkies, the smokers, the inert, and the “uninsurable” — need not apply. The Obamacare policies of “guaranteed issue” and “community rating” are not applicable to the insurance industry; e.g. companies that insure against fire aren’t required to sell policies to owners of straw houses. Calculation of risk is everything in the insurance business; something Democrats can’t grasp.

If that means that Medicaid would be getting a disproportionate share of patients with “pre-existing conditions,” so be it. Insurance is a business. Businesses cannot keep prices low for paying customers if they must insure the uninsurable and accept whatever remuneration the government deems appropriate. (Read what Madam Coulter has to say about free markets in “A Health Care Plan So Simple, Even A Republican Can Understand!” at Human Events.)

Ages ago in a Kansas City restaurant, I happened to be sitting next to former K.C. Mayor Charles Wheeler. Among Wheeler’s many titles was that of medical doctor, and I remember him saying something to the effect that America already had a “universal healthcare system.” Surely, the good doctor was referring to the system provided by EMTALA, the 1986 law that requires hospital emergency rooms to treat all patients lest they be stripped of government reimbursements.

Though they both had legitimate concerns, Ryancare managed to tick off both factions of the GOP. Here’s an idea for “universal healthcare” that might appeal to both the Freedom Caucus and the GOP moderates: If patients neither have private insurance nor can muster the money to pay out-of-pocket for the healthcare they receive, then the feds will pay for them.

Sounds budget-busting, no? Well, here’s the kicker: medical bills that are not quickly settled would be turned over to the feds, who would then put a lien on patients until they pay off their medical bills. Patients’ wages could be garnisheed, their income tax refunds could be seized, if they win the lottery or if they come into an inheritance or whatever, the feds would get paid off first. And when they die their estates could be seized by the feds, not their heirs. So, debt incurred in the U.S. medical system would never be forgiven, never written off, never discharged in bankruptcy.

The system just outlined might be called “Medicaid for All,” not the Medicare for All touted by socialists like Sen. Bernie Sanders. Folks would no longer enroll in Medicaid; it’d be there for everyone. But it would be “free” only for those who could never pay, such as the permanent underclass. Everyone else would end up paying for their medical care. Repayment schedules would not be onerous for those with low incomes, and interest rates would be modest. But pay you must.

The big problem with the EMTALA program is that Congress didn’t fund it, so hospitals often must write off ER treatment as “bad debt.” Which means they have to make up for that uncompensated care by “cost-shifting”: other patients have to pay for the care the non-payers receive. That means that premiums for health insurance must rise. Under Medicaid for All, EMTALA could be repealed. (It’s a stain on America’s lawyers that EMTALA is still on the books, as it’s clearly unconstitutional.)

This system would be a better universal healthcare system than the one we have now, but it wouldn’t be single-payer. Hospitals and doctors would be paid, but the costs would not be shifted over to private insurance policyholders. And there’d be a mechanism to recoup what the feds would be paying out. Democrats probably wouldn’t like it because the new-and-improved Medicaid wouldn’t be “free.” If the new system were to still be considered an entitlement, it would be an entitlement to receive treatment, not to get it for free. Those Americans who don’t buy health insurance will still get healthcare, but under the new Medicaid system they’ll have to pay for it, even if that takes the rest of their lives.

Perhaps the main upside of Medicaid for All is that the prospect of the feds having a permanent claim on one’s earnings and property would be an incentive to buy private health insurance. It might also serve to push folks to take better care of their health and to not take stupid risks, like rock climbing without insurance.

It should now be clear that the Democrat minority in Congress is not interested in working with Republicans. All the Dems are thinking about is getting back their majority. And now they have forced the end of the filibuster for Supreme Court nominees. Therefore, Republicans should end the filibuster for legislation, too. They should craft a complete replacement for Obamacare, replete with tort reform, buying across state lines, and everything else that would create a free market and bring prices down. And then, if need be, pass the thing with 51 votes.

If this seems a bridge too far, remember that one of the reasons Obamacare is such an awful piece of legislation is because of having to dance around the filibuster; read this short history by Dr. Brian Joondeph. The Dems waited for months for the election in Minnesota to be finalized and to provide them their 60th vote, (some think that Senate seat was stolen in the recounts). Americans are less concerned about the institutional niceties of Senate rules and traditions than in getting some relief and certainty. So end the filibuster now, Republicans, because when the Dems come back into the majority, they’re sure to.

Jon N. Hall is a programmer/analyst from Kansas City. • (737 views)

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15 Responses to The ‘Free Market’ and Universal Healthcare

  1. Timothy Lane says:

    A free market in healthcare will require cost transparency. You can’t find the best option if you have no idea what it will cost. It would also help if there weren’t a lot of additional expenses, which can add considerably to the cost.

  2. Steve Lancaster says:

    In addition, the idea that healthcare is an employer responsibility needs to be eliminated. This is going to take massive re-education of both employers and employees.

    No employer pays for health benefits they are a cost of sales just like the electric bill, same with FICA and medicare the costs are simply transferred from wages that could be paid to employees to the government without the bother of asking. At a basic level it is theft.

    • Brad Nelson Brad Nelson says:

      This is going to take massive re-education of both employers and employees.

      I’m more than willing to set up massive re-education camps where we put yutes cold turkey on the pervasive and perverse idea that jobs are primarily a means to gain benefits. This is the perception. The masses have become dumb cattle…with apologies to cows who at least produce milk.

      Part of our course will be to tie yutes into chairs and tell them, “You will be paid to provide a service to your employer so that the company can thrive and therefore everyone take a piece of the profit and remain employed. But what you do with your dollars is up to you. Buy health care insurance. Don’t buy health care insurance. It’s your money. We’re not running a Kindergarten for adult children here.”

      They will strain at those ropes. They will cringe, possible foam at the mouth and go apoplectic, when they hear the notion that they are not just passive agents in the game of life wherein the purpose is to receive the largesse from others just by showing up.

      I know Mr. Kung will be in on this. He’s providing the rope.

      • Steve Lancaster says:

        Gosh, your becoming, dare I say it?
        A free market Libertarian

        • Brad Nelson Brad Nelson says:

          No, conservatism would be where you paid your employees and they spent a little on health care and other basics, and certainly save some for a rainy day. A libertarian would blow it all on pot.

          • Timothy Lane says:

            Not all libertarians. I used to consider myself one, but I never used any illegal drugs (or considered doing so). Indeed, I avoided tobacco and alcohol as well.

            • Brad Nelson Brad Nelson says:

              Not all not-alls are nondescript. But I would think 99.9% of them are information-lite truisms.

              The libertarian vs. conservative argument at this juncture is merely academic, assuming that libertarianism is further right on the Skousen Spectrum. And that’s a very large assumption.

              But assuming that this is the idealized (aka “not real world”) case, there is little likelihood that libertarianism, let alone conservatism, will be the reigning paradigm anytime soon. And to get to libertarianism you must (in idealized theory…it’s a much, much shorter route by-way-of liberalism) first go through conservatism. So let’s all cheer on Ted Cruz and anyone else who believes in limited government, the Constitution, etc., and then once we have Constitutional government again we can see about instituting various degrees of anarchy.

      • Kung Fu Zu Kung Fu Zu says:

        And the type of rope used for restraining these yutes will depend on their attitude; rough course hemp for those with a bad attitude, smooth cord for those of a more polite nature.

    • Timothy Lane says:

      This came in during World War II, when wage and price controls prevented the ordinary means of competing for labor. The key will be changing the law so that medical insurance through the employer receives no tax advantage compared to individual medical insurance.

      • Steve Lancaster says:

        Tim, yes that is when it happened but the correct change is to get employers out of the health care matrix entirely.

        Adjust wages for the costs now incurred to be paid as actual wages and let the free market work to establish coops to make deals with large insurers. And as Brad said, “But what you do with your dollars is up to you. Buy health care insurance. Don’t buy health care insurance. It’s your money. We’re not running a Kindergarten for adult children here.”

  3. pst4usa says:

    Not to complain and violate the new standard of discussion here, but, doesn’t this fly in the face of a “free” market?
    Congress also needs to require all healthcare providers to charge the same prices to all payers. Charging different prices for the same thing is the most blatant form of cost-shifting.
    Wasn’t it government’s attempt to control things in what should be a “free” market in the first place that caused the mess we are in; wage and price freezes?

    • Steve Lancaster says:

      Yep, that nails the issue. If there is nothing progressives hate more its a free people making decisions without some nanny telling the what to do. The sad thing about our culture now is that many people on all sides of the political spectrum seemingly can not survive without some supercilious official telling them what to do. We see this every day with the thunderous barrage of PSAs on radio and television and the drug commercials aimed at audiences who they deem must have their product for some new malady defined with initials, IBS, IBSD, HEPC, etc etc.

      It is not that people do not need information about these drugs, but they go on and on in prime time. What it does is infer that the average American will not live to next week without the expertise of these “experts” and officials.

      We are Americans, we won two world wars that could have destroyed Western civilization and thereby avoided a dark age that could have lasted 1000 years. We went to the moon, solved the mysteries of real diseases like smallpox, measles and polio. We have raised the standard of living for billions of people across the earth and done it by encouraging free markets, private property and consensual government. Why are we tolerating tyranny because Sandra Fluke doesn’t want to purchase condoms?

  4. David Ray says:

    I say that lyin sack-o-crap Gruber should have to pay back the $300,000 he got paid to sell us Osama care.

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