Health and Individual Choice
Steve Verdon at “Outside the Beltway” is misreading or misunderstanding my comment about moving away from an employment based health system. For now, I will give him the benefit of the doubt. In fact, I do not want to replace the private employment based system with a government system. At all.
I didn’t misread or misunderstand anything. As James correctly points out, the implications of Heathalicious’ post were wide open, but definitely hostile towards employer provided health insurance benefits. Based on that I speculated (i.e. guessed, wondered “aloud”, etc.) if we were seeing the first steps towards some sort of Republican support for universal health care. Personally it seemed to fit with the movements of the Republican party of late (expanding Medicare by hundreds of billions of dollars over the coming years), and other massive spending.
Healthalicious then goes on to write,
That’s why I criticized Maryland’s “government knows best” tax and spend health care mandate. Instead, I want a private system where individual health care patients and consumers have more choice and more responsibility. Why should GM or GE or anyone else pick the health care plan for me and my family?
Fine, but then we get the following,
We need to change the crazy WWII era tax code that binds health care coverage to employers and unions and break free baby! Give me individual choice. I will make better choices with those tax dollars than an employer.–emphasis and bold added
Uhhhmmmm what? On the one hand we have Healthalicious writing that we shouldn’t have a “tax and spend health care mandate”, but at the same time he is writing about spending tax dollars more effectively? I’m confused at this point since exactly what taxes is he talking about? Currently we do not have a “tax and spend health care mandate” save for Medicare (which Republicans seem eager to expand beyond all bounds).
Yes, the government has a role. It should help provide tax credits or other support for low income people who cannot afford coverage entirely on their own. But I don’t want big government or big labor or big business making health decisions for me. Do you Verdon? Get my drift?
No, I don’t get the drift as the post seems amazingly muddled. On the one hand we shouldn’t have the government telling people what health care decisions to make…unless they are poor. Then it is okay to tell those people what health care decisions to make. Individual choice for me, but not for thee.
And there is another problem as well. Health care can be amazingly expensive and suppose a young single healthy male decides not to buy health insurance, but then through misfortune needs it. What then? Seems to me he falls into the catagory of: can’t afford it so have the government bail him out. This set up, which strikes me as consistent with Healthalicious’ preferred policies is a sucker’s game for the young and reasonably healthy. Of course those who are not young and healthy (or who simply have assets that could be seized) will be left holding the bag.
This once again gets back to the problem of activist government policy, which Healthalicious and Senator Frist seem so enamored with. I’ve blogged on this topic of time inconsistency previously (see here). Here is how it would work in this scenario. The government announces that it will end the end the tax favored statust of employer provided health benefits and it wont bail people out of financial hardship if they fail to act responsibly and don’t purchase health insurance. Then a person gets sick. The government can achieve a higher level of “social welfare” by bailing out the irresponsible who don’t purchase health insurance. So the initial policy announcement is not believed and some people (notably the young and healthy with no substantial assets) don’t purchase health insurance (note that this is a fully rational decision). We see the same thing with people living in flood zones, areas prone to hurricanes, and earthquakes. Why buy insurance for these things when the government will come in and bail people out.
Healthalicious appears to have the same view as President Bush, that government can work if we just get it juuuuuust right (government helps those who can’t help themselves view of government). Get the right people in there, get the right policy/incentive scheme and things will be peachy. Nevermind the long history of government ineptitude in doing things that were previously provided by the marekt place. When government gets involved the idea that some people have to go without becomes a politically unpalatable outcome. So it is a race to make sure that everybody has “a chicken in every pot and a car in every garage”. President Bush and Senator Frist aren’t part of the solution to bloated government spending they are the problem. And so are the Democrats for that matter. The Democrats complaint about Medicare Part D (the prescription drug plan) is that it isn’t big enough and that it isn’t intrusive enough on the economy (e.g. giving the government the coercive power to set drug prices below the market value).
It is true that our current health care system is broken. There are all sorts of laws and regulations that lead to perverse incentives. For example, no hospital can refuse to treat a patient based on ability to pay. Hence, the young and healthy with few seizable assets have little to no incentive to purchase health insurance. If you do need serious health care, you’ll still get it and since you are basically lawsuit proof why bother spending hundreds of dollars every year on health care? Fixing it by tweaking how the government does things and how employers do things probably isn’t going to work.