The ultimate goal of any liberty-loving health care reformers ought to be competition and choice.
With all the talk about what the Republicans plan to do about Obamacare, both in terms of repeal and “replace,” one question remains as yet unanswered: Who is this next health care reform for? Patients or insurance companies?It may seem an impertinent question, but the substance of most of the Republican alternatives to Obamacare makes one wonder. Most of these “alternatives” are based upon the idea of somehow creating universal coverage under private insurance plans. While the goal might be noble, it also shares a core philosophy with … Obamacare.
I don’t blame those who focus on the insurance market as the ultimate goal in health care reform. After all, the entire American system of health care has revolved entirely around insurance as a payment system (whether by private companies or by government programs) for more than half a century. Indeed, it may be necessary in the short run to favor continuity in the current market for health care in order to prevent mass displacement of plans like what happened under Obamacare.
But mass reliance upon expensive insurance plans to acquire health care is a consequence of thoughtless government policy, not a desirable or free-market outcome.
The insurance lobby in Washington is powerful, and it will make a lot of persuasive arguments that enormous, Obamacare-lite subsidy schemes are the only possible way to avoid catastrophic disruptions for its customer base. Plenty of lawmakers, including many Republicans, will be inclined to go along.
But the ultimate goal, and policy prescriptions, of any liberty-loving health care reformers ought to be not universal insurance, but competition and choice. Of course the insurance companies would love if the government would just subsidize every American to buy their product. Of course that would be the easier political target, vis-à-vis the status quo.
But mass reliance upon expensive insurance plans to acquire health care is a consequence of thoughtless government policy, not a desirable or free-market outcome. Using health insurance to pay for every minor expenditure merely hides the real cost of care and reduces the incentive for hospitals and doctors to compete for more efficient services at lower prices. It also reduces the incentive for consumers to shop around for the best value in health care, like they would for any other service they would buy.
The key is to create choice. Want to stay on your employer-provided “Cadillac plan”? Sure. Want to take that same amount of benefit income and invest in a health savings account? Do it. Want to opt out of the existing system altogether and take advantage of new products and technologies that are emerging to provide economical health care in a free market? Absolutely, do that too.
But to create an actual, viable free market, in which innovation can compete to create new health care delivery systems alongside what already exists, a reform plan must peel back dozens of legal strictures. Not just those applied under the Affordable Care Act, but those that have existed for decades.