I don't like to blog about the same topic over and over (unless, of course, the topic is football or food) because, well, it's boring and stupid. But after posting about ObamaCare a few days ago, we have seen a lot of push back from the public against the proposal. Without getting into the specifics of the plan, here is about as solid an argument as I can make against it:
It is against the law.
Not the law of the United States. Against the law of supply and demand.
When something is deemed to be too expensive, there are really only two ways to make it cheaper without significantly altering the product (cheaper materials, etc.) The first is to increase the supply. The other is to decrease demand. It's as simple as it gets.
This government plan neither increases supply nor diminishes demand. In fact, it does just the opposite on both counts, which anybody can figure out is a recipe for higher costs. A government-run health care plan will pay doctors less than what they can get in the free market. That's a universal truth, based upon how the current government-run health care programs (Medicaid and Medicare) now operate. There's no reason to believe that any new program will be any different. This underpayment scheme will lead many doctors to decline participation or (when participation becomes mandatory) to leave the practice of medicine altogether. That will cut supply.
By inviting all of the uninsured and underinsured to join the government program, demand will be driven up. Increased demand plus level (or declining) supply will equal rising costs. With rising costs will come pressure on the federal government to contain costs. As there will be no way to increase supply (since increased payments to doctors would lead to higher costs) and no way to limit demand (since the plan will become universal) there will be only one way to limit costs: rationing.
Rationing means the denial of care to some. Which is the very problem we are trying to solve by "reforming" health care in the first place.
I have automobile insurance. It covers me if I have an accident. It does not cover my gas or repairs. I have it in case I get into a situation that is financially unbearable to me. I also have life insurance. I can get a million dollars of coverage for less than $200 a month. Why? Because the insurance company figures I am probably not going to die this year. I have life insurance in case something catastrophic happens to me. But health "insurance" is different. It doesn't just cover worst-case scenarios. It pays for everything from an eye exam up to brain transplants and everything in between. And the insurance company figures that in some shape or form, I am probably going to use my coverage this year. I am probably not going to be hospitalized this year (since the last time I was is such a state, I was a newborn), yet I pay more per month in health insurance than I do for a year of auto insurance.
It makes no sense.
If health insurance went from a Everything-Covered style to a Catastrophe-Covered model, rates would drop like a rock. I have said it before, when people start paying for their doctor visits themselves rather than with insurance, those visits will become a lot cheaper as well.
We aren't splitting the atom here. The law of supply and demand is one of the most fundamental and universal of all laws. We should obey it rather than ignore it.
