Health Care Costs: It’s Not About Expanding Coverage, It’s About Reining in Costs

9 Nov

I may have given too much away in the title of this post, but after my initial point about the precedent of Congresses’ ability to mandate health insurance coverage I thought it was important to address the real question facing health care reform – cost.

Some liberal proponents of health care reform have argued that access to health insurance is a human right. This concept is wholly unsupportable based on the reality that this country is a free market economy. No one has the right to any good or service offered by the free market, they (the public) merely has the right to be among the people who create demand. It is the public’s right to be able to demand a product from the free market, but no one is required to offer it. That’s a fairly clear cut issue.

It’s important to establish that health insurance is not a right, because it shifts the focus from expanding access to controlling cost. While controlling cost will expand access it’s important to understand the real problems in the health care system. While insurance companies have certainly limited access (i.e. denying individuals coverage for pre-existing conditions), it’s because such limitations are in the best interests of their bottom line, that doesn’t make them morally culpable just assholes.

But the means of appropriately regulating a free market industry is through a combination of limited legal regulations and more importantly tax breaks or incentives to foster good actions, thereby making the right thing also the profitable thing. “But that’s a general philosophy, what about the current legislation?”

The thing is that the US government already pays for 29% of health care coverage in this country. 29%!  This bill is meant to address the 15% uninsured, in terms of access. But even if this legislation could extend coverage to the remaining uninsured, the government would still be insuring less than half of the country. So where is the socialism?

This legislation is meant to address extending the coverage by roughly 10%, over the next several years.  Most of this 10% will be eaten up by the private industry which has not expanded mandates to offer people coverage.  Again, where is the socialism?

The answer is that there is no socialism, what there is though is an expansion of coverage without a clear and well understood economic plan for the future of the system. The federal government is already spending roughly 20% of its budget on Medicaid and Medicare.  This new legislation will actually only increase the current federal health care expenditure slightly, perhaps less than 3% by some estimates. 

The problem isn’t the health care reform bill; the problem is the health care system and it’s lack of cost containment. This was why we needed tort reform, to help lower insurance premiums for doctors. Those high insurance premiums get passed on to patients, and inflate the cost of health care policies. It’s a trickle down effect, that hurts everyone but the lawyers.

But tort reform is just one issue that could have a positive impact on reducing health care costs. Reducing costs will have a systemic impact on the affordability of writing health care policies in the free market. If it’s a less expensive product to create, then it’s a less expensive product to sell. A more affordable product will expand access.

But you can’t just expand access without addressing the broad economical picture, which has been less effected by the health care reform bill than by the current state of the health care system in the country. Hence my initial argument that everyone needs to calm down, we’ve been living with this problem for a while now and the ghost of Stalin hasn’t re-written the Constitution yet.

2 Responses to “Health Care Costs: It’s Not About Expanding Coverage, It’s About Reining in Costs”

  1. Chris March 30, 2010 at 2:40 pm #

    You fail to address several things in this law that will actually increase cost:

    Pre existing conditions
    Increased risk pools
    The Wheelchair Tax

    You are so quick to cite precedent regarding John Adams and an obscure 1798 Act, why don’t you analize the 2006 MA Health Care law that caused an increase in cost by nearly double digit premiums.

    This is also looking at the world through a very optimistic view. That most citizens will pay for their own insurance. Think about the percentage of Americans now receiving food stamps and other entitlements. When you are increasing taxes for one class to pay for the health care of a poorer class that is the very definition of socialism.

    • Mike Flynn March 30, 2010 at 4:23 pm #

      I just don’t see the government run entitlement that this bill creates. I grant that this bill creates additional costs, but I don’t mean to support the bill as much as claim it’s relative meaninglessness. Well perhaps a more appropriate characteristic would be to say that it’s not quite the end of the world some want it to be.
      But regardless the greatest negative of the bill is that it lacked cost containment and long term economic planning. What it did do was weak and while it definitely will cost money, given what we are currently spending, I’m not really that worked up about it.

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