25 October 2009

This deserves some research

Anybody have insight information into the following quote from Fearless Comrade's post on healthcare reform?

Why can't part-time workers, small business employees, or entrepreneurs get affordable health insurance? Because the government gives tax breaks to big companies for overpriced plans. Because individual states have absurd minimum coverage mandates. Because the federal government allows states to prohibit interstate health insurance sales (every other kind of insurance can be bought across state lines). The only people who have challenged this are Republicans, but raising the evil specter of freedom and interstate competition sends Democrats into howling fits of rage.

The fact that people have insurance plans that pay for the bulk of costs (as opposed to nearly all other forms of insurance, which cover only catastrophes) and don't pay out of pocket is why insurance companies make the payment decisions. If you want to make the payment decisions yourself, pay for it yourself. But of course, decades of liberal government and government meddling have assured that the last person who will pay for your care is you. And who does he think created Medicare?

The answer to him, of course, is more bureaucracy and more government meddling--that, not freedom, will increase supply and decrease costs, just like it never has in any market segment, ever (so we are lapsing back into the health industry not being ruled by economics). The answer is more price-fixing and more mandates. This is what von Mises predicted in Liberalism: Because government interventions harm the market and cause results opposite to what was intended, interventionism gives way to more socialism. Governments fail upward.

2 comments:

Unknown said...

If you allowed health insurance sales across interstate lines, all the insurance companies would set up shop in whichever states legislate the fewest consumer protections and continue merrily screwing people over from there.

A friend of mine recently got sick while in France and had to go to an urgent care center with no insurance. Her total cost, including being seen by a doctor and getting prescription drugs, was less than $60.

the reified bean said...

Seriously? You mean consumers wouldn't demand a better product?

Right now, there are states where 90% of health insurance is sold by one company...because that company is in bed with the state regulators. So the consumers are screwed, not by your fictional evil capitalist trolls, but by regulators.

Given a chance, the market will provide competitively priced, high-quality goods for people to buy.

If you want the .gov to step in and, via tax credits or even refunds-greater-than-taxes-paid, subsidize health care for those below a certain income-line, I'm all for it.

But the providers themselves need to be private and competitive. Those who provide the best array of services for the least cost will succeed. Those interested in merrily screwing everybody over will fail.

Increased regulation decreases economic efficiency in the provision of goods and services. And it decreases transparency in government. AND it increases corruption between business and political interests.