I always forget to check the "comments," so forgive the late response, but in doing so this morning, I saw that you had weighed in on the health care debate. Your basic point is that the Dem's bill only covers 10% of the insurance currently in place and doesn't touch employer provided health care. Here's the gist of what you said:
In fact, the health care reform bill focuses primarily on the health care options available for individual purchase, and does NOT really interfere with employer-provided health care. Therefore, only the 10% of the population that pays for their own insurance will be affected, leaving the other 90% of the population's health care (which is provided as part of a benefit package from their employer) in tact. Granted, the reform bill aims to insure the remaining 47 million Americans who are not currently insured, which will increase the percentage of the population that are self-insured, but the numbers hardly constitute a government takeover of the entire health care system.
I understand that. It's just that any time the government gets involved, the wise bureaucrats begin to seek "false economies" and distort the market in the process. What do I mean by "false economies?"In Medicare, for example, they use the weight of the government to get lower pricing from the doctors. On the surface that sounds good, but what happens is two things. First, some doctors will not accept Medicare patients, thereby limiting choice. Second, the doctors recover their costs by charging higher prices for patients covered by non government policies. (That's one of the reasons why that recent trip you made to the Emergency Room was so expensive.) The bureaucrats also then get into the act regarding what medicines and procedures a patient should receive. Another "false economy" that replaces the doctor's judgment with that of some politician or bureaucrat.
What will happen under Obama-care is that if cheaper insurance is made available by the government---and rest assured that it will be cheaper not because of government efficiency (an oxymoron if there ever was one) but because of those "false economies,"-- employers will drive their employees to the government plan. Soon, we will have a single insurance company---the government. I'd prefer that the government let insurance companies compete across state lines so that I can pick from 500 different options. After all, no one ever complains that car insurance is out of whack, because consumers are free to buy from Allstate, GEICO (I like their little mascot) and you name it.
I came across an interesting OpEd in the WSJ today. I didn't realize it but, by ruling in 1943 that employee provided insurance did not have to be counted as income by the employee, the IRS completely screwed up the health insurance pricing. Because health insurance became essentially "free," no one cared how much it cost. Here's part of the article:
the original sin was the exclusion of employer-provided health insurance from taxable income—imposed carelessly by the IRS in 1943 so defense contractors could compete for workers without transgressing Roosevelt-era wage and price controls.
Everybody knows this turned "insurance" into something else. Call it prepaid health care, as Milton Friedman did. Call it a giant tax Laundromat for the nation's private health spending.
It became a massive subsidy to third-party payment, an incentive to channel every ache and pain through an "insurance" bureaucracy. It became an incentive for the most economically competent Americans—the secure, high-earning employees of corporate America—to overspend on health care, treating it as a free good.
http://online.wsj.com/article/SB10001424052748704548604575097493017190752.html
One tax increase I would support, is making employer-provided health care taxable income to the employee.
Keep the cards and letters coming.
Dad
Dad,
ReplyDeleteUnfortunately, I wasn't able to read the entire WSJ article as it is only available to subscribers (how elitist!), but in general I am in favor of any reform that would make the health care system in the US more efficient, more cost-effective, and thus more accessible to Americans of all income-levels. If making employer-provided health care taxable income will contribute to this end, then I would support it as well.
I also agree with you that doctors, hospitals, and other health care providers do not simply "eat" the losses that they incur from entitlement programs such as Medicare, for example, but rather make up for these losses by overcharging others, either individuals or non-governmental insurance companies. This drives the price of insurance up in order to cover the inflated doctor's fees, resulting in fewer people who can afford said insurance, yada yada yada, and the cycle continues.
But what about the 47 million Americans without health insurance who use the emergency room as their general practitioner? After all, no one can be denied treatment at the emergency room regardless of insurance coverage, but doctors have these very tedious policies that require upfront payment if you're not insured. Is this not creating a "false economy" as well?
Even in a system where a government plan raises the cost of other insurance carriers, at least everyone is covered by insurance and is going to a doctor's office and not the ER (from experience I can tell you that a doctor in NYC will run you about $200-$300; an ER visit is over $1,100 - that's in addition to the $200-$300 doctor's fee. That's right - it costs $1,100 to sit in the waiting room for 2 hours before triage sees you and makes you wait another hour to be seen by a doctor, who charges you another $300.20 (20 cents for the aspirin she give you)). Now, would you rather have to make up the cost of someone else's $1400 doctor's visit, or the cost of their $300 doctor's visit? I hardly think that eliminating government involvement (a political impossibility in any case - good luck getting Florida to vote you in with that platform!) would bring the price of health care down to a level that everyone can afford, so government intervention is the only alternative. I know this is an argument for the lesser-of-two-evils, but sometimes that's the best you can do.
Secondly, I disagree with your conclusion that "What will happen under Obama-care is that if cheaper insurance is made available by the government---and rest assured that it will be cheaper not because of government efficiency (an oxymoron if there ever was one) but because of those "false economies,"-- employers will drive their employees to the government plan. Soon, we will have a single insurance company---the government."
You say this with the same degree of certainty that a 6th grader would recite the Pythagorean Theorem, but not all social government programs have followed this pattern, and I will use the public school system as an example.
In America, every child has the right and, indeed, is required to attend school regardless of the socioeconomic status of the child's family. As a result, we have a public school education system; it has its flaws, but at least it provides education to all.
ReplyDeleteWe also have a lot of well-off families that want to offer their children something better than the public school option, so we also have a thriving and very profitable private school system. In 2001 Harvard University's endowment was $19 billion, "a sum greater than the physical assets of McDonald's, the G.D.P. of Ecuador, the net worth of all but 5 of the Forbes 400 or, according to The Boston Globe, the endowment of every nonprofit institution in the world after the Roman Catholic Church." (http://www.nytimes.com/2001/06/24/magazine/harvard-s-hoard.html?pagewanted=1)
While some families may choose public school for economic reasons, I don't think anyone will argue that its lower cost is creating a "false economy" within the education system.
Now, I've presented this argument to you and you've dismissed it saying that parents are willing to invest in their child's education but companies are not willing to invest in their employee's benefits packages. But if this were true, how can you account for the vast difference in insurance policies provided by employers today? Why are some PPOs and some HMOs? Why do some companies give you 4 weeks maternity leave and other give you 4 months? If companies only cared about the bottom line, then every company would offer the bare minimum to its employees: 2 weeks vacation, high co-payment, high premiums, no dental.
But this isn't the case. Companies use benefits the same way that they use high salaries: to attract the best and brightest to their company. It is another source of competition. As long as people value quality health care companies will continue to provide it.
Youngest Daughter
PS - you'll have to excuse my "split comment; my comment exceeded the character allowance and all of the blog instructions were in Turkish so I couldn't figure out how to create a new post.