Thursday, November 26, 2009

The "uninsured Americans" Trojan horse

One of the main issues that allegedly motivates calls for health care "reform"- be it instituting single-payer, a "public option," insurance mandates, requiring insurance companies to accept all patients or charge the same amount regardless of risk, or some combination- is the problem of people who can't get insurance because they are poor or already too sick to get insurance. The problem, we are told, is that people with preexisting medical conditions can't get insured, and thus are either deprived of medical treatment or are impoverished paying for it. Similarly, people too poor to have insurance let problems fester untreated because of the expense. The extent of this problem is exaggerated greatly, since the most commonly cited statistics lump people who can't get insurance together with people who have simply chosen not to, but it does exist.

As is so often the case, this is a problem with roots in previous government interventions. The tax code and various government regulations encourage people to use insurance for everything medical-related, including routine and foreseeable expenses, which encourages greater consumption and less concern for cost, which drives up the price of medical services, which increases the amount of money the uninsured have to pay out of their own pocket. Another contribution to the plight of the uninsured comes from all the various conditions and treatments the law says insurance companies MUST cover, which outlaws stripped-down insurance polices that would be within the reach of more people.

Fixing that is out, needless to say, since the people who most loudly profess their concern for the uninsured are generally the same people who would scream bloody murder at the thought of people who can't afford gold-plated insurance buying a more modest version they can actually afford. To many people, actually getting the disadvantaged more access to medical care is less important than being able to boast about being the sort of big-hearted idealist who believes the disadvantaged should have access to the best medical care imaginable, and big-hearted idealists don't lower themselves to facing the unpleasant tradeoffs that exist in a world of scarce resources.

It's certainly a plight that ought to inspire sympathy, harming people whose lives are already harder than most. It's not surprising that this issue would loom large in any criticism of the existing system. There's a question that is almost never raised, however: What does any of this have to do with the proposed reforms?

As a libertarian, I think these people could be helped far more effectively and justly through market processes and civil society, if only the government would get out of the way, but what if I were a statist setting out to aid the uninsured? For a moment, let's take it as given that any sort of deregulation is off the table, and that this is a problem that requires a government solution. In that case, the solution to the problem is quite obvious: Set up a government assistance program, funded out of general tax revenues, for people who can't get insurance and have it buy them medical care as if it were an insurance company. It would, essentially, be a “public option” specifically for people who are currently shut out of private sector insurance due to poverty or illness.

Problem solved, and with far less government expense, distortion of the marketplace, inconvenience to the general public, or divisive political acrimony than any of the actual major proposals. There is potential for fraud and abuse, but no more so than any other welfare program and probably less than many. As government solutions go, this is relatively simple, and it's really just a logical extension of things the government already does now. It's modest size and consistency with the precedent set by existing forms of government assistance would make it far less controversial than what's actually being proposed.

Supporters of greater government involvement in health care have other arguments for their program, of course, but the issue of the involuntarily uninsured is simply irrelevant to the question of whether the health care system as a whole needs some sort of radical change imposed by the government. If you're really concerned about a small segment of the population being deprived of a resource and want the government to make sure they have access to it, give them the resource. When faced with the plight of people who can't afford food, liberals generally advocate giving them food stamps or monetary benefits. They don't use the needs of the desperately poor to argue that the government should nationalize agriculture or run Public Grocery Stores to compete with Wal-Mart and Safeway.

This ought to be a political slam dunk, winning support in Congress from every Democrat and many moderate Republicans. Libertarians and some fiscal conservatives might object, but there would be nothing like the storm of controversy that has raged. It wouldn't preclude further legislation creating other government interventions relevant to other problem areas of the health care system if they are needed. If Obama had proposed it upon taking office it would have almost certainly passed already; that is surely a selling point given how frequently we're told that getting help to the uninsured is a dire necessity that must be accomplished quickly, before more lives are lost. The need to help people who can't get insurance is cited by liberal supporters of health care reform more than any other issue, and this would address that problem quickly and without holding the issue hostage to far more intense arguments over proposals for more sweeping government intervention.

There are limitations to my proposed alternative It wouldn't turn every American into a captive customer of the insurance industry. It wouldn't allow the government to turn private insurance into a concealed welfare program where taxes paid to support beneficiaries are disguised as payments to supposedly private companies for their services. It wouldn't give the government greater control over everybody's personal health care choices. It wouldn't create a means for the government to crowd private insurance out of existence altogether.

It would, in short, solve (as well as a government solution can, anyway) the problem that provides the lion's share of the justification for a major increase in the government's involvement in medicine care without setting the stage for the destruction of private sector health insurance and total state control of medicine. And what “reformer” worth his salt would want that?

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1 comment:

b-psycho said...

What's most instructive about your modest proposal is that somehow Medicaid didn't fill that niche already...

That's government for you. A program ostensibly meant to help the poor pay for health care ends up such a mess that many providers reject it, & thanks to the rising cost of living there's people that don't qualify anyway that still can't afford insurance -- so the proposed solution is to stick another program on top of it.

It'd be cheaper & simpler to just give them the money. That goes beyond health care, & to social welfare in general. If it was really a matter of aid & not power, then the entire pile of gov't aid would've been converted to a Citizen's Dividend funded through something like a land value tax or a tax on stock transactions (with the intent of shifting costs for the State towards the types of people that get the most benefit from it). But simple doesn't tighten the grip enough, so it's never an option.