It’s all over the news: Obamacare premiums will vault up a painful average 25 percent in 2017.
We were told, “If you like your doctor, you can keep your doctor. If you like your plan, you can keep your plan.” We were told it would be affordable. We were told everyone would be covered. But it hasn’t exactly worked out that way.
Admittedly, there are a lot of people who now have coverage that they didn’t have before. That’s a good thing, but for a lot of other people, premiums went up, plans evaporated and now many are opting to pay the penalty because they can no longer afford the monthly bite.
What went wrong? A big part of the problem is that the plan counted on getting lots of young, healthy people paying into the system, which would subsidize the older people more likely to need medical care. For some reason, though, the planners didn’t account for the fact that young, healthy people generally don’t buy insurance. They are less likely to need it, and they usually have a smaller income, and would rather spend their money on things more important to them than purchasing health insurance.
In addition to rising premiums, the Detroit News reported that about one-fifth of consumers will only have a single insurer to pick from, since major national carriers like Humana and Aetna are pulling back. The total number of HealthCare.gov insurers will drop 28 percent next year, from 232 to 167.
Another issue consumers have is finding and keeping healthcare providers they like. “To keep costs down, insurers have been narrowing their networks of providers, and this could anger enrollees,” Sabrina Corlette, Georgetown University research professor, told CNN Money. “If consumers don’t think it’s a good deal, they could opt to drop their plans or to remain uninsured.”
Maybe the plan started with good intentions, but it seems to be riddled with unintended consequences. It seems to be endemic to government agencies that good intentions are turned into a muddled mess in the execution. There are alternative approaches to making healthcare more accessible for everyone.
One possibility is a tax credit for people who don’t get insurance through an employer. This would allow individuals to purchase insurance if they’re between jobs, self-employed or part-time workers without other access to health insurance coverage. Such “portable benefits” would also offer more flexibility, undermining the power employer-sponsored insurance plans have over people’s choice of employment.
The ability for consumers to buy insurance across state lines is another popular suggestion for reforming healthcare access. That would increase competition among insurance companies, which would result in more options offered as well as lowering prices.
That sort of competition – unburdened by government interference – may well be a real solution.
“Medical patients tolerate indifferent service the way people tolerate waiting at the post office. The Postal Service, we were told, can’t possibly make a profit; get it there overnight, etc. Then came UPS and FedEx. Competition showed what is possible,” wrote John Stossel on Reason.
Many people, especially proponents of government-administered healthcare programs, are under the impression that the free market is the cause of many of the shortcomings in our current system. That is simply not the case. Ours is not a free market healthcare system.
“We don’t have a free market for health-care services. If we did, we would see a narrow range of prices for the same service. After all, a Ford F-150 pickup with the same options costs about the same in Washington, West Virginia, or Wyoming. Not so hospital and medical costs,” wrote David Johnston in Newsweek.
Instead the healthcare market is weighed down by heavy government regulations, as well as being controlled by insurance companies, hospital cartels and the pharmaceutical industry.
Kel Kelly at the Mises Institute laid much of the blame on the American Medical Association’s century-long government-granted monopoly on the healthcare system, charging that the AMA, “has intentionally restricted the number of doctors allowed to practice medicine so as to raise physician incomes artificially. The primary way it does this is by using the coercive power of the state to restrict the number of approved medical schools in operation.”
That monopoly also allows the AMA to restrict and outlaw alternative forms of medicine that many people would like to have available, such as midwifery, herbalism and massage therapy – all of which can be quite cost-effective compared to “normal” medicine.
Following basic economic laws, wherein monopoly and government regulation decrease supply and increase costs, a true free market for healthcare would increase the supply of doctors and facilities as well as lowering costs. Profit is a powerful motive that drives competition, which in turn improves quality. And who wouldn’t love to have transparent pricing in healthcare? Where else do you routinely agree to services with no idea of the price tag attached?
In a free market healthcare system, it’s not unrealistic that “the cost of staying in a hospital would approximate the costs of staying in a hotel plus the additional marginal costs of the labor services of nurses and doctors, and the costs of the use of the tools and technology,” wrote Kelly.
If everyone paid for his or her own routine healthcare, with an insurance policy to simply cover catastrophic illness, doctors and hospitals simply would not be able to charge more than people could afford to pay.
It may sound terribly idealistic, but consider these two things I know to be true: Firstly, almost anything the government tries to do, the private sector does better, faster, cheaper, and with more options; and secondly, it just doesn’t make sense to keep doing more of what’s not working – try something different!