America Doesn’t Need a Health Insurance ‘Czar’
The Wall Street Journal warns us that under ObamaCare, we may see yet another “czar” — this time, in charge of our mandatory health insurance. This would be in addition to the long list of czars President Obama has already appointed for “green jobs,” executive pay, domestic violence, international climate change, and the auto industry.
Under any system of mandatory insurance, the government must necessarily determine what constitutes an “acceptable” plan. The health insurance czar would be in charge of a new bureaucracy called the “Health Choice Administration,” which would regulate what prices insurance companies could charge for policies, who they must cover, and what benefits they must offer.
If you’d rather purchase a low-cost “catastrophic-only” policy, but the czar determines that all health plans must include benefits such as in vitro fertilization, blood lead poisoning treatment, and chiropractor services (as some states like Massachusetts already require), then too bad. You won’t be allowed to spend your own money based on a rational assessment of your needs and circumstances. Instead, Washington will tell you how you must spend your own money.
To add insult to injury, President Obama has repeatedly promised:
If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.
It turns out what he really meant was: “If you like your health care plan, you will be able to keep it — but only if my czar lets you.”
After a five-year grace period, large employers who offered health insurance to their workers would have to abide by all the rules set by the czar as to what counts as a “qualified” plan. Small employers offering health insurance could be subject to the new rules even sooner.
The only argument between the president and Congress on this point is whether your limited range of mandatory insurance choices would be determined by a single national-level czar (which the president and the House Democrats prefer) or 50 state-level czars (which the Senate Democrats prefer).
Furthermore, Fox News reports that the planned system of mandatory insurance would amount to a massive transfer of wealth from the young to the old. Most young healthy people would do best with a low-cost catastrophic-only health insurance plan to cover major emergencies, and a health savings account to cover small routine expenses. But under ObamaCare, they would be forced to pay a disproportionate share of others’ medical expenses:
“If you charge people a fair price, then a 50-to-60-year-old should pay about six times as much as a 20-year-old,” said John Goodman, president of the National Center for Policy Analysis. But he noted that the Senate bill says older people can be charged only three times as much; the House bill says they can be charged two times as much. “So we’re going to penalize low-income young people in order to lower the premiums for older wealthier people.”
Young adults who are healthy would be the most unjustly affected by mandatory insurance. They consume the fewest medical resources. Under mandatory insurance, they would most heavily subsidize the costs of the older, more-frequently-ill patients.
Mandatory insurance thus robs them of money they could use for their own goals, such as saving to buy a first house or to start a business or a family. In other words, the insurance czar would force them to sacrifice their lives and futures for the sake of the collective.
When an insurance czar requires everyone to purchase health insurance, then sets the prices and benefits independent of a free market, it turns insurance from a system of voluntarily shared risk into a thinly disguised form of government welfare.
Trying to solve the problem of the uninsured by forcing everyone to purchase government-administered insurance would be like trying to solve the problem of homelessness by forcing everyone to buy a unit in a government-run housing project.
Instead of yet another presidential czar to make our insurance purchasing decisions for us, we need genuine free-market reforms.
Patients should be allowed to purchase insurance across state lines and use health savings accounts for routine expenses. Insurers should be allowed to sell inexpensive, catastrophic-only policies to cover rare but expensive events. States should repeal laws that force insurers to offer (and patients to purchase) unwanted mandatory benefits such as in vitro fertilization coverage.
Such reforms could reduce insurance costs over 50% — making insurance available to millions who cannot currently afford it, while respecting our freedoms.
Americans are not serfs in need of a czar. If we value our health and our freedom, we should reject both the idea of mandatory insurance and a health insurance “czar.”
Don’t forget coverage for sex change operations….you can bet your bottom dollar (perhaps your last with this administration)that will be a required item on your insurance! It is probably already buried in the bill somewhere.
We need to call these folks “Commissars”.
They need to branded as Commissars to underscore Obama’s socialism, the reason why so many appointments are vacant (which require Senate confirmation) is the simple fact that Obama has implemented a Council of Commissars. Google that if you’re not familiar with the terms.
Dr. Hsieh, you make some great points here. But unfortunately you glossed over or completely missed the most obvious and most critical ones affecting this issue, which the Socialists (read: contemporary Democrats) are exploiting to pose no less than an existential threat to this Republic. In the end, you fall into the same trap as most of the rest of the nation: you’ve conflated health care with health care insurance, and failed to recognize the real purpose of insurance in the first place.
The one facet that is a guaranteed requirement for ‘acceptable’ insurance in ObamaWorld will be the least relevant to health care: collectivism. You touch on this by noting how ObamaCare will rob the young, but fail to drive the point home.
The State has been pushing collectivized – that is, socialized – medicine for decades. The goal of that process has now become clear: Japan-style socialization of the health care economy and, with it, the ‘justification’ to legislate any facet of life that might affect the cost of care (as determined by the “health czar”, of course).
This process began with Medicare, proceeded with the failed HMO gambit – the State’s first attempt to take over the health care industry – then it morphed into subsidized group comprehensive policies, which have been driving costs to increase at skyrocketing rates for years. This State meddling has encouraged health care costs to increase at rates far higher than inflation throughout that time; during that same time, many other industries saw similar, and often greater innovation but their commodity, and even specialty item costs remained relatively affordable. Computers, autos, telecom – ALL have seen remarkable improvements in their technology and capability and ALL have remained relatively affordable. The difference? We don’t use insurance to pay for ANY commodity other than health care. Someone, somewhere needs to start seriously thinking about WHY that is.
Insurance is a tool for mitigating financial risk. With group comprehensive insurance, however, we abuse insurance and turn it into a wealth redistribution mechanism. And as we’ve seen for decades, when used to “spread the wealth around” by spreading the costs (i.e., of health care) around, it is an extremely inefficient mechanism.
More dangerously, however, the evolution to widespread use of comprehensive health care insurance has pushed the cost of health care itself to a point where more people simply can’t afford routine care. Comprehensive group insurance – insurance that covers “everything” and forces the collective to bear the costs of those who consume covered services – has led to constant price increases over time. This type of insurance encourages over-consumption as well as increased ‘defensive’ medicine (thanks to nonexistent tort reform), while at the same time disassociating the consumer from the actual cost and value of the goods and services they consume. Prices are set by a proxy/broker system that is controlled by the insurance companies, NOT the consumer. Unlike every other market where the consumer purchases a commodity, comprehensive group insurance has destroyed the normative market process that keeps costs relatively affordable for the majority. The result has been skyrocketing health care costs – a phenomenon that is now being exploited to implement socialism.
It’s the cost of HEALTH CARE, not the cost of INSURANCE that we must focus on reducing. Unfortunately, this nation (and most of the world) conflates health care and health care insurance so blindly and completely that we now commonly make two grievous errors: we believe that increased competition among insurance companies will bring health care costs down and we believe that INCREASING the use of comprehensive insurance – i.e., covering the so-called “uninsured” – will reduce overall costs. Neither of these ideas stands up to cursory scrutiny.
In order to bring HEALTH CARE costs down, competition must be increased among health care providers, not insurers. In order to bring health care costs down, consumers must be re-connected to the actual cost and value of the care they’re paying for. The only way to do those things is to eliminate subsidies for group comprehensive insurance, ELIMINATE the ‘broker’ (insurance company) that is controlling the cost, and encourage consumers to use high-deductible, low-premium insurance to prevent “medical bankruptcy” at a nominal cost. Adding MORE insurance to the mix by forcing Taxpayers to cover the so-called “uninsured” is only guaranteed to make the problem much, much worse. If you doubt this, just look at what’s happened in Massachusetts since the ObamaCare Beta program was implemented.
“Mandatory insurance” and a “health czar” are SYMPTOMS of the problem currently being exploited by the socialists. You don’t cure a disease by merely treating the symptoms, as you well know. Rejecting those concepts won’t change anything. If we don’t address the CAUSE of skyrocketing health care costs, sooner or later a Congress or an administration is going to successfully exploit those rising costs to socialize medicine in America. When that happens, you can kiss what’s left of this Republic good-bye.
The reader who commented as “goy” might be interested in reading the following article, also by Dr. Hsieh:
“How the Freedom to Contract Protects Insurability” The Objective Standard, Fall 2009: Vol. 4, No. 3
http://www.theobjectivestandard.com/back-issues.asp
I can assure goy that Dr. Hsieh understands the difference between healthcare and health insurance; access v. coverage, etc. There’s just not room in every article to cover every variation and every possible angle.
Thanks Jared. My point was, as stated, that attention paid to ancillary issues like ‘mandatory insurance’ and ‘health czars’ is simply a distraction from the real problem: figuring out how to get health care COSTS back under control so that routine care is affordable again – negating the whole issue of “covering the so-called uninsured”.
Regardless what Dr. Hsieh does or does not know as expressed in articles that were not cited in this one, the fact remains that – as expressed in this article – health care and health care insurance are conflated. Dangerously so. The statement “[s]uch reforms could reduce insurance costs over 50% — making insurance available to millions who cannot currently afford it” completely misses the point, and conveys the dangerous notion that we should be working to make comprehensive group insurance more affordable. Such insurance is the biggest part of what got us to the current “crisis”. Increasing its use by making it (temporarily) more “affordable” will only exacerbate the problem in the long term.
Dr. H is correct. And as single payer or regulated and enforced insurance, it is all dependant on “force”, the same “force” George Washington warned us about when leaving office, we need to tame “the fire” by separating the government from the health industry..completely, no cracked open doors left to be pryed open later by the next set of left wing bandits.
Cedarhill;
I believe a more apt moniker is “Gauleiter” since socialism is the direction B-HO wants to take our country. Fight back folks! We need to remove this scourge to the Constitution or we lose something as a people.
So called health care reform is only another step in the collectivization of the US that began early in the 20th century. Those Americans who still believe in individual freedoms must face the reality that most of our countrymen are socialists seeking every increasing gifts from the state without the understanding of the inevitable end that must result. The possibility of reclaiming the country as the republic it was intended to be has long expired. The only rational choices now are how we separate ourselves from this monstrosity of a state. Patriotism towards the idea of the US keeps many in thrall who otherwise would have left long ago but the reality is so far removed that no allegiance is owed anymore.
The Obama admininstration’s 32 dictators are all an affront to the US Constitution. Great article Dr. Hsieh.
I hope that eventually there will be a new type of Republican with an actual spine to stand up to this kind of thing on principle. As angering as statism is, I have no hope Republicans will do anything but assist it along. They have got to stop choking individual rights via doing their gods work, and instead finally stand up for protecting the lives and freedom of actual persons in this life here and now. Until then we’ll just be served up Democrat vs. a sorry, fumbling Democrat-Fascist lite.
What I find very disturbing, and this administration takes full advantage of it, is that the Government (specifically the leftist Democrats) are our saviors from the evil capitalist bankers….etc. I would be willing to bet that almost every screwed up market, like health care, got screwed up in large and significant parts because of Government meddling, not from evil bankers, doctors, big pharma and so on. This seems totally opposite from the way the Founders thought of Government, Government was supposed to be feared, and suspected, that’s why we have all the checks and balances. So many people have bought into this “Government save me”, solution, and it is reinforced on the nightly MSM news. How many “here is this or that problem, now what’s the Government going to do about it” stories, are in the MSM? I have never, in my life, been so disheartened by the direction our country is going.
Thanks, Dr. Hsieh, for your eloquent analysis of yet another nail in our collective coffin called Obamacare.
When I ask people who are for socialized medicine what they have against paying for their own medicine, if the prices were reasonable, not one of them says they are against free market medicine, IF the prices are reasonable.
What they don’t know is what has caused the astronomical prices in medicine is the present lack of freedom in our medical care caused by government mandated and subsidized medicine. I.e., approx. 50% of US medical expenses are for Medicare, Medicaid, MediCal, “free” EMR visits and SOMEONE has to pay for all these freebies. The people footing the bill now are those with insurance, the insurance companies, and those with enough money to pay something. However, we are ALL paying in diminished services; doctor and nurse shortages due to relatively low pay for very long hours; high rates of doctor attrition due also to diminished control over patients due to government and insurance interference with doctor decisions; fewer hospitals due to low or negative profits, etc.
Freedom is not a nice extra, but an absolute necessity for both patient and doctors. Only with the freedom to think, to evaluate, to use your money where your judgment thinks it will do the most good for you medically, is decent, affordable medicine possible.
Having political and economic freedom to make the choices necessary to live a long and happy life, is a huge responsibility. A free society is not a society for children, but for full-grown, rational adults, and only rational adults. The government, with Obamacare, would make us all permanent children, forever wards of the state. In return, we’ll get cheap, not very good medicine, and not very often. What kind of a life one can live under that can be described in the same terms: cheap, not very good and not for very long.
I’ll take my chances with freedom and a rational morality that gives me a chance at a real life instead.
Haiti descends further into chaos, even now our aid not reaching Haitians, and the World hates us and suspects our motives.
@12. Roxanne A.: – Freedom is not a nice extra, but an absolute necessity for both patient and doctors. Only with the freedom to think, to evaluate, to use your money where your judgment thinks it will do the most good for you medically, is decent, affordable medicine possible.
Amen to that, Roxanne.
NO market can function adequately without consumer choice. The past four decades proves this beyond a doubt: consumer choice has been completely destroyed in the health care market through exactly the sort of mandated and subsidized elements you mention, and it’s the ONLY market that has experienced the skyrocketing costs we’ve seen in that sector.
One thing though, when you write, “The people footing the bill now are those with insurance, the insurance companies, and those with enough money to pay something,” I suggest you reconsider that middle element.
Insurance companies are definitely NOT footing the bill – any bill. They are making a steady profit while their employees enjoy extremely competitive wages along with some of the best benefit packages outside of any union, and their upper management tiers rake in million$. Those millions are ALL derived from member premiums – money that could otherwise be spent directly on health care. My first-hand experience working for health insurance companies here in New England is that they are absolutely awash in waste, bureaucratic ineptitude, underutilized human resources, exorbitantly paid armies of H1-B Visa holders, mountains of state-of-the-art technology and millions in fees paid to offshore companies who handle their customer service (companies who, because they are outside the U.S., are not subject to the legal restrictions of HIPAA legislation). Although their profit margins seems small (just like credit card companies’), insurance companies are an enormous part of the health care problem.
Oh, and speaking of rational morality (as opposed to adolescent morality), you might find this one interesting.
Thanks for the article Dr. Hsieh.
To echo Roxanne A’s thoughts, and to contradict goy’s claim that discussion of czars is a “distraction”, I’d suggest that your point fits a bigger picture. Any attempt to bypass the minds of individual citizens, which means bypassing their knowledge and personal values, is doomed to failure. Primarily because doing so thwarts each person’s ability to choose and achieve his own values — in the process grinding away at his independence, self-sufficiency and sense of personal responsibility. Secondarily because no one person, or cabal of people, can hold the knowledge of supply and demand (and all their inputs) necessary for an economy to function properly. Installing czars anywhere in the political landscape can therefore do nothing but accelerate the on-going corrosion of individual autonomy and of economic success we see all around us.
I agree that this is an excellent treatment and also agree with goy (#3) that the distinction between health care and health Insurance is absolutely fundamental. Under most health plans, deductibles are smallish and the consumer gets disconnected from and is usually totally unconcerned about the payer. Think about going on a shopping binge knowing that someone else will pay off the credit cards. Think you would be a smart shopper? Show any restraint at all? Make those vendors toe the line on price? Yeah sure, and before you know it you have $20 Q-tips. This is a recipe for ballooning demand and runaway costs but at least the private companies have incentive to try to keep some sanity in the medical care marketplace.
It is only going to get worse when government gets involved and we will have the added problem of uncontrollable fraud. If you don’t think so then consider that Medicare today loses $60 Billion per year to fraud. My mother worked as head nurse in an elderly home back in the 70’s. I remember her telling me how several doctors would come in almost every week, cut some toenails and bill the government for foot surgery. No one dared say anything and the government agency never “connected the dots”. Fraud is absolutely institutionalized in government run programs.
So it is inevitable that government’s direct involvement will require major tax increases or will have to steal from other public services until it can go on no longer. Then comes rationing and reduction of pay for medical workers – and that will drive down the availability and quality of services.
But no such rational analysis of the problem seems to matter to Obama and the Democrats. And liberals are for Obama care because they feel that inequities in results in a free society need to be smoothed out. It’s a spread the wealth thing. Any attempt at economic justification is total BS.
As a few have said here, we need to get back to the concept of insurance. Policies should only cover the more catastrophic things that befall us. There are many good and workable ideas along these lines that have been proposed including provision for covering poor and low income Americans. But the politicians don’t want anything reasonable to mess up the creation of a dependant majority because then there is no turning back.
Totally agreed–if there is an entity that needs “tempering” (or better yet *severe* reductions and limitations), it isn’t profit-making doctors or insurance companies, it’s the *GOVERNMENT*. The trend of the U.S. toward the totalitarian state is extremely disturbing.