If the congress had created a nationalized healthcare system paid for through taxes, much like they did with medicare and social security etc., the supreme court would likely not be ruling on its constitutionality. When congress tried to pull a fast-one, and straddle the line between a nationalized healthcare system and a private healthcare system and to play games with the funding, they created a mess and put themselves in this position.
I would contend a nationalized healthcare system would be preferable to this mess. The only reason insurance companies can be profitable is because the cost of health insurance exceeds the cost of healthcare when amortized over large population groups. This is also why we have such debate over this "individual mandate". What this means to me is that it would grossly inefficient to attempt to purchase healthcare for every person in the United States vs simply paying for their healthcare. This is the same argument over the former "hillarycare". Why would you buy insurance for people rather than just pay for it directly?
While I'm not a fan of nationalized healthcare, and there were other solutions to the various problems of rising healthcare costs, nationalized healthcare would be cheaper. Or, even cheaper yet, institute proper insurance reforms and open up competition and keep the system largely as is. Those that can afford it, with employer subsidy etc. buy health insurance, those that can't or won't, show up at the hospital and get healthcare paid for by the government. Its still cheaper even though they may not get as good or thorough care.
Having recently been laid off, I was forced to decide whether to use continuation coverage at a cost of over $900/month (unemployment only pays about $1600/mo no matter how much I paid into it for 30 years) or to go without. I chose to pay for the continuation coverage and instead drop Cable TV services, reduce my cell phone bill, and reduce/eliminate as many other expenses as I could. Its a sucky choice to have to make, but it is still a choice.
We like to cry about the poor in this country but you'll find that while I have to pay for my cell phone and cable tv, there are subsidies for the poor. there are school lunch subsidies, food stamp subsidies, housing subsidies, and endless list of ways in which those above a certain income (even slightly) are paying dearly to support those below that rather arbitrary line. For my kids to participate in various school events, I had to pay fees. Band fees, bus fees, athletic fees... in addition to property taxes and the never ending flow of school bonds that are not being paid for by those below this line. That redistribution devalues the worth of my labor and artificially inflates the value of others and this effect magnifies as the subsidies artificially increase demand and cause the prices to rise. If anything, these attempts to "narrow the gap" are really devaluing the middle-class as these effects are a much larger proportion of their income and this does nothing to reduce or eliminate any gap between rich and poor. You can almost plot a exponential curve that you have to get over.
If you want to see the effect of subsidies, look at the cost of solar panels before and after government subsidies started? Green cars? How about your refrigerator? It changes the supply/demand equation and forces prices up to absorb the "free money". This is why it is so hard to get rid of a subsidy once in place. It would take awhile before the economy adjusted again and quite possibly put a lot of people out of business suddenly. How about lets not do the subsidy thing to start with since we know what it leads to?
Thursday, April 5, 2012
On the Healthcare Mess...
Reader Larry E. weighs in (I quote his email to me in its entirety):
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