By Nathan Tucker
In the debate over Obamacare, Congressional Republicans are in complete agreement with Democrats that government must solve the “healthcare problem,” they just simply disagree as to the means. Unfortunately, in this as in many other areas, the party of the free market has shown little regard for its principles.
Speaker Boehner has argued that “we have better ideas on health care—lots of them. We have solutions, of course, for patients with pre-existing conditions and other challenges.” Representative Price has promised that Republicans will not end Obamacare’s “safeguards for young adults and children with pre-existing medical conditions.”
Majority Leader Cantor told college students that: “We too don’t want to accept any insurance company’s denial of someone and coverage for that person because he or she may have pre-existing condition.” Unfortunately, these views are also echoed by Senate Republicans.
Consequently, while elected Republicans may denounce Obamacare’s individual mandate, they have shown no qualms about imposing mandates on businesses to force them into contracts that they find financially objectionable. They forget that, in a free market, parties enter into contracts when both sides have something to gain from it. In contrast, when the contract is government mandated, one side always gains at the other’s loss.
Government regulation always costs producers something, and that cost is always passed on to consumers. It is, in essence, an indirect and hidden sales tax, much of it imposed by an unelected and barely accountable bureaucracy. The individual mandate, for instance, was necessary to fund coverage for preexisting conditions.
There is a reason insurance companies decline to take patients with preexisting conditions—the cost of covering them would be unaffordable. By forcing new, predominately healthy customers into the market, however, insurance companies now had sufficient premiums with which to cover those with preexisting conditions. The individual mandate was a tax, it was simply payable either by buying health insurance or paying the fine.
So without the individual mandate, how will Republicans reimburse insurance companies for covering preexisting conditions? If a coerced contract is not financially viable to the parties, than a third party is going to have to pay for it. When originally proposed, House Democrats had, typically, suggested the usual third party—”a surcharge on the wealthy.”
Republicans will likely not be so direct in their taxation. Instead, a popular solution already proposed is the creation of state-run high-risk pools for those with preexisting conditions. Such pools already exist in a number of states and, not surprisingly, always operate at a loss. In Iowa, for instance, premiums only cover one-third of the expenses, while “assessments” on insurance carriers cover the remaining costs. This “assessment,” of course, was passed on to consumers as an indirect tax in the form of higher premiums.
Elected Republicans also forget that every regulation has a disproportionally unforeseen and adverse reaction that will require yet further regulation to “correct.” It is a cycle that never ends and is excruciatingly difficult for a society to extradite itself from. In fact, many of the alleged defects in health care are the result of government policies in the first place.
For instance, it was because of wage controls during World War II that employers started offering untaxed health insurance as a fringe benefit to attract employees. This meant, however, that if a person lost or switched jobs, he often lost his insurance as well.
While a mere inconvenience for a healthy individual to find new insurance, those who had developed a medical history and preexisting conditions found new insurance too expensive, if they found a policy at all. However, if government stopped encouraging employment-based health insurance policies through the tax code, people would instead be able to buy their insurance on the open market and keep it, regardless of future employment.
Finally, elected Republicans too often forget that the free market is not “free” in the sense of getting something for nothing, but because it is the very essence of man’s unalienable right to liberty— the knowing and voluntary decisions of individuals as free moral agents over the use of their property and labor.
It is the voluntary production and exchange of goods and services operating by free competition without interference from the government or from monopolies. But with this freedom also comes responsibility for one’s own actions or inactions. It is not the responsibility of others to be forced to pay for your mistakes.
In the end, the solution, as always, is not more government, but less.
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