Government healthcare in America – part 4
I discussed in Parts 1, 2, and 3 of this post how many of the problems in our health care system are the result of the dominance of third-party comprehensive insurance—a dominance which has arisen from decades of government interventions favoring this kind of insurance. But as these interventions are not new, neither are the problems we are presently facing. On the contrary, our government has been attempting to solve our health care problems for as long as it has been creating them—and time and again these “solutions” have left our health care system worse off.
In recent decades, for instance, state governments have increasingly looked at insurance mandates as a means of expanding coverage to groups that have difficulty obtaining it. Broadly, mandates are requirements—backed by government force—that insurers cover specific medical expenses (e.g., chiropractors, treatment for lyme disease) or patient populations (e.g., continuing coverage for laid-off employees). Mandates are an extremely myopic political tool: they force insurers into a money-losing endeavor, who respond by increasing insurance premiums or decreasing coverage in another area—creating another problem for politicians to solve by passing more mandates.
Unfortunately, mandates have proven irresistible to politicians, who disingenuously portray themselves as righteous crusaders for the cause of a suffering group (who just happens to have a strong lobby), while blaming the lack of coverage on “greedy” insurance companies, one of their favorite political whipping-boys. With the detrimental effects of mandates hidden from view, a veritable mandate armada has descended upon the health insurance industry. The number of state mandates has steadily increased from 7 in 1965 to more than 2,100 today. Some states have imposed such an onerous slew of mandates that hordes of insurers have packed up and left the state, as for example, in Kentucky, Maine and Washington.
Among the hardest hit by mandates are the young and healthy who are either unemployed or in a job that does not provide health benefits. This is a low-income group that would benefit most from insurance that provided coverage only for catastrophic events and carried a high deductible and a low premium. In large part because of mandates, however, this type of insurance is virtually nonexistent. These individuals must purchase high-priced insurance that covers medical services which will likely never be used, or go uninsured, as many do.
We now face the perverted end result of mandates and other interventions having priced so many out of the market for health insurance: the idea that an “individual mandate” must be imposed to force the uninsured to buy government-chosen insurance regardless of what they judge to be in their best interest. And one of the biggest supporters of the individual mandate is the insurance companies. While this may seem ironic, this sort of thing is, as Ayn Rand observed, the routine order of business when government intervenes in the economy:
When government controls are introduced into a free economy, they create economic dislocations, hardships, and problems which, if the controls are not repealed, necessitate still further controls, which necessitate still further controls, etc. Thus a chain reaction is set up: the victimized groups seek redress by imposing controls on the profiteering groups, who retaliate in the same manner, on an ever widening scale. (“The Cold Civil War,” in The Ayn Rand Column)
The answer to the problems caused by mandates is the same as the answer to the problems caused by the other government interventions I’ve discussed in this series of posts. End them.
Image attribution: Wikipedia Commons