Why do we need Obamacare, the greatest expansion of government in almost fifty years? According to New York Times columnist Nicholas Kristof, tales like that of Richard Streeter, a 47-year-old truck driver, illustrate why. Kristof writes:
[Streeter’s] problem isn’t Obamacare, but a tumor in his colon that may kill him because Obamacare didn’t come quite soon enough.
Streeter had health insurance for decades, but beginning in 2008 his employer no longer offered it as an option. He says he tried to buy individual health insurance but, as a lifelong smoker in his late 40s, couldn’t find anything affordable — so he took a terrible chance and did without.
At the beginning of this year, Streeter began to notice blood in his bowel movements and discomfort in his rectum. Because he didn’t have health insurance, he put off going to the doctor and reassured himself it was just irritation from sitting too many hours.
This September, Streeter was finally diagnosed with advanced colon cancer. According to Kristof, there is “just one bright spot” for Streeter, who “is bracing for an arduous and impoverishing battle with the cancer”: Obamacare forbids insurers from turning him away and requires them to charge him no more than they would a healthy person.
My takeaway is the opposite of Kristof’s. Streeter’s tale of his health insurance nightmare speaks to why we need to remove government intervention in health care, not introduce more of it (in the form of Obamacare). I can think of at least two reasons why Streeter would have been better off had government not already been so entrenched in our health care system.
First, if the government were not manipulating his choices via tax policy, Streeter could have chosen to buy an individual health insurance policy all along, versus getting coverage through his employer. His employer’s decisions would then have had no impact on his coverage status, and he wouldn’t have suddenly found himself uninsured, needing to apply for individual coverage in his higher-risk (i.e., higher premium) state (given his age and lifestyle choices).
Second, if the government were not distorting actuarial practices and regulating the business of insurance more broadly, insurers would no doubt be able to offer policies at a range of price points, including lower-priced policies than they do today. People would no longer be required to subsidize the coverage of others, be it by forcing them to buy coverage for every service under the sun or by requiring insurers to price a customer’s policy higher than his risk profile justifies.
Obamacare doesn’t fix these problems. It only hides the destructive effects of previous regulation by forcing others to shoulder the burdens of the sick (this is the function, for example, of the individual mandate). The law will also create further problems for someone like Streeter. For example, by requiring insurers to accept less healthy customers at the same premium as healthier ones, Obamacare incentivizes insurers to avoid the former.
The proper solution is to undo the government controls that are causing the very real problems Streeter and many others face. This means freeing the health care market.