The Affordable Health Care Choices Act

Health care costs are soaring. Health insurance is gradually becoming unaffordable. 30 million Americans can't get insurance, and another 17 million choose not. With as much as 17% of the US economy spent on medical care, why is the system failing? And will President Obama's proposed bill, The Affordable Health Care Choices Act (HR3200 and its equivalent bill before the Senate) succeed in guaranteeing health care to every American?

The health insurance industry lies at the heart of the issue. Touted as private, it is in fact crippled by government regulations. Imagine having to order everything on the menu each time you went to a restaurant. Such is the state of health insurance in the US today. Through what is known as Mandates, each state dictates what must be included in an insurance policy sold to its residents. The list of must-have-coverage is absurdly inclusive. Further, laws prohibit the purchase of insurance from out-of-state providers. Add to this legislations that require insurers to accept any group that applies for coverage and anyone in that group, regardless of health conditions or lifestyle choices, and insurance policies become equally expensive for the twenty-year-old health nut and the middle-aged, beer-swilling chain-smoker.

So what is HR3200 proposing to do about the problem of State Mandates? Introduce Federal Mandates. First, the Individual Mandate, which will make it illegal for individuals not to have health insurance. And second, the Employer Mandate, which will make it illegal for employers not to provide health insurance to their employees. Under this proposal, there is a danger that individuals will have to forgo buying food or other essentials just to avoid breaking the law, while employers might have to cut down on the number of employees they can afford to hire. Logic dictates that a problem created by lack of competition should be solved by reintroducing competition. A less sweeping law could achieve this by making it legal for individuals and employers to buy insurance across state lines. It will then be in each state's best interest to change their mandate laws so as to help insurance companies in their state be more competitive.

HR3200 also proposes a public option, namely insurance provided by the federal government. This is the model used by nations worldwide, such as Israel, Finland, UK, Ireland, Australia, Canada, Japan... the list is long. The US federal government already provides a public option to Americans over age 65, known as Medicare. But if the future success of President Obama's public option is to be measured by how well government has handled the Medicare option thus far (on which 40 million elderly Americans are dependant), then the outlook is grim. Medicare is expected to go bankrupt in 2019. Further, rates paid by Medicare to doctors and hospitals are so low they fail to cover costs, let alone provide a profit. The health care system has been able to offset these loses by shifting them to privately insured patients. But what will happen when a far larger portion of the population is insured under a Medicare-type policy?

The biggest threat to patients, however, will come as an unintended consequence of the public option. Though HR3200 does not make private insurance illegal, it will make it uncompetitive by taxing it. An individual may find himself taxed twice, once for buying private insurance, and once by having to pay higher income and state taxes to cover the cost of the public option. Such an example already exists with public education, when individuals who send their children to private schools not only pay private tuitions but are taxed to support public education.

There are other aspects of HR3200 which are likely to add problems rather than solve them, such as rationing of health care, pricing that is out of touch with the market, transfer of medical decisions from doctors to bureaucrats,and forced unionization of medical professionals.

The very rich or people who are well connected are not the one's HR3200 is trying to help. But will universal insurance actually translate to universal access to care? It never has before, not here in the US, where fewer and fewer doctors can afford to accept Medicare patients, nor in Canada, Israel, Ireland, Finland, Australia-and every other country whose government provides "free insurance". Invariably, access to care is actually diminished when the patients feel that the service is free. In fact, part of the reason health care costs have risen so much in the US is attributed to overuse by patients who never experience full costs but only minimal co-pays.

It is clear that the US health care system is in crisis. But HR3200 is too sweeping and has too many unintended consequences to solve the problem. Under it, the poor will have health insurance but access to care will become more scarce. Taxes will have to go up, as they have gone up all over the world in countries that implemented "free" health care, to the determent of their economies. A two-tier system invariably arises, in which a patient might wait 8 months to see a doctor through the public system, or pay the high cost of private access and see that same doctor the next day. Perhaps instead of one all-encompassing bill, small bills can target specific problems such as Tort Reform, permission to purchase insurance across state lines, expansion of health savings accounts, and better tax laws to support non profit delivery of medical care.

References:

1. Zinser, Lin, and Hsieh, Paul. Moral Health Care vs. "Universal Health Care". The Objective Standard, 2008. Vol 2, No. 4: 9-41.
2. Connelly, Michael. The Truth About the Health Care Bills. August 12, 2009. Retrieved from: http://michaelconnelly.viviti.com/entries/general/the-truth-about-the-health-care-bills
3. Doctors to Congress: "Stop Meddling in Medicine". An interview with Kathryn Serkes, Policy Director for the Association of Physicians and Surgeons. Retrieved from: http://video.newsmax.com/