This is the third post in my series opposing Hillary Clinton’s candidacy. See the introduction in Part 1 here. Read my opposition to Trump here. Read why you should mathematically vote for a third party here.
Healthcare
Now we’re turning to a subject where there may be an unavoidable Fundamental Ideological Disagreement. Nonetheless, I think there may be some agreement that the current healthcare system has many problems.
In 2009, the Democrats had complete control of the presidency, the House, and even had a super-majority in the Senate. Their priority was healthcare reform: the American system was prohibitively expensive, spent too much money even when patients were covered, tied your healthcare to your job, denied coverage to people with preexisting conditions and others who could not pay, and did not properly align preventative care incentives. They took a fundamentally left-leaning, centralized, top-down approach to solving these problems. The Obama administration specifically stayed out of the legislative process allowing much of the law to be patched together through Congress. They solved some of the problems in the American health system (and those steps are to be commended), some they tried to solve, but didn’t, and some they ignored altogether. Ironically, for a piece of legislation often called the “Affordable Care Act”, one of the problems Obamacare largely didn’t touch was the lack of market forces and pricing pressures on healthcare, guaranteeing the price problem would worsen.
When it comes to allocating resources, incentivizing cost saving and innovation, and producing the best quality goods for the lowest possible prices, there is no better system than a competitive free market with unregulated prices. Sellers seek to provide the best product at the lowest cost so that buyers will want to purchase them. I’d hesitate to even call it a system, since, apart from pricing systems and private property, everything is driven by individuals making decisions, according to their own priorities and needs. Markets do have problems, but the biggest one is that poor people won’t have the money to get the product (i.e. healthcare) they need. Unfortunately, instead of just fixing that problem by giving government healthcare subsidies to the poor, Obamacare tried to solve all the problems of the entire healthcare system through legislation. Obama had an unprecedented opportunity to encourage both market reforms and increased coverage for the poor, but instead opted for the (politically easier) increased regulation on a system already heavily strained by bad rules.
Instead of making it easier to purchase healthcare as an individual, Obamacare cemented the relationship between employment and healthcare. Instead of allowing consumers and doctors to figure out some prices with high deductible insurance plans, Obamacare mandated many more items be specifically covered by insurance plans, thus hiding their costs from patients. Instead of allowing insurance and consumers to follow their own incentives to promote preventive care, Obamacare mandates one-size fits all preventative care regulations which encode waste into the system. For more critiques of the system, check out this review in the Cato Journal.
The result is a system that solved the problem of coverage for the poor and people with preexisting conditions, but did not fundamentally solve the lack of market pricing and bad incentives. The mandates on insurance companies and hospitals (besides creating waste) increased the cost of providing care. The increased cost was supposed to be alleviated by subsidies and more young people entering the system, but the costs have been higher than expected and thus fewer people have signed up than had hoped. Perhaps more subsidies would get more people to sign up, but that doesn’t really solve the fundamental issues, just puts the burden of cost onto the taxpayer instead of healthy consumers. As a result of a lack of healthy young people in the system, insurance companies are raising premiums, despite downsloping demand curves (you drop prices to bring people in, not raise them). Clearly, the problems will only continue, and we’re stuck in a political situation where some parts of Obamacare are popular and now can’t be politically taken back, despite them being unsustainable.
Hillary Clinton wants to keep much of this situation intact. This is a terrible policy. We need real market reforms or this cost growth will continue. This isn’t even to suggest that an insurance mandate would be bad policy, or that the poor shouldn’t be able to get healthcare subsidies; but if there is no price competition, no ability for consumers to choose their healthcare provider, then there are no ramifications for patient or doctor’s actions that are inefficient or unnecessary. The costs are just socialized by the system and the problems never fixed. And it’s not like we are out of ideas for fixing the healthcare system: ending healthcare ties to your employer, allowing for more widespread use of HSAs, scaling, split benefits, and reforming scope of practice laws are just some of those. Over the last 15 years, American middle class wages haven’t improved much. Yet healthcare costs (and spending as a part of GDP) has gone way up. Perhaps if these costs were better controlled (and not paid by employers), more of the productivity gains would return to middle class incomes. But we’ll never find out when Hillary is president.
- Part 1: The Rule of Law
- Part 2: Foreign Policy and Trade
- Part 4: Fiscal Policy and Taxation
- Part 5: Government Power and Criminal Justice
Picture Credit: Gage Skidmore, licensed under CC BY-SA-2.0