Monday, March 8, 2010

Health care reform?

Am I the only one who has noticed that the health care debate has nothing to do about health care? Rather it is a debate over insurance coverage. The democrats want to extend medical insurance to the 30 million uninsured - regardless of whether they actually want the insurance or not. Since roughly half of the uninsured could purchase insurance but choose to opt out, the democrats want to mandate it. Since insurance is a product, this is akin to the democrats mandating that all must purchase any other product, like Jelly Bellies. The reason why they want it mandated is that all the young people who currently opt out are needed to fund the subsidies embodied in the proposed legislation. It is almost too bad that beginning next year I will be in the government program, Medicare. If I were younger I would sue the government if such legislation passed. If the Constitution allows this taking of private property through confiscation of income to pay for a "good" then we are all in serious trouble.

It is also interesting to listen to all the rhetoric. At the president's summit it seemed that every democrat had some sob story about health care being denied by an insurance company. I was disappointed that the republicans did not counter with sob stories about seniors being denied by Medicare or some veteran denied a drug by the VA. Indeed, although the numbers are dated, in 2008 Medicare had higher denial rates than an private insurer. Of course that is probably because Medicare's patients are older, but that makes the case even more compelling.

Also what about those dramatic increases in health premiums that the president is constantly railing about? I thought that since states regulated insurance, that they had rate commissions to approve or reject rate increases. It seems that the rate increase often cited as outrageous was approved by the rate commission in California! So consider this: the reason why insurance is so expensive is because states refuse to allow the purchase of insurance across state lines which limits competition. It is ironic that the main problems cited with insurance are due to (state) government regulation not because of private insurers being rapacious. As I have written before, if the government wants to lower the cost of insurance they should pass an act akin to Reigel-Neal which prohibited the states from prohibiting branching across state lines. Absent that, why haven't consumer groups started applying pressure to their state legislatures to enact laws to allow interstate commerce in insurance? It happened before in banking prior to Reigel-Neal and it could happen again once people really learned what the truth is.

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