Obviously there is a lot of talk in the media about health care coverage for every American; with the basic premise being “health insurance” for everyone. Is health insurance for everyone really the solution though? Knowing people who have personally experienced the horrors of universal coverage as residents of countries with such coverage, and being an advocate for free-market solutions, I can’t put my support behind that as the answer. I also cannot support a governmental “competitor” in the market. This will eventually lead to universal care as any “competitor” that can subsidize its losses with tax dollars can undercut everyone until they put them right out of business, thus resulting in a single-payer system. What if the solution to affordable health care was really the complete opposite direction we are all looking now? What if the solution to affordable health care for everyone, was insurance for no one?
I can almost hear the sound of people scratching their heads as they wonder how no insurance is a solution so allow me to explain. Rather than explore the history of how we came to our current state of health care and insurance (there are already plenty of people who have done that, just google it if you’re curious), We’re going to look at some of the possible outcomes if we fundamentally changed the way we deal with health insurance and health care.
First, a dramatic dose of deregulation would need to occur that would no longer require businesses to provide health insurance for employees (including governmental employees) who work over 40 hours a week (this varies state to state with some states requiring as little as 20 hrs). This would result in tremendous savings for businesses who would then be able to expand, hire more employees, and pay higher wages. We could probably put a significant dent in our currently growing unemployment numbers, as new businesses are started with the cost of starting a business being significantly lower than what it currently is.
You’re probably still wondering what lowering costs for businesses by eliminating health insurance has to do with keeping health care affordable. This is the part that health insurance companies aren’t going to like very much because their profits will drop significantly with so few people being covered. Because health insurance companies will no longer have their tens of millions of “guaranteed” customers who work over 40 hours a week, they will be forced to lower their prices to a level at which people can afford insurance, though many may still choose not to purchase it as the lower number of insured people would also likely affect the affordability of doctors offices and hospitals (a catastrophic health insurance may be all that many families need).
Because doctors offices and hospitals would not be able to count on the “guaranteed” insured either, they would be forced to lower their prices to a level the market can support as well. So, instead of a doctors visit costing $100-$150, it would be nearer to the cost of a higher end co-pay. Instead of an aspirin costing $50 during a hospital stay, it might only cost 50-cents. In order to make this workable though, there would also need to be a significant amount of tort reform to keep fraudulent lawsuits out of courtrooms and malpractice insurance prices affordable for those in the health care industry.
The problem with the current plans that are being presented is that they try to control the cost of insurance instead of allowing the market to control the cost of care. Affordable health insurance isn’t really the answer (though I think this would bring that about as well). Unless we deregulate and allow the market to control the cost of health services, we will continue to see prices rise uncontrollably.
(I would be most appreciative of any feedback on this proposed solution be it positive or negative. I know we will likely never see this because there is too powerful of an insurance lobby in Washington and “less is more” is not the way government operates these days.)
After attending a Mark Schauer event hosted by Spring Arbor University today, I was able to press Mark Schauer (Democratic Congressman from Michigans 7th District) for an answer concerning him signing onto HR 1207. Congressman Schauer stated that while he has not become an official cosponsor as of yet, he will be tossing his hat into the ring shortly as soon as he finalizes some things with his staff. He also added that we as tax payers have a right to know what is happening with “our money.” While I am far from agreeing with Congressman Schauer on many things, a good deed cannot go unnoticed or unrewarded… Congressman Schauer - Good Job!
With all of the blaming of our current economic failures on capitalism and the free market (a false blame of course), this quote from Peter Schiff at the 2009 Henry Hazlitt Memorial Lecture is priceless…
“President Bush in one of his speeches said that, ‘Wall Street got drunk’ and he was right, they were drunk. So was main street, the whole country was drunk. But what he doesn’t point out is, ‘Where’d they get the alcohol?’ ‘Why were they drunk?’ Obviously Greenspan poured the alcohol. The Fed got everybody drunk. The government helped out with their moral hazards; the tax codes and all the incentives and disincentives they put in — all the various ways that they interfered with the free market, and removed the necessary balances that would have existed and would have kept all this from happening.”
If you’ve been around my blog for any length of time, you know I’m a fan of Peter Schiff. He’s got a very common sense approach to economics and he can put things in terms that most people can understand. It’s hard to laugh about such an economic catastrophe, but Peter does an excellent job leading us down the road of how we got here, and how it should have surprised no one, plus he does it in a humorous way. Remember, he’s the guy who was trying to warn people this was coming well before it got here. Meanwhile everyone was laughing at him. The full video is about an hour and 20 minutes long, but it is well worth the watch. Especially if you really want to see just how deep the rabbit hole goes.
This is a slightly different edit of a portion of footage I have posted before. It concludes with a brief 15 second commentary from me, and is for a video competition at http://www.stopspendingourfuture.org There is a $500 prize for the top 5 videos.
Many do not think of bankruptcy as something that is beautiful, but like many things, it all depends on how you look at it. Most would appear to view bankruptcy as nothing more than death of a company, and as such, see a conclusion of darkness and despair without hope. Certainly for the one declaring bankruptcy, it is an unpleasant experience, but there is hope for employees and consumers alike when a company declares bankruptcy. “Hope in death,” you ask? Of course, for there would be no resurrection without first having the death.
A perfect example of the beauty of bankruptcy can be found in the case of the Archway Cookie Company, which filed for Chapter 11 bankruptcy in October of this year. Two plants were closed, and employees found the prospects of financial turmoil to be more than a little disheartening. In a situation like this, all hope must be lost, and there is obviously no chance of Archway Cookies returning from the black abyss, right? Wrong.
North Carolina based Lance, Inc. purchased the assets and brand of Archway Cookies at auction for $30 million in December. Lance has already reopened one of the factories and has re-hired about 60 former Archway employees at their previous salaries. All current employees that Lance has re-hired, and the other former Archway employees that have yet to be re-hired, were given $1,500 Visa gift cards to help with bills and Christmas. Their plan is to steadily hire the rest of the former Archway employees as business grows and increased production goals need to be met. Lance, Inc. which already has a successful corporate business model, will likely create a more stable employment situation for all their employees, unlike the former leaders at Archway who received their just deserts from the free market. This situation is a perfect example of the beauty of bankruptcy.
The fear mongers of bankruptcy and the enemies of laissez-faire capitalism would have the public believe that if the U.S. auto industry goes under, it will cease to exist, and the grass will grow tall around decrepit facilities and factories riddled with graffiti. Nothing could be further from the truth however. Like Archway above, auto manufactures that declare bankruptcy will be bought out at rock bottom prices, restructuring will occur, and proper stewardship is likely to be exercised to produce a successful company that does not need to be sustained by tax dollars. This is the beauty of bankruptcy.
Today President-Elect Barack Obama introduced his economic team and talked a little about a coming stimulus package. Unofficial figures put the proposed plan somewhere between $500 billion and $1 trillion dollars. Obama says that the economists agree that a new stimulus package is necessary to turn the economy around. I’d like to know who the economists are that he’s talking to. It’s amazing that all of the economists agree. It sounds to me like he’s going to the sources who will give him the answers he wants to hear instead of getting the opinion of people who have a different point of view. That’s a pretty good recipe for failure.
