Making the World Safe for "Health Insurance" Company Profits

The libertarian Cato Institute's Michael Tanner writes in the LAT yesterday that, gosh, kids, we don't need to get govt involved in health care, we just need to get the private insurers to clean up their act a little.

[W]hat exactly would a free-market approach to reform look like? Quite simply, it relies on those time-tested building blocks of marketplace efficiency: competition and choice.

There are two key components to any free-market healthcare reform. First, we need to move away from a system dominated by employer-provided health insurance and instead make health insurance personal and portable, controlled by the individual rather than government or an employer.

Employment-based insurance hides much of the true cost of healthcare to consumers, thereby encouraging overconsumption. It also limits consumer choice, because employers get the final say in what type of insurance a worker will receive. It means that people who don't receive insurance through work are put at a significant and costly disadvantage. And, of course, it means that if you lose your job, you are likely to end up uninsured.

So far so good. A vicious recession is not a good time to be tying your health care to having a job. And Tanner's little shot at employers is accurate, too: employers want cheap health insurance, not health insurance that works. In a private for-profit system like ours, you can't have both. In the run-amok private system as currently constituted, you often can't have either.

It's on the second component that Tanner's argument breaks down completely, requiring a belief in the ultimate good intentions of corporate pirates while at the same opening the gates to a corporate Wonderland of scheming, manipulation, raids, and organized, sanctioned theft.

The other part of effective healthcare reform involves increasing competition among both insurers and health providers. Current regulations establish monopolies and cartels in both industries. Today, for example, people can't purchase health insurance across state lines. And because different states have very different regulations and mandates, costs can vary widely depending on where you live.

And naturally, all those odious regulations would have to be removed that protect consumers. Too expensive.

New Jersey, for example, requires insurers to cover a wide range of procedures and types of care, including in-vitro fertilization, contraceptives, chiropodists and coverage of children until they reach age 25. Those mandated benefits aren't cheap. According to a 2007 analysis by the National Center for Policy Analysis, the cost of a standard health insurance policy for a healthy 25-year-old man averaged $5,580 in the state. A standard policy in Kentucky, which has far fewer mandates, would cost the same man only $960 per year.

Unfortunately, consumers are more or less held prisoner by their state's regulatory regime. It is illegal for that hypothetical New Jersey resident to buy the cheaper health insurance in Kentucky.

Of course, it wouldn't actually cover anything but yes, it would be cheap.

That's the problem with all the pro-profit advocates. Reality for less-than-millionaires isn't really very interesting to them, they don't know much about it, and they continue to have "faith" in a market that has given them very little reason for any tactic toward it other than healthy suspicion and a wary backing away. It has been for 10 years a market for vampires and jackals, zombies and werewolves; a market that ate the trusting alive and spit out their bones; a market that used every dirty trick in the book, many of them blatantly illegal, others catastrophically unethical, to scam consumers with promises of services it never intended to deliver.

Apparently Mr Tanner was holed up in his bunker for all that and missed it because he sees no reason why we can't just tweak things a little - say, stay out of the forest when the moon is full - and not have to worry about the werewolves. Would that it were so simple. It isn't, of course. The wolf fangs are out and hungry 24/7. They don't care what the moon is doing.

Those nasty old regulations are all that can keep the lock on the werewolves' cages but Mr Tanner thinks that constitutes cruelty to animals and he's all PETW (People for the Enlightened Treatment of Werewolves) about it.

I don't think so, Mr Tanner.

Comments

[Just An Australian]

Encourages overconsumption?

What a jerk

[Christian Prophet]

The problem is the government has been involved in health care for a long time via welfare programs, medicare, medicaid, and judicial decisions. Government involvement has totally screwed up the natural market for health care. See:
http://spirituallibertarian.blogspot.com/

[mick]

Australian: Yeah, that's one of the standard RWTP's. Like many of them, there's some truth to it but not enough to justify using it as an excuse to kill single-payer.

Prophet: "Govt has totally screwed up the natural market for health care"? How? And what "natural market" is that exactly? Medicare and Medicaid were created becausde insurance companies weren't interested in covering old poor people (too expensive, what with all their health problems and all; bad for the corporate bottom line) or young poor people (kids don't have jobs and can't pay; their parents might have jobs but so low-paying that they can't afford the premiums either and how does that help profits grow? It doesn't. Fuck em). So the govt did what a govt is supposed to do and stepped in so the millions of people the insurance companies didn't want to cover could get some kind of health care anyway. If that's "screwing up the natural market", it wasn't the govt who did it, it was your precious for-profit insurers who didn't like the idea of having to give health insurance to sick people. They only want well people. People who will pay in while taking very little out. Nothing has changed except dickheads like you blaming govt for one of the few things it has done in the past 40 years that we can be proud of.

Libertarians really need to get past the 8th grade before they open their mouths. Sheesh.