The health care system that predated Obamacare was already so distorted by government subsidies, regulations and tax incentives as to be quasi state-run. True reform would rip that government IV out of the nation’s arm altogether and encourage more competition, not less. True reform would remove the tax deductions handed to employers 60 years ago and give them to individuals instead. True reform would permit individuals to shop nationwide for the best plan and would permit companies to offer truly catastrophic plans for the young and healthy. True reform would create high-risk pools to provide for those with chronic conditions.
As the examples of the insurance industry and the corn growers demonstrate, it’s a mistake to rely on the business sector to promote free enterprise. Some businessmen do, but many are happy to engage in rent seeking from the state. Farmers, universities, banks, construction companies, green energy firms, car companies, the telecommunications industry — the list of supplicants for taxpayer subsidies is endless.
Republicans are perceived (and often see themselves) as the pro-business party. They should think of themselves of pro-consumer instead.
Still, Republicans do understand the basics of supply and demand better than Democrats, and many predicted the problems Obamacare is already experiencing. They understood, as Obama and his supporters apparently did not, that the laws of economics are not optional. You cannot extend health care to 30 or 40 or 50 million people (the number kept changing) who previously lacked it and bring down total health spending simultaneously. You cannot force insurance companies to accept all customers regardless of preexisting conditions and expect that premiums will not rise to cover the expense. Further, once people realize that insurance companies cannot reject them when they become sick, the incentive to purchase health insurance among the healthy population disappears. (The small fine for failure to buy insurance will not compensate.) You cannot mandate that employers with more than 40 full-time employees provide government approved insurance without causing employers to shift to part-time employees or decline to hire. You cannot impose a “Cadillac tax” without employers raising premiums or reducing their coverage.
The Democrats’ reform of the health care system is stumbling into a predictable and predicted morass. Democrats will inevitably conclude that this calls for even more government. Republicans should side with consumers.
Mona Charen is a syndicated columnist.