Ok, so this is my promised response to Greenstate’s question. That full question will appear below in bolded block quotes (non-bolded block quotes are from other sources). As I said before, I typically prefer to reblog for agreement instead of disagreement, so my intention here isn’t to start a massive reblogging argument, but rather to just answer a question with a presentation of a libertarian alternative to universal health care. There may be other alternatives which libertarians would also support; it seems unlikely that the case I make here will be amenable to all libertarians everywhere. Greenstate also addressed the original question to conservatives, for whom I don’t claim to speak at all. Anyway, here we go…
do libertarians/conservatives believe that it is ok for private insurance companies to deny people based on preexisting conditions, drop people when they get sick, or refuse to pay for life-saving treatment? and if so, why is that their belief? why is this kind of treatment ok? government aside, why would we say that the only healthcare available is entitled to not actually deliver on the promises that they make?
There are a whole lot of questions in the segment, so hopefully I can be clear. Let’s resort to bullet points:
- Is it ok for insurance companies to deny people insurance because they have preexisting conditions? I think most libertarians would be with me when I answer with a personally qualified “yes.” Insurance companies are a business, and, like other businesses, they exist primarily to make a profit. So it’s understandable if, from a business perspective, they would not wish to work with unprofitable clients. That isn’t to say that libertarians don’t value people, want them to go without health care if they can’t afford it, or would run their own insurance companies that way if they owned them. It’s simply recognizing that it is not in the insurance company’s interest to accept clients with preexisting conditions — or at least not to accept them at the same rates they’d give everyone else. Perhaps unfortunately, most people don’t get into the insurance business to be humanitarians; they do it to make a profit. If they were there to help people, they’d probably start a nonprofit or charitable organization.
I’m going to take a quick break from the bullets to include a quote that theonlyplfmat used in his response to Greenstate’s question, which I think is applicable here [emphasis added is mine]:
All of the actors in health care—from doctors to insurers to pharmaceutical companies—work in a heavily regulated, massively subsidized industry full of structural distortions. They all want to serve patients well. But they also all behave rationally in response to the economic incentives those distortions create. Accidentally, but relentlessly, America has built a health-care system with incentives that inexorably generate terrible and perverse results. Incentives that emphasize health care over any other aspect of health and well-being. That emphasize treatment over prevention. That disguise true costs. That favor complexity, and discourage transparent competition based on price or quality. That result in a generational pyramid scheme rather than sustainable financing.
Also, for a more detailed treatment of the preexisting conditions question, check out this reply to Greenstate’s question from coeus. I’ll come back to this later — a key part of my post, you’ll no doubt notice, is its intent to shed light on just how much government already is involved in health care and how much it has contributed to its current failure. Now, moving on… Ok, next section: it seems like everyone can agree that the current system is not working. this much we know. but what is the libertarian alternative to our present system? Very true. The difference, of course, is where we place the blame for the current failure. For instance, I was honestly amazed to learn a couple years ago that HMOs are government-mandated — here be monsters, indeed, but they are not free market monsters: We should remember that HMOs did not arise because of free-market demand, but rather because of government mandates. The HMO Act of 1973 requires all but the smallest employers to offer their employees HMO coverage, and the tax code allows businesses — but not individuals — to deduct the cost of health insurance premiums. The result is the illogical coupling of employment and health insurance, which often leaves the unemployed without needed catastrophic coverage. While many in Congress are happy to criticize HMOs today, the public never hears how the present system was imposed upon the American people by federal law. As usual, government intervention in the private market failed to deliver the promised benefits and caused unintended consequences, but Congress never blames itself for the problems created by bad laws. Instead, we are told more government — in the form of “universal coverage” — is the answer. But government already is involved in roughly two-thirds of all health care spending, through Medicare, Medicaid, and other programs. So next: libertarians want less regulation, but without regulation, how do we stop private insurance companies from killing people? In college, one of my favorite classes was logic. My (communo-anarchist) roommate and I both took it, and we seriously spent the whole semester pointing out informal fallacies in each and every conversations possible. So please don’t take this as rudeness, but…that question is fallacious on a couple counts: petitio principii (or begging the question) and also false dilemma. It’s true that libertarians don’t want government regulation of the economy, but it’s not true that 1. all regulation is governmental, 2. unregulated insurance companies always kill people, and 3. there are only two options: government regulations or mass killings by insurance companies. One option for cleaning up the health care system is private regulation. We have some of this already — private licensing organizations, for instance, for medical professionals. We might similarly have private consumer advocate and watchdog groups giving “licenses” or seals of approval to insurance companies they’ve found to be reasonable, honest, and charitably inclined. I’m sure some of this already exists. and i’m not asking to be an asshole. i am really truly interested as to what the libertarian alternative is. what we have now is private insurance companies competing with one another, but they don’t keep their prices down. This paragraph is one reason why I put in that big block quote about the history of HMOs earlier. We have a lot of stuff going on in the health care industry right now, but one thing we definitely don’t have is “private insurance companies competing with one another”: Contrary to the claims of many advocates of increased government regulation of health care, rising costs and red tape do not represent market failure. Rather, they represent the failure of government policies that have destroyed the health care market. It’s time to rethink the whole system of HMOs and managed care. This entire unnecessary level of corporatism rakes off profits and worsens the quality of care. But HMOs did not arise in the free market; they are creatures of government interference in health care dating to the 1970s. These non-market institutions have gained control over medical care through collusion between organized medicine, politicians, and drug companies, in an effort to move America toward “free” universal health care. One big problem arises from the 1974 ERISA law, which grants tax benefits to employers for providing health care, while not allowing similar incentives for individuals. This results in the illogical coupling between employment and health insurance. As such, government removed the market incentive for health insurance companies to cater to the actual health-care consumer. As a greater amount of government and corporate money has been used to pay medical bills, costs have risen artificially out of the range of most individuals. Only true competition assures that the consumer gets the best deal at the best price possible by putting pressure on the providers. Patients are better served by having options and choices, not new federal bureaucracies and limitations on legal remedies. Such choices and options will arrive only when we unravel the HMO web rooted in old laws, and change the tax code to allow individual Americans to fully deduct all healthcare costs from their taxes, as employers can. As government bureaucracy continues to give preferences and protections to HMOs and trial lawyers, it will be the patients who lose, despite the glowing rhetoric from the special interests in Washington. Patients will pay ever rising prices and receive declining care while doctors continue to leave the profession in droves. Right-libertarians make a mistake, I think, when we haphazardly defend big business and conflate that with defense of the free market. Sure, there might be big business in a free market, but that simply isn’t what we have today. Indeed, defending big business today often means defending a product of gross corporatism funded on the lower or middle class taxpayer’s unwilling dime. As you noted, we all agree the present system is broken. But it isn’t broken because the free market has run wild and failed. As mentioned above, “government already is involved in roughly two-thirds of all health care spending, through Medicare, Medicaid, and other programs.” Even if we only look at the health care spending for which government is directly responsible (as opposed to “involved in”), it’s still at or approaching a solid half of the industry: In short, it’s inaccurate at best to say that we have a free health care market. So next: forget healthcare reform for a moment. years ago, before obama was even president, my mother’s premium was raised to be $2,000 a month when she got sick. her medication was $1,000 a month. how do we keep companies from doing this? who do we hold accountable? if there are no laws against these practices, how do we make sure that these companies are not exploiting our illness? and what about people who are not offered insurance through their employer [like most people in the service industry] and don’t make enough money to cover it themselves? how do we keep each other healthy? The personal aspect of it is, of course, exactly what makes health care such a tricky and touchy issue. And I completely understand how it can seem heartless to simply say “the free market will take care of it” in situations like the one you’ve described. I mean, it’s real people we’re talking about — in this case your mother. This isn’t something to be treated casually, and I have a real dislike for the flippancy with which some on the right have approached this matter. That said, let me make a couple final comments in this absolutely giant post (sorrrry…I’m a terrible over-writer). First, a central issue here is our view of the basic intentions of our fellow humans. It may seem simplistic, but seriously: If you don’t trust private (well, in our present situation, kind of private) health insurance companies, why do you trust government health care providers? At least if a health insurance company breaks its contract or treats you unfairly or fraudulently, you can take them to court. If they just suck in general but aren’t actually criminal, you can search for a new company or charity. But if the government is your provider, and it sucks or screws you over, what do you do? To whom do you turn? How do you opt out? Even if it’s not the only legal provider, if the government is providing (sucky) care for free, what motivation would companies have to provide good care in a low price range? Their market would essentially be gone. Second and (hopefully) finally, I don’t claim to know exactly what needs to be done to fix our health care system. Obviously I can lay out a general plan, but I can’t pretend to understand all the exact details. Nonetheless, here are a few concrete suggestions Ron Paul has made which would be a good start, if only a start: HR 3075 provides truly comprehensive health care reform by allowing families to claim a tax credit for the rising cost of health insurance premiums. With many families now spending close to $1000 or even more for their monthly premiums, they need real tax relief — including a dollar-for-dollar credit for every cent they spend on health care premiums — to make medical care more affordable. HR 3076 is specifically designed to address the medical malpractice crisis that threatens to drive thousands of American doctors — especially obstetricians — out of business. The bill provides a dollar-for-dollar tax credit that permits consumers to purchase “negative outcomes” insurance prior to undergoing surgery or other serious medical treatments. Negative outcomes insurance is a novel approach that guarantees those harmed receive fair compensation, while reducing the burden of costly malpractice litigation on the health care system. Patients receive this insurance payout without having to endure lengthy lawsuits, and without having to give away a large portion of their award to a trial lawyer. This also drastically reduces the costs imposed on physicians and hospitals by malpractice litigation. Under HR 3076, individuals can purchase negative outcomes insurance at essentially no cost. HR 3077 makes it more affordable for parents to provide health care for their children. It creates a $500 per child tax credit for medical expenses and prescription drugs that are not reimbursed by insurance. It also creates a $3,000 tax credit for dependent children with terminal illnesses, cancer, or disabilities. Parents who are struggling to pay for their children’s medical care, especially when those children have serious health problems or special needs, need every extra dollar. HR 3078 is commonsense, compassionate legislation for those suffering from cancer or other terminal illnesses. The sad reality is that many patients battling serious illnesses will never collect Social Security benefits — yet they continue to pay into the Social Security system. When facing a medical crisis, those patients need every extra dollar to pay for medical care, travel, and family matters. HR 3078 waives the employee portion of Social Security payroll taxes (or self-employment taxes) for individuals with documented serious illnesses or cancer. It also suspends Social Security taxes for primary caregivers with a sick spouse or child. There is no justification or excuse for collecting Social Security taxes from sick individuals who literally are fighting for their lives. We should also take deregulatory measures like removing the ban on selling insurance across state lines and getting rid of the FDA’s bedfellow involvement in the prescription drug industry. Obviously, no matter what route we take to attempt to clean up the mess we’ve got now, there will be no immediate solutions. But I and other libertarians most basically argue that if we begin to move in the direction of more freedom and less government, we’ll eventually — though gradually, and perhaps very gradually — see matters improve. P.S. This is already insanely long, so I’m not going to quote it all here, but you can read more reasons why I can’t support universal health care (as opposed to what the libertarian alternative might be, which is what I’ve addressed here) here.
