This is going to shock you guys, but the other day I was having an argument about Obamacare with a friend on Facebook. I know. I know. This is something that almost never happens.
In this argument, my conservative friend suggested that he would prefer the German mixed model of public/private insurance over a completely government-run insurance system like Single Payer. When I pointed out that that is what Obamacare is, and what the Supreme Court might destroy, he accused me of drinking the Kool-Aid. My friend is one of the conspiracy theorists who believes that Obamacare is a secret plan to kill insurance companies and install Single Payer healthcare. (How this works: the evil Democrats pass a law that mandates people buy insurance from private insurance companies. If people can’t afford it, they are given subsidies to help them buy the insurance from those private companies. Also, since insurance companies are forced to cover all customers despite pre-existing conditions, a special high risk pool is created to protect companies that are hit with particularly bad luck in high patient costs. Then something magical happens. Then we have Single Payer healthcare. If this is the way government “destroys” an industry, I so want them to “destroy” videogames.)
Anyway, after that exchange I asked my friend what his solution would be to the Ronald Reagan Free Rider problem if a) we can’t have Single Payer and b) we can’t have a mandate. He said that he isn’t qualified to answer but that the health insurance industry is just like any other industry and that if we get government out of it, the market would find the best solution.
Okay, first of all: no. And secondly: NO. Finally, no.
Healthcare is not just like any other industry, because the conditions that allow market forces to produce the best outcomes are often absent. Medical care relies on very specialized expertise that is beyond the reach of all but very few of the people participating in the system. When faced with a medical crisis, people don’t often have the ability to comparison shop for the best solution, nor do they necessarily have the expertise to adequately make the kinds of decisions that would effect the market for future customers. Part of why market forces work for most kinds of products/industries is that consumers are able to learn from their own experiences with products and make better-informed subsequent decisions. Kidney transplants, for example, don’t offer the same opportunity to apply lessons learned to the next kidney transplant service; they’re generally unique events in a person’s life.
Healthcare is also something that cannot always be anticipated. Young people sometimes get cancer, people suffer accidents, stuff happens. A relatively healthy person might live a full life, get hit by a bus at age 50 and die without ever incurring significant health care costs. Another might live to 90 and require regular medical treatment for his/her entire life, especially past 60. 80% of the costs are incurred by 20% of the patients, and there isn’t a good way to reliably predict who will be in the 20%. This is obviously why we have an insurance-based health payment system, whether it be private or public, in order to pool this unpredictable risk and share the costs among large groups of people.
Other industries rely on insurance as well, like homeowner’s insurance, car insurance, etc. And a conservative might object here that all industries are unique in their own way, but that doesn’t mean that government should get involved. But the health insurance industry differs from those industries in one very important and major way: you cannot opt out of participation of the health care industry. This is where Ronald Reagan comes in again. His 1986 EMTALA law means that everybody is a participant in the healthcare industry, which means that we all pay for people who are “uninsured.” What Obamacare seeks to do is change the way that we all pay for everyone’s health care, because like it or not, we are already paying for it, thanks to the Ronald Reagan Free Riders.
So, here we are. I’ve gotten some feedback from yesterday’s post from conservative friends about how I’m not being fair, but none of them have offered any kind of suggestion for how we can obtain universal coverage and deal with the Ronald Reagan Free Riders that doesn’t a) mandate purchasing insurance, or b) Single Payer. I still see no reason to change my hypothesis that the actual conservative position is that universal coverage is not their goal.