BEN RAY TODAY

As expected Representative Ben Ray Luján voted in favor of HR 3962 which passed in the House last night by a narrow margin of 220-215.

Today, I received an email from Luján’s office where he boasted of the achievement in passing this legislation. Quoting from the email,

The Affordable Health Care for America Act cuts long-term health care costs and reduces the deficit by $109 billion over the first ten years. It covers 96 percent of Americans while ensuring additional stability, lower costs, higher quality, and a greater choice of health plans. The legislation also includes a public option, which will increase choice and improve competition.

The CBO has estimated the cost of this bill to be over $1 trillion in the next ten years. If the government says it will be $1 trillion, I would conservatively estimate it to be more like $5 trillion. After all in 1965 the government said the total cost of Medicare would be $9 billion by 1990 and in reality it was $66 billion. The government has never had a social program that has came in on or under budget.

They claim this bill will lower costs and improve competition, the lower costs may actually come for the people eligible for the so called “public option” but it will be through government price-fixing (the government will arbitrarily decide on the price of services and providers will simply have to comply) which will cause costs to shift to the private sector magnifying the price of private insurance and initially hiding the true cost of the government plan. This will eventually force the private insurers out of business and absolutely decrease competition.

Another provision of this bill that Luján highlights is the restriction on private insurers to deny coverage for people with preexisting conditions. This will further restrict insurers’ ability to properly pool and allocate risk (see my last post for more on this), and once again these companies will be forced out of business and the only plan left will be provided (poorly) by the government.

This bill is a disaster for our health care, we can only hope that the Senate will act responsibly and prevent this bill (or a version of it) from becoming law.

Okay, I guess this subject can’t be avoided any longer on this blog.  Representative Luján appeared twice on the house floor in the last few weeks to demand that the House health care bill include a robust public option, and since it’s [the House bill] unveiling has issued a press release stating his support of this bill.  Therefore, one can only conclude that when this bill comes up for vote, Luján will vote in favor of the bill.

I’ve read some of the 1,990 pages of the bill and instead of getting bogged down in the minutiae of details I decided to comment more in general terms on the health care problems we face.  First of all, what I am about to say is not a popular statement, but it must be said.  Health care is not a right.  No person has a right to another persons service.  For instance, food (and water) is the most important part of sustaining ones health.  It’s a fact, more than we need flu shots, antibiotics, or CT scans, we need food.  Yet, no one claims they have a “right” to the services of a farmer.  We pay for that, just as we should pay for the services of health care professionals.

The fact that health care spending has been increasing as a percentage of GDP is undeniable, but there is a keen difference between health care spending and health care costs.  To illustrate this, consider the amount of spending as a percentage of GDP on flat-screen TV’s in the last 10 years, it has been steadily increasing, but as we know the costs of the TV’s have come down (notice there is currently little government involvement in the flat-screen TV market).  Now, I am not claiming that the cost of health care is decreasing, but to simply look to the percentage of GDP spent and make conclusions is in err.  Say we make the conclusion in our flat-screen TV example that spending is increasing out of control and therefore we place price controls on the consumers and businesses.  This would be terribly stupid but, this is in essence, what the government is planning to do with health care.  To call them caps, spending controls, or anything else is just semantics; these proposals are price controls pure and simple.  Price controls always lead to shortages and rationing and we are certainly heading for a similar path.  I could continue to criticize the current House bill ad infinitum, but instead I would like to turn to some options for real health care reform.

If Representaive Luján really understood how to fix our health care problems he could start by supporting the following ideas^*.  First, eliminate all governmental licensing requirements for all health care providers.  There would instantly be more doctors, nurses, hospitals, pharmacies, and medical training schools.  With an enormous increase in supply, the costs would naturally come down and a more innovative suite of services would be available on the market.  Competing accreditation services would appear in lue of the government licenses if the consumers deemed them necessary (look to ABET for engineering education or the Better Business Bureau for ideas).  Consumers would do their own research and not rely on a government standard of health service, this would drive enormous competition to the marketplace and costs would go down while services increased as a natural function of free markets (just like the research consumers do to determine which flat screen TV to purchase).  Second, eliminate all restrictions on the pharmaceutical industry and get rid of the Food and Drug Administration.  This would allow much needed drugs to come to market faster and reduce costs greatly.  Consumers would evaluate the risks of taking certain medications according to their assessment instead of the governments’.  The desire by the consumer to make these assessments as accurately as possible would place market pressure on manufactures to provide increasingly better product descriptions and guarantees.  Next, fully deregulate the health insurance industry.  Insurance implies the pooling of individual risk and implies that insurers pay more to some people than to others.  Insurance companies should be allowed to freely asses the risk categories of it’s customers and package services accordingly (they are currently heavily restricted by government on the extent they can do this, and even more so in the new bill).  For instance, I do not wish to pool my risk of getting lung cancer with a group of chain smokers.  If I could be pooled with only non-smokers and all of us insured against getting lung cancer, our premiums would be much lower than if the smokers were included in our group.  Auto insurers make practice of this all the time.  This is why a 16 year old male’s insurance premiums are much higher than a 50 year old female with no prior accidents.  The system of health insurance we currently have is more analogous to income redistribution than real insurance because the insurers are prevented from discriminating among various groups which have vastly different insurance risks.  This system benefits irresponsible actors and high-risk groups at the expense of responsible people and low-risk groups.  Finally, we should eliminate all subsidies to the sick.  This means Medicare and Medicaid.  Subsidies always create more of whats being subsidized (Do we subsidize corn in order to grow less of it?).  Subsidies for the sick promote irresponsibility and dependence.  If we were to eliminate them it would encourage individuals to live healthy lifestyles and to work for a living.

These ideas are definitely not popular or what’s being discussed by our lawmakers, but they are the only solution to real health care reform.

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^*Credit is respectfully given to Hans-Hermann Hoppe for the origination of these ideas in his essay A Four-Step Health-Care Solution, some of which has been taken abridged here and other parts expanded.

Ben Ray Luján has had a few speeches on the House floor recently, calling for the so called “public option” in the health care bill.  This has opened the door for some commentary on health care reform, but I have purposely been putting it off in an attempt to allow the Bill to take shape.  Well, it appears today it has.  Now I will need a few more days to sort through the 1,990 pages in this bill in order to put together some intelligent critism.  I’m sure however long I take will be longer than any House member takes to actually read it before voting in favor of it.