Government Funded Health Care for All: Turning Our Health Care System Into the Post Office

The federal government’s “spin machine” is in high gear, and here is what we are being told about the federal government’s takeover of the health care system:

• It will be paid for by savings in the health care system and modest tax increases on the wealthy;
• It will not increase the cost of health care;
• It will make health care available to everyone;
• It will improve the delivery of health care services to everyone;
• There are no losers from the program.

Let’s quickly answer each point.  

• By making health care cost-free to everyone, there will be huge increases in usage.  The models do not anticipate changes in people’s behavior that will result by price changes.  In the initial first two years, the projections may work out, just like the first several years of the social security program the models worked fine.  Over time, people adapt to take advantage of cost-free goods.  This entitlement program will require more and more money each year, and taxes on the wealthy will soon be taxes on the middle class to pay for the program.
• Adding 40 million people to the health care system without a proportionate increase in doctors and hospitals will increase the cost of medical care, or if the price is controlled by the government, then it will lead to shortages and rationing like in every country that has tried a national health service.  Also, behavior changes will occur over time that also increase the cost of care.  Individuals will not bear the full cost of their reckless behavior; the rest of society will subsidize poor health habits of people.
• Health care will be more available, although we will have to wait for it.  The system currently allocates health care by ability to pay through the price system.  The new system will allocate health care by time — that is, the ability to wait in line to see a physician or get a procedure — eventually, other rationing will take place because the system cannot serve everyone at once.
• There will be some expansion of health services unless the government does not reimburse for the costs, in which case it will be the same facilities for a greater number of people.  It will be like visiting the post office on April 15 — many people wanting service with the same number of windows to serve customers.  Delivery will be to many more people but allocated by time rather than by price.
•  The winners will be private clinics in the U.S., Mexico, and Canada.  A second, private, cash-only health care system will emerge to allow wealthy individuals to buy their care outside the public system.  If the federal government by law prohibits such a system, it will emerge right over the border in Mexico and Canada to serve U.S. citizens paying cash for care.  Everyone else will wait for care in the public system.  Private insurance companies will eventually leave the market unable to compete with the free government option.   The losers will be everyone who has a choice today in selecting their insurance or payment options.  The winners will be a new army of federal bureaucrats who will have lifetime employment working in the new Fannie Mae and Freddie Mac for health care financing. 

A better solution would be to eliminate all tax benefits for health care benefits and return to a cash-based system of paying for care.  This would make health care like any other good and would require individuals to take responsibility for their health decisions like smoking, drinking, getting pregnant, taking drugs, etc.  Individuals could also buy insurance for catastrophic health issues.  Those in need who could not pay for care — and the system treats these individuals and illegal immigrants currently at emergency rooms across the country — could avail themselves of charity clinics staffed by physicians volunteering their time at free clinics.  This is the way things used to be before the government began funding health care in earnest in the last 1960’s.  The solution is not more government, but less.