by Dr. Roy Cordato
Senior Economist, Emeritas
Lovers of socialized medicine are quick to point out that the United States is the only country in the developed world that doesn’t have some form of universal government run, i.e., single payer, health care system. While this may be true, the US system of health care payment and delivery does have one important and overriding feature in common with all of these other countries; it is dominated by state control and coercion, not free markets or freedom of choice for health care consumers. This has been the case for many years, not just since the advent of Obamacare.
At the present time, the "private" health insurance system in the US, which is the primary method of health care payment for about two-thirds of Americans, rests completely on government regulation and force. (It should be noted that the other third of the country is in fact covered by some form of single payer plan i.e., Medicaid, Medicare, and the VA — VA is single payer but is also socialized medicine, with hospitals that are government owned and doctors who are government employees.) People who do not wish to purchase health insurance face heavy fines, and presumably, if they refuse to pay, imprisonment, since failing to pay the fine is equivalent to not paying income tax. This coercion extends to employer provided health insurance, as employers are not only required to provide health insurance in their compensation packages, but employees are required to accept it rather than, for example, trade it off for a higher salary or other benefits.
The government approved health insurance plans that people are allowed to buy without paying the fine are also dominated by force. The government stipulates what must be covered, regardless of the needs of the health care consumer, how extensive the coverage must be, what the deductibles are, and more. As has been seen in the Hobby Lobby case and ongoing cases involving the Little Sisters of the Poor, Sister Mother Angelica’s Eternal Word Television Network, and other religious non-profits, these restrictions do not only infringe on our health care freedoms but restrict other freedoms, such as religious liberties once thought to be guaranteed by the First Amendment.
Of course, these restrictions are just the tip of the iceberg. FDA regulations in large part dictate what new drug therapies can be researched, developed, and brought to market, which in turn dictates the drugs to which consumers and doctors can have access. At the state level, particularly in North Carolina where these regulations are extremely onerous, there are certificate of need (CON) laws, which prevent medical care entrepreneurs from building not only new hospitals but nearly all other medical facilities. These range from free-standing out patient surgery centers to nursing homes. In fact these laws even coercively prevent existing medical facilities from doing simple things like adding to the number of beds on their premises or purchasing MRI equipment. All of this dramatically restricts consumer health care choices. In the John Locke Foundation’s First in Freedom Index of the 50 states, North Carolina ranks an embarrassing 46th in health care freedom. The state’s CON laws impinge on health care freedom so dramatically that, if they were abolished, North Carolina’s health care freedom ranking would rise to 25th.
Health care freedom would require completely reconsidering the fundamental principles that guide current policy, which see no contradiction in using force to achieve healthcare goals within the context of a free society.
With respect to health insurance, health care freedom dictates that all people should have the right to purchase any plan they want, or none at all. In other words, no one should be forced under penalty of fines and possible imprisonment upon refusal to pay those fines, to purchase insurance that they don’t want or they consider not to be worth the premiums. It also means that health insurance companies should be completely free to offer policies that meet consumers’ actual needs and to compete openly for customer business based on how they meet those needs.
Government should have no say in mandating what illnesses, conditions, or treatments insurance plans have to cover. Clearly, a gay couple or a 60 year old woman well past menopause would never choose to pay for contraception or pregnancy coverage in their insurance plans. If we had a system of health care freedom, they would not have to.
This also applies to health care itself. With health care freedom as the guiding principle, consumers would be free to arrange for any health care services they feel would best suit their needs. In North Carolina, this means that CON laws would have to be repealed. Existing and potential health care providers would be unleashed to use their entrepreneurial abilities in deciding what services and facilities best meet health care consumers’ demands.
The same is true for the role of the FDA in the production and distribution of drugs. At the present time, the FDA must approve both the safety and effectiveness of all pharmaceutical products. With health care freedom as a guiding principle, at most the role of the FDA would be to sign off on the safety of new drugs, leaving the determination of how effective and appropriate a drug or medical device is to doctors and their patients, possibly with the input of private certifying organizations as is the case in most of Europe. This is not particularly unusual. Under the current system, once a drug is approved as safe and effective for treating a particular condition, a doctor may prescribe and often does prescribe that drug as treatment for other conditions that were not part of the FDA approval process.
True Individual liberty requires that people have freedom with respect to their purchases of health care and health insurance. But these are only specific applications of a more general perspective on freedom, which is outlined in the Declaration of Independence. It is a system of natural liberty where all people are born with rights to life, liberty, and the pursuit of happiness. Obamacare advocates like to invoke the language of "rights" in discussing health care, but this language is a ruse. As noted in a previous newsletter, the Affordable Care Act in fact institutes a series of legal obligations backed by threats of force.
In this environment where health care coercion has become the norm, health care freedom is a radical idea. But it is the only approach to health care that is consistent with America’s founding principles and the God-given liberties that we all possess. Furthermore, as in all other cases where the power of consumer choice and entrepreneurship are unleashed and the power of government is restrained, it is an approach that will mean higher quality health care at lower cost for everyone.
Click here for the Economics & Environment Update archive.
You can unsubscribe to this and all future e-mails from the John Locke Foundation by clicking the "Manage Subscriptions" button at the top of this newsletter.