Universal Health Fundamentally Flawed

Published: Thu 19 Nov 2009

Donald Chase - Editorial Writer

In the upcoming weeks, Congress will try to cobble together a health care reform bill derived from proposals created in various Senate and House committees. The final draft of the bill will probably require most Americans to purchase health insurance, extend federal funds to pay for the cost of coverage, and prohibit the denial of medical coverage on the basis of preexisting conditions. The legislation may also include government-run health insurance, the so-called "public option," that would compete with private health insurers.

The presumption underlying this bill is that government-sponsored health insurance should expand to offer coverage to the uninsured. This presumption, however, is incorrect. The government should not offer health insurance subsidies to the poor, the elderly, the uninsured, or anybody else, nor should it regulate the health insurance market.

The subsidization of health insurance will mean that physicians and patients are insulated from the true cost of health care, which causes them to use too much of it, typically in the form of superfluous tests or other procedures whose value is questionable at best. This increased demand for health care combined with technological advances means burgeoning deficits, deficits that the government must deal with by reducing reimbursements to health care providers or rationing medical care. The result is a stifling of innovation and a host of new inequities to contend with. Moreover, the taxes requisite to pay for health care subsidies will impede the growth of the economy.

President Obama and Congressional Democrats wish to cover the uninsured because health insurance is very costly. Without the government's intervention, many Americans would not have the means to afford medical insurance. This argument, however, conflates two separate issues: whether the government should assist the poor, and how it should do so. If Americans want everyone in the U.S. to have medical coverage, the obvious answer is to provide the poor with enough money to buy their own policies. The government's assistance of the poor doesn't necessitate that it pay for certain goods.

The other issue at hand is health insurance companies' practice of setting higher premiums for policyholders who are unhealthy. The health care reform bill basically asks the question whether the government, or society as a whole, should reimburse people who have higher medical insurance premiums because of their poor health.

The answer to this question is a resounding no. Proponents of this bad-health compensation scheme argue that society must insure people against the misfortune of having poor genetics out of basic fairness. However, a plethora of variations in health status results from behavior, not genetics, such as heart disease from inactivity and overeating, cancer from tobacco use, and cirrhosis of the liver from alcohol abuse. If the government must compensate people for variations in health status, it either rewards or possibly even promotes unhealthy lifestyles.

Clearly, guaranteeing health insurance to every member of society is prohibitively expensive and would make the economy grossly inefficient. A more plausible alternative would be for the government to offer an economic safety net for the poor and allow them to buy some medical coverage on their own. The government may also offer health insurance vouchers to the poorest groups in the country.

What is obvious is that Congress' existing solution will hinder, not help, health care in America. If the health care reform bill passes, health care expenses will explode, the quality of care will deteriorate, and we as a nation will be worse off than we ever were before.