Muftic: If the free-market system ruled health care
July 11, 2017
One of the hardest to grasp arguments made by those who opposed the original Trumpcare Senate bill is that it did not go far enough . The Senate and House versions did not repeal the structure of Obamacare . Their argument: if you just let the free market work without regulation, then all premiums would decrease so all could afford insurance, or at least more could afford insurance. It is an appealing theory, but simply repealing Obamacare without a replacement or even the Senate version would not have restored the free market to health care because there are other barriers not touched by Congressional action.
Besides there is not a profit to be made if patients are unable to pay for their services or the product insurers sell is not worth the cost to consumers.
Remember what it was like before Obamacare was passed? An estimated 45,000 people died a year before Obamacare because they did not have health insurance per a Harvard study. The number one cause of foreclosure and bankruptcy was the inability to pay for health bills . By 2026 if the original Senate version were put into practice, the number of uninsured would be the same as it was before Obamacare.
Fundamental to a free market is that the business has to make a profit or it closes its doors. The private market does not make a profit serving those who cannot pay for insurance, or are known bad risks. For that reason, the least of these will always be left without insurance unless the paying are willing to shoulder charity care costs paid for by higher premiums or make up the losses in higher state, local , federal taxes .
Fundamental to a free market is that the business has to make a profit or it closes its doors. The private market does not make a profit serving those who cannot pay for insurance, or are known bad risks. For that reason, the least of these will always be left without insurance unless the paying are willing to shoulder charity care costs paid for by higher premiums or make up the losses in higher state, local , federal taxes.
The free market requires that consumers understand the fine print in insurance offerings and that they have a chance to make an informed , rational decision at or before the time they need insurance or care. That is a stretch when it comes to health insurance. It is extremely complicated, as even President Trump noted.
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In reality, most consumers never did or do have much of a choice. They get their insurance through their employers whose human resource departments give them limited choices of three plans. This would not change except the Senate bill drops the requirement that large employers even offer health insurance as a benefit.
For a free market to work in theory there must be competition. Unlike every other kind of business except baseball and insurance, it is illegal to fix prices and benefits. However health insurers are free to collude to fix prices and benefits with another company since they are exempted from federal anti- trust action.
When Obamacare was scored in 2009, the Congressional Budget Office noted that cross state insurance sales (you can buy insurance from another state's provider) would make insurance more affordable for a few million, a drop in the bucket. Without required benefits and standards, the cheaper, poorer coverage wins out. The Senate bill removed requirements and standards.
Also, all large insurers have affiliates in other states, you may also be met with an affiliate of that same company in your home state.