Friday, August 31, 2007

Orange County Register Editorial on Universal Health Care

The following is a reprint of an August 31, 2007, editorial form the Orange County Register:

Friday, August 31, 2007
Today's editorial: Insuring everyone with others' money
Letting the government order coverage for everyone will only raise prices.
An Orange County Register Editorial

Californians shouldn't be fooled into thinking government can make health insurance more affordable or more available by mandating it or taxing it.

People intuitively know how absurd it would be for government to force them to buy food for everyone. The demand for food would soar if everyone knew whatever they wanted to eat would be paid for by someone else. No one can afford to feed that appetite. Why, then, do people have a difficult time seeing the absurdity of government forcing people to pay for everyone's health care?

Democrats in the state Legislature and Republican Gov. Arnold Schwarzenegger want to force near-universal health care insurance onto Californians before the Legislature adjourns in mid-September. They would mandate it and force people to pay for it. Why would anyone think the effect would be any different than it would be for food?

Health care costs are rising, already pricing many people out of the market for insurance. Rising costs are partly due to expensive technological advances, and research and development. But the underlying cause is demand.

Think of demand as an expression of appetite, a desire that seeks to attain or possess. When people can get more at someone else's expense, their appetite increases. But when people must pay out of their own pocket, they curb their appetites and evaluate what they're paying for. They weigh what is to be gained against the cost. The government system is an invitation to overspend, or, worse, to have government decide what's necessary, rather than a patient, doctor or insurer.

Unfortunately, politicians are in the appetite-feeding business. They see people without health care insurance and offer to buy it for them – with someone else's money. The Democrat plan, Assembly Bill 8, would impose a 7.5 percent payroll tax on all employers. Gov. Schwarzenegger's plan would impose 2 percent tax on doctors and 4 percent taxes on hospitals and employers of 10 or more. Both plans merely shift costs to someone else. It's a prescription for wanting even more. While neither proposal precludes people from paying for procedures privately if they want them, they impose new costs, regardless of whether they are wanted.

In a way, insurance companies operate similarly, but on a voluntary basis. Everyone pays a premium, and from the proceeds people receive coverage for specified treatments. Ideally, people would keep costs low by buying only coverage they need. Young people less likely to be ill might buy less insurance. Others may opt for high deductibles to pay correspondingly lower premiums, insuring against catastrophes and paying smaller expenses out of pocket.

Government doesn't operate that way. To satisfy every appetite, government requires coverage that people may not need or want, rather than letting individuals make personal decisions. Insurance companies have pulled out of some states because of unprofitable, costly mandated coverage required by governments.

It's bad enough when government mandates the types and amounts of coverage that must be sold and purchased, driving up prices. It's worse when government forces employers to provide insurance or to pay into a fund for the government to provide it, as the current schemes in Sacramento would.

Rising health care costs are a problem. But never will everyone be able to afford every medical treatment or procedure. So, appetites must be curbed. Individuals can do that if they are allowed to exercise discipline in a private market. It will never happen if pandering politicians make arbitrary decisions to feed every appetite.

Government can make health care more affordable and accessible by getting out of the insurance business and by reducing mandates on those in the business. Unfortunately, the trend in Sacramento is going in the opposite direction.


John Pack
Low Cost Health Insurance

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