The following article originally was published September 14 by Grand Junction’s Free Press.
Restore free market to address pre-existing conditions
by Linn and Ari Armstrong
Barack Obama’s most compelling examples of problems in health care involve insurers dropping coverage of people once they develop health problems. A related issue is the trouble some have in getting new insurance after they develop health conditions.
We agree that these problems of pre-existing conditions are serious and provide a compelling reason to reform health insurance.
However, Obama is totally wrong about the solution. The problem of pre-existing conditions is a consequence of decades of political controls of medicine. The solution is to roll back those controls and restore a free market, not introduce more controls and the worse consequences they will inevitably breed.
Obama and many others like to pretend that today’s health insurance operates in a free market. It does not. Federal and state politicians have seriously undermined the competitiveness of insurance through gross violations of the contract rights of insurers and their customers.
Through tax distortions, federal politicians have driven most Americans into expensive, non-portable insurance funded through employers. Lose your job, lose your insurance.
Moreover, employer-paid insurance operates more like pre-paid health care than real insurance, again because of the tax distortion. Such “insurance” tends to cover routine, low-cost care but increasingly falls down when it comes to expensive emergencies.
By contrast, real insurance in a free market would tend to cover unexpected emergencies and leave routine care for direct payment, thereby keeping premiums much lower than what most pay now.
A major consequence of federally promoted, employer-paid insurance is to create problems of pre-existing conditions. If somebody gets sick and can no longer work, the person also loses health insurance and probably can’t find another provider.
Politicians continually subject health insurance to changing controls, different from state to state. This effectively prevents insurance companies from offering long-term contracts, because insurers cannot know what political controls they’ll have to deal with down the road. It also reduces insurance competitiveness, as a policy issued in one state is not valid in another.
Another way that politicians undermine competitive insurance is to outlaw insurance options that politicians and bureaucrats don’t happen to like. In his article “How Freedom to Contract Protects Insurability,” Dr. Paul Hsieh points out that political controls effectively prevent organizations such as church ministries from creating insurance.
“The only thing preventing individuals from creating their own contractually binding risk pools today is the government,” Hsieh writes.
Yet, ignoring all the ways that politicians harm those with pre-existing conditions, Obama pretends that the fundamental problem is insurance profits.
In a free market, profit means that customers happily pay for some good or service. It is only outside of that market context that profit is bad. For example, a Mafia boss might “profit” by killing people, or a politician might “profit” by doing favors for special interests.
The fundamental issue is not profit versus non-profit, but freedom versus force. The problem with insurance companies is not that they seek to make a profit, but that they must operate as de facto agents of political overseers who call the shots.
On a truly free market, in which insurers and their customers were free from today’s political controls, people would tend to buy insurance directly, rather than get stuck with the few non-portable plans their employer chooses for them.
In a free market, insurers would be free to offer more plans to more people, and consumers would be free to shop around, regardless of state boundaries. Politicians would no longer coddle insurers with protectionist controls and tax favoritism.
In a free market, insurers would compete on the basis of quality, security, and transparency of contract. Today, because of political controls, insurance companies face little real competition, and they would face even less under Obama’s policies.
In a free market, insurance companies would be able to offer long-term policies that today are politically impossible.
The proper role of government is to protect individual rights, including the right of businesses and their customers to freely contract. The government’s role in a free market is to prevent fraud and ensure fulfillment of contract. If government were doing its legitimate job, insurance companies could not arbitrarily drop people.
Almost the entire problem of pre-existing conditions was caused by political controls. Given that politicians have mucked things up so badly, the last thing in the world we need is for Obama to expand political controls of medicine.
We should instead fight for real freedom in medicine and health insurance, in which the problems of pre-existing conditions would be rare and easily handled through voluntary charity.
True, restoring a free market in the future will not solve all the problems of those who now have pre-existing conditions, no insurance, and ongoing, expensive medical care. Therefore, we support, as a transitional measure only, a tax-subsidized high-risk pool, such as Cover Colorado currently provides.
When it comes to problems of pre-existing conditions, the disease is political controls. The cure is more liberty.
Linn Armstrong is a local political activist and firearms instructor with the Grand Valley Training Club. His son, Ari, edits FreeColorado.com from the Denver area.