In solving the present health care/insurance problem it is critical to first seek the number of uninsured. Timely dissections of census data over the past several decades by economists have always shown approximately the same result. About one-third illegal aliens, one-third young adults who self-insure, and about one-third unemployed who are normally re-employed within a few months and have access to COBRA if they are so inclined.
That leaves about 5 million of the highly touted 45 million as hard-core uninsured individuals that could use some type of assistance in obtaining insurance. However, they are not without health care as that is provided in every ER in the country. Thus, it is disingenuous to use 45 million uninsured as the premise for Universal Health Care.
This is not the first instance for the cost of health care insurance to rise to the level of public concern. Over two decades ago Milton Friedman identified rising medical costs and the coming deluge of ‘baby boomers’ that would flood the national retirement and medical programs leading them to bankruptcy. Always prescient, Dr. Friedman tied a large measure of the rising health care costs to the ‘free medicine’ that was being given as a tax-free supplement to the employee.
Recipients spent more time figuring out the price of their McDonald’s lunch than their health care costs as they were freed of personal and financial responsibility through the third party payer system that evolved. These systems ultimately fail as the first and second parties become separated from their personal relationships by the third party payer’s financial interests. The public school system is often used as another example of third party failure.
As in all democracies, the application of free market principles to our everyday lives is still the best hope for economic and personal freedoms. They do not accede to power hungry political parties wishing to degrade the individual and make him a ward of the state. Rather, they allow citizens to act in their own best interest; and, thusly, hold him responsible for his personal actions. Such freedom of action renders selfish political power grabs inert. The application of free markets to develop cures for social ills is the enemy of the professional politicians who so invade our lives. They will do or say anything in combating it, as their interests are best served through their control of those programs that entangle us for life.
Milton Friedman: Unleash the powerful forces of the American entrepreneurial class
Friedman’s solution was simple. Unleash the powerful forces of the American entrepreneurial class by separating health insurance from the employer and thus returning the individual to his rightful place as the first party participant. Employees would have their present salaries increased by the amount the employer has been paying and they would then be responsible for purchasing their own insurance. Those that wanted to remain with a health plan provided by the employer could do so with an imputed tax liability for its cost. Since the normal cost per employee is approaching $12,000, the employee would soon want control of his health insurance money as he could buy a tailored policy for about a third of that. The vast majority of Americans would opt for a catastrophic policy with large deductibles and that would return the patient/doctor relationship to its rightful place with personal choices and without government interference leading to the bureaucratic rationing of services.
The free market thrust for the health insurance dollars of our over 300 million citizens would be enormous and prices would be competitively adjusted. Reductions would begin the minute a national policy of citizen responsibility for his health insurance was announced. The entire medical field would be in competition and have no choice but to change its pricings structure, as they want and need your business. As in all free market situations, the citizen is now in control of his expenditures and that is a powerful mitigating factor against run away costs. You pay, they play!
Recently, the Dallas Federal Reserve Bank estimated the present value of the unfunded liability of Medicare and Social Security to be in excess of $100 trillion and actuarial reports show them both close to insolvency. Thus, our true National debt is more than ten times its publicized size and there is no method to pay. If every earned dollar were paid in taxes, it still would not cover the expenditure. For the country is to survive this impending bankruptcy it has to immediately begin to shift health insurance to the free market and to the individual in order to decrease costs across the spectrum.
Bankrupting the country through selfishness
The past sophistry used by politicians in order to amass political power by persuading the victims that they are being robbed for their own benefit finally seems to be failing in the present rush for a national health care bill. The premise that we need to create a national health care system in order to cut down on government spending does not pass the laugh test. It is truly comical, and somewhat tragic to see the elite support a bill that they have publicly said they will not participate. It is a shameful partisan and political act that has become a national disgrace to set up our progeny to live in a debt-laden country because we are unwilling to accept personal responsibility. Some day the children of these political charlatans will refer to their ancestors as the ‘horse thieves’ they are. Sadly, honesty and integrity seems to have deserted the present political class.
We are at a crossroad for our country’s financial future. The unique origins of American Exceptionalism do not support the present efforts to degrade the individual and put him under the care of the state. The false promises of Socialism to create a personal Utopia through wealth redistribution has never worked and its absurdity leads to personal and national ruin. The present path leading to the government becoming the main pensioner, that in turn leads to the loss of personal and economic freedoms sounds much like the policies of those countries that we spent the 20th century freeing with our blood and treasure. It is our choice to repudiate these false promises of government care and to let the free market work as it always does by providing affordable products, including health insurance for all; or, to be a part of the offending generation that bankrupted the country through selfishness.
Richard L. Spencer, Ph.D. is a retired Lt Col in the USAF. Dr. Spencer can be reached at: samspencer@mchsi.com
