Sunday, August 2, 2009

Health Care Deform -- The Irrational Debate

Before diving into the specific irrationality in the current health care deform debate, I need to dispel a myth. Do you remember the myth that the warmists threw out saying that the issue of global warming was “settled science?” Pure nonsense, of course, as is becoming increasingly clear.

The current myth is that “everyone agrees” that we need to do something about health care. Clearly false. I don’t agree. I know many people who don’t agree. But, more important than my limited set of personal data points is the fact that the American people don’t agree. In the most recent poll that I saw, 76% of Americans are happy with their health care.

The only health care “crisis” is how badly the government wants to screw it up.

The debate is irrational because people don’t know what they’re talking about, and are mangling the English language. The Democrats say they want to provide “insurance” for everyone. But it’s obvious from their proposals that they have no idea what insurance is, or how it works. This is best illustrated around the issue of “pre-existing conditions”.

Let’s say you have diabetes (as an increasing number of Americans do), and you apply to get health insurance. The insurance company may decline to cover you, or decline to cover anything related to your diabetes, because you already have it; it’s a pre-existing condition. This is entirely rational behavior on the part of the insurance company.

Insurance is about risk. Risk is about things that aren't known. Are you going to trip on the stairs and break your arm? Who knows? That means it’s a risk. But, insurance companies know roughly how often people fall and break their arms. So, they go through an arcane calculation, and decide the aggregate cost of the broken arms they are on the hook for, based on how many people they insure, how likely those people are to break their arms, and the cost of fixing a broken arm. That cost is then spread around the entire pool of people they insure. The people who break their arms get their bills paid. That’s how insurance works. It spreads around the risk of unknown things.

Now, suppose you fall and break your arm, and then you go to an insurance company, and you ask them to sell you a policy to cover the cost of the arm that you already broke.

How dumb is that? Breaking your arm isn’t a risk anymore, and insurance is about risk. You now have a broken arm---a pre-existing condition.

If you have a pre-existing condition, and you can’t afford to pay your medical bills, you need charity, not insurance. When people talk about providing “insurance” for a pre-existing condition, they are either lying, clueless, or both.

And, there’s another distinction that gets blurred in all of this: the distinction between charity and socialism. The difference is very clear.

Charity is voluntary.

Socialism is based on theft.

When you propose to steal money from some people to give it to others to pay for their pre-existing medical conditions, it’s not insurance. It’s not even charity. It’s socialism, socialized medicine, and it’s theft. And it’s extremely bad for the country.

Fortunately, the hugely socialist proposals that have been floating around seem to be going entirely off the rails. The poll numbers are clear. The more people know what's in this plan, the less they like it. And now, they will find out a lot about it before it ever goes to a vote. Congresscritters can expect to get a blistering earful during the August recess, and the advocates of socialism are not going to like what they’re going to hear. They’re going to hear that most people like the health care they have, and that Congress damned well better not do anything to mess with that, or they will regret it in 2010.

The worm has turned.

As a libertarian, I know all taxation is theft. As a realist, I know that sometimes it’s the right thing to do. But ObamaCare is absolutely the wrong thing to do.

If we do anything to our health care system (which is unnecessary, and ObamaCare would be hugely bad for the country), we should do five, and only five, things:

1) Mandate that Americans can buy insurance from any state that they choose. Eliminate state restrictions on out-of-state insurance purchases. In addition to making a big dent in costs to the consumer, this would be…for once…a proper use of the commerce clause.
2) We need to get serious about tort reform. Loser pays! This would go a long way to eliminating wasteful, expensive, unnecessary tests by doctors practicing defensive medicine.
3) Get the waste, fraud, and corruption out of Medicare and Medicaid
4) Expand Medicaid to cover people who are really too poor to get their own insurance (not to include people who choose to spend their money on other things)
5) Provide tax credits and/or vouchers to people who can afford to buy insurance with some help. In addition, level the tax playing field. Anyone who buys health insurance on their own, rather than through an employer, should get the same tax benefit that employers get now for providing it

That’s it. No further molestation of the free market required!

I was personally responsible for implementing the upgraded Medicaid Management Information System (MMIS) for the State of Nevada while I was Chief Information Officer for the state, so I know something about this.

I sent the above proposal to President Obama (in a slightly more polite form). We’ll see what he says!

What do you say?

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