No good ‘free-market solution’ for health insurance exists

Published 7:21 am Thursday, July 27, 2017


Contributing columnist

In its attack on Obamacare (the Affordable Care Act or ACA), the Republican Party is wallowing in a mess of its own making. Out of willful ignorance and dishonesty, the GOP promised the impossible: to reduce government subsidies while lowering individual premiums and preserving what most Americans like in Obamacare (e.g. ending discrimination against the seriously ill and reducing the number of uninsured).

Email newsletter signup

The conservative core of the GOP just “knows” deep down that government should keep its distance from health care (as it should from all markets). Members of the so-called Freedom Caucus and their Senate allies rejected the recent House and Senate healthcare bills as “Obamacare Lite” because the bills contained vestiges of ACA taxes, subsidies and regulations. FreedomWorks, a conservative advocacy organization with ties to the Tea Party and the Koch brothers, is about to send to Republican senators who don’t vote for repeal of Obamacare a “Freedom Traitor Award” along with a bust of Benedict Arnold.

Before Trump became president, the House Republican majority repeatedly voted to repeal the ACA. Repeal has been central to the GOP election campaigns for Congress and the presidency. Yet, now that their party controls the federal government, many Republicans are afraid to act, and the right is furious. Ben Shapiro, a prominent conservative ideologue, put it this way in a recent National Review article:

“Herein lies the problem. Republicans are afraid of actually standing for conservative principle when it comes to policy. Here is the conservative policy take on health insurance: A free market guarantees the highest-quality, lowest-price service in any market. Tax credits, government-sponsored risk pools and health-savings accounts are all “government-run form(s) of social engineering.”

Shapiro’s “free market” is the Arcadia of American conservatives, a place where people are busy fulfilling themselves by exchanging goods and services. It’s a utopia in which all transactions are win-win, since each party freely chooses to participate. It’s a happy hunting ground for vigorous entrepreneurs freed from the regulatory yoke of what Steve Bannon calls “the administrative state.”

In this laissez-faire utopia, government doesn’t confiscate hard-earned riches to fund the health and well-being of less productive citizens. Lured by the prospect of immense profit, investors will enable entrepreneurs to do what Trump calls “beautiful things” for the masses, including what Shapiro would describe as “highest-quality, lowest-price” medical care. Free markets can do the same for all kinds of so-called public services such as education and water.

To see the dystopia lurking in this laissez-faire fantasy, let’s start with a question: why don’t we treat police protection as just one more commodity to be bought and sold in a market, as Shapiro and the Freedom Caucus want for health care? The answer is that under the 5th and 14th amendments to the U.S. constitution, the federal and state government must provide everyone equal protection under the law. That protection includes enforcement of the law by agencies such as the police (and courts).

Whether I’m rich or poor, a celebrity or an unknown, if someone has battered, defrauded or stolen from me, the state is obliged to investigate the crime and deal with the perpetrator. This protective function also requires a court system that affords equal protection to the perpetrator as well. Law enforcement and the court system are very costly services essential to public life, and funded by tax revenue. They are not commodities that people could be free to buy or not, in various forms and quantities from competing vendors.

Police protection is insurance against the peril of harms that can be done by criminals. Some people may never be victims of a serious crime, but no one would ever want to go without the protection. It’s an insurance that only government can provide. That’s why we have the 5th and 14th amendments, and why everyone pays for this public service through taxes.

Health insurance is a protection against a range of harms, many of which are life-threatening or cause much suffering and pain and which require levels of care well beyond the means of ordinary people. Every citizen is vulnerable to ill health just as they are to crime. Just as we each need the help of police and courts to cope with crime, so we each need the help of skilled professionals and costly facilities to deal with serious medical afflictions.

Yet Republicans are against treating health insurance as a public service like police protection and the court system. Instead, they want it to be a commodity that people are free to buy or not, in forms and quantities they can afford from competing for-profit vendors.

Although Republicans accept that every citizen is equally entitled to protection against crime, they believe that we should be divided into different risk pools, different levels of protection against health perils according to our ability to pay. In a free market, health insurance companies make their profits by denying claims whenever their complicated rules permit, and by not insuring vulnerable people. If police protection were like this, then police would want to reduce coverage of neighborhoods with crime problems.

The equal protection afforded by publicly funded police and courts is an example of  solidarity, an essential virtue in a healthy and prosperous society. Solidarity is social unity and cohesion based on the interdependence of all its members. According equal protection to all implies that we recognize in each other an equal dignity as citizens.

How can we say that we value our fellow citizens enough to protect them against crime, but that we will not use the resources of a wealthy nation to insure they will not die or suffer unnecessarily from curable health problems?