Liberalism Will Never Fix Our Broken Health Care System

Obama rally. Photo by Lacy Landre. Taken January 2012. Obama rally. Photo by Lacy Landre. Taken January 2012.

In a May 2 op-ed for The New York Times, Richard Scheffler, a professor at the University of California-Berkeley, and Sherry Glied, a professor at New York University, acknowledge the Affordable Care Act’s failure to create a competitive health insurance marketplace.

“The architects of the Affordable Care Act (ACA) counted on competition in the health insurance market to keep costs down and quality high,” wrote Scheffler and Glied. “While the law has accomplished many of its coverage and cost-containment goals, its vision of a more competitive insurance market seems to be fading.”

Scheffler and Glied continue by outlining some of the more troublesome recent developments related to the ACA health insurance exchanges, focusing primarily on the growing list of major health insurance providers who have decided to abandon Obamacare exchanges because of significant revenue losses.

Scheffler and Glied admit Obamacare isn’t working as planned, but rather than suggest a move toward free-market reforms, the authors believe state governments ought to seize even more control over who is allowed to operate in health insurance exchanges.

“The lesson here is that, especially in a health care system that is becoming more concentrated, competition and regulation can work together,” wrote Scheffler and Glied. “A third party – governmental or quasi-governmental – can use its purchasing power to ensure that negotiating better health care prices benefits consumers, not just insurers.”

The authors point to their study of the state exchanges in California and New York to show further market restrictions actually improve market competition. As Scheffler and Glied explain, New York allowed all willing insurance providers to participate in its health insurance exchange, but in California, only 12 of 32 insurers who initially showed an interest were allowed to offer health insurance plans. This, the authors conclude, is one of the primary reasons health insurance premiums are higher in New York markets with fewer insurers available than similar markets in California.

“In California, by contrast, areas with fewer insurers also had lower premiums,” wrote the authors. “Why? With initial premiums set at modest but adequate levels, and a vibrant marketplace, there was no need to further threaten insurers who might consider large premium increases. If an insurer tried to raise its premiums too far, consumers could easily shop among the restricted set of insurers for an identical product and switch to an alternative plan. Even in areas with fewer insurers, competition was sufficient to keep cost growth down.”

Scheffler and Glied also say the lower premiums in California are partly due to greater “standardization” of health insurance plans. They argue that because California forced most insurers to offer plans with very similar terms and benefits, it was easier for consumers to pick health insurance offerings based purely on price, rather than have to wade through all of the various plan types that exist in New York.

We’ve seen this argument before: If only the government were more involved, all of the nation’s health insurance problems would go away. Brilliant bureaucrats with a talent for saving money and being frugal (try to contain your laughter) can negotiate better prices for everyone and cut the unnecessary waste imposed on consumers by greedy businesses, and costs will come tumbling down.

Using this logic, I’m not sure why a market needs to exist at all. If government bureaucrats are so great at negotiating prices and standardizing services with insurers, imagine how outstanding they would be at operating a single-payer, nationalized health insurance system! Even better: Let’s put bureaucrats in charge of everything. If they know better than the health insurance companies and health care providers, why wouldn’t they know better than car insurance companies, banks, fast food restaurants, manufacturers, or any other business for that matter? If improving services and cutting costs is truly as simple as adding centralized planning, why not have the government plan everything?

Just try asking a liberal friend of yours to answer those questions and watch the incredible word-fumbling begin. The truth of the matter is liberalism, when taken to its logical end, always leads a nation to the same place: totalitarianism.

A perfect example of this phenomenon is U.S. health care policy during the reign of President Barack Obama. At the time Obama took office, the health care system had some serious problems: rising prices, out-of-control costs, growing Medicaid rolls, etc. To address these concerns, Democrats gave us the Affordable Care Act. “More centralized planning is what we need,” we were told, and more centralized planning is what we got.

Since the Affordable Care Act passed into law, health insurance premiums have skyrocketed, quality health insurance plans have disappeared from Obamacare health insurance exchanges, insurances companies have, in some cases, lost hundreds of millions of dollars and have abandoned exchanges, access to quality care has been reduced, Medicaid rolls have grown dramatically, and U.S. debt is worse than ever.

How can we resolve these terrifying crises? More regulations, we’re told. And when those fail, we’ll be told even more regulations are needed.

When faced with the constant, pounding drumbeat of “more regulation, more regulation,” ask the ultimate impossible-to-answer question: When in history has this strategy ever taken a nation from poverty to prosperity? Is there even a single example?

The reason free markets work and centralized planning doesn’t is because individuals in pursuit of bettering their own lives will, in the vast majority of situations, make better decisions than lesser-interested parties, such as government bureaucrats. This is precisely why children learn responsibility by having earned possessions of their own to be responsible for.

Why would a government official be more interested than I am in making sure I save money, receive quality health care, or put my children in the best educational environment? A bureaucrat generally isn’t, and anyone who has ever had the pleasure of spending a Saturday afternoon waiting in line at a Chicago post office or DMV office will tell you just how right I am.

What about the arguments made by Scheffler and Glied in regards to New York and California? Didn’t they prove that in at least that instance, more government control improved the situation?

First, comparing California to New York is like comparing a car to a boat. There are so many other factors to consider, such as population size, population density, existing health care problems, weather, eating habits, culture, immigration, etc., that a comparison of health care costs in two completely different states based on a small number of factors is wildly misleading.

Second, premiums are only one piece of the very large and complicated health care puzzle, and other considerations paint a different picture than the one presented by Scheffler and Glied. For instance, average health insurance deductibles in California for Bronze plans rose by $553 in 2016 compared to 2015 and by $297 for Silver plans. That’s significantly higher than the deductible increases that occurred in New York, which experienced a $300 increase in its average Bronze plan deductible and $205 for its Silver plan.

Third, and perhaps most importantly, premiums rose dramatically immediately after Obamacare was implemented, and they have yet to go back to pre-Obamacare levels. In fact, they continue to rise almost everywhere in the country. From 2013 – prior to the opening of the Obamacare exchanges – to 2014, average premiums rose by 44 percent for 23-year-old women, 78 percent for 23-year-old men, 35 percent for 30-year-old women, and 73 percent for 30-year-old men.

All this occurred after the Affordable Care Act greatly increased the role of the federal government in health care. If even more central planning is going to solve problems related to rising health care prices, it would be bucking a well-established trend in the opposite direction.

[Originally Published by The Heartland Institute’s Consumer Power Report]

Photo: Obama rally. Photo by Lacy Landre. Taken January 2012.

Justin Haskins
About Justin Haskins (178 Articles)
Justin Haskins is currently the executive editor and a research fellow at one of the nation’s leading free-market think tanks. Opinions here are his own. Justin graduated summa cum laude from the University of Richmond (Richmond, VA) in 2010. Justin also graduated from Regent University (Virginia Beach, VA) in 2011 with an M.A. in government with a focus on international relations and again in 2015 with an M.A. in journalism. Haskins is a columnist for Townhall.com and has been published over 200 times in major digital and print publications, including The Wall Street Journal, Chicago Tribune, New York Post, FoxNews.com, U.S. News and World Report, Forbes, Breitbart, the National Review, The Blaze, The Hill, The Daily Caller, The Washington Times, the Washington Examiner, the American Thinker, Human Events, Reason, The American Spectator, the Providence Journal, Yahoo! Sports, and Red Alert Politics. His writing has also been featured by The Rush Limbaugh Show, Drudge Report, Real Clear Politics, The Weekly Standard, and Fox News’ Fox Nation.
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