Health Care, What's Up With That?

For the past few weeks this country has been engaged in a battle over the idea that a major reform is due for the United States health care system. I've put together a short guide on the broader issues and why this matters. If the news coverage makes you glad the remote was invented, please consider reading this note.

You will not find a debunking of “death panels,” "rationed care," or “socialized medicine” here. There are plenty of great Web sites you can go to and figure out how to get to the bottom of those issues. This note is meant to be a step back from all that, to give you some idea of how we got here with the hopes you can decide for yourself which side to support.

“What’s the issue here?”

The issue is that HR 3200 has been introduced to the Congress with the goal of providing “affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes.”

“Why is it so long?”

You see the phrase above “for other purposes.” This is an incredibly complex issue, and this complexity has unfortunately become the cost of doing business in modern times.

HR 3200 numbers over 1,000 pages. Most Americans can’t be expected to wade through such a considerable document, but the Bill is available for public review and can be found by clicking the link above or on the Web by a simple Google search.

“Why should we do this?”

No matter who is counting, there are millions of Americans who are uninsured and millions more who can barely afford their present insurance. The price of health care has indisputably continued to increase. At the same time, according to the CIA World Fact Book, the U.S. currently ranks 50th in the world in life expectancy and 44th in infant mortality.

This means that we are the country in the world with the highest cost of health care, but far from the greatest care. The United States is the only industrialized country in the world that does not provide its citizens with health care.

“But so those other countries are socialist, right?”

In countries with a parliamentary form of government, it is possible for a party with a "socialist" platform to be elected. This has happened in France, and some might call the English Labor party socialist. "Socialist" is a very broad term, however, and this has primarily meant a change in the allocation of government resources for economic or social programs (think school lunch or Medicaid). These changes did not happen without the will of the electorate, and it no case did it make any of these countries any "less democratic."

One of the primary reasons a similar thing has never happened in the United States is because the United States has a predominantly two-party system. It is very hard for an individual to be elected to office in the United States without allegiance to one of these parties. Certain ideas may carry broad support at a given time, but in general party platforms predominate political debate.

"So what's all the fuss about?"

The health care debate breaks down neatly over party lines. Grossly over-simplifying the argument gets you this:

Democrats in government are driving the debate by claiming that expanding the government's role to include health care for all is something that a government should do for its citizens.

Republicans are countering with the claim that the expansion of health care is not the government's role, and actually harms business besides. They further contend that problems with health care should not require such a drastic solution, and that HR 3200 will create more problems than it solves.

In fact, the health care debate is rather nuanced and should not be considered fully explained by those two statements.

Neither side is proposing things like "euthanasia," "rationed care" or "death panels" although both sides are blaming the other of doing so.


“Ok fine, but I like the system and so all this crap doesn’t really affect me. Besides, my company pays for it!”

If you are a salaried or wage employee working for a company of any size and have health insurance through this company, you are paying for the cost of health care.

By some estimates, health insurance premiums have more than doubled over the last decade and now account for 17% of the US gross domestic product. Businesses are forced to carry this cost, and it has had a demonstrable downward effect on wages, R & D, and business spending.

Many of the people that cannot afford their health care are ordinary Americans who because of accidents or disease suddenly gain an enormous cost for their care. The odds of this happening only increase as one grows older. The odds that someone you know is being affected by the high cost of health care are considerable.

"Single payer? Public option?"

There are a lot of Web sites dedicated to explaining the various terms surrounding the health care debate. What the "single payer" health plan essentially means is that the government will get into the business of providing health insurance to all Americans -- just like it currently does to a certain part of the population with Medicare and Medicaid. In the case of citizens that choose this option, the government will be the "single payer" of all health care benefits.

"Public option" is just another way of saying the same thing. As is discussed below, this system will exist alongside the current privately owned health insurance system. No one will be forced to join, and can keep their private insurance if they choose.

"So why would anyone have a problem with that?"

Some have made the argument that the government getting into the business of providing health care will destroy the ability of the insurance companies to be competitive since the government will offer the lowest price. This in turn will cause private insurance companies to eventually go out of business.

Once that happens the "Public Option" will be the only option.

Once that happens the government monopoly on health care will make the system inefficient by default, since there will be no incentives to make the system better. Once that happens the level of care will drop overall, and eventually students deciding to become doctors will go into other professions.

“Well, ok, but doesn’t the free market do a good job? If these companies were really doing such a bad job, they’d just go bankrupt, right?”

That depends on which free market you are talking about.

If you are talking about the free market of Adam Smith, many have commented that Adam Smith’s discussion of the free market can readily be taken to mean whatever you want it to mean. It is not clear that Smith would have been for the modern idea of a corporation, or of lobbyists. It is equally unclear that Smith would have argued that keeping people healthy should be subject to market forces. One thing worth remembering is that a big fan of the “market” as described by Adam Smith is the founder of modern Communism – Karl Marx!

As for the free market that exists when government keeps its nose out of the affairs of business, there simply is no such thing. The government interferes in business all the time. This was the case when the phone company and airlines were deregulated in the 1980s, when the government brought an anti-trust suit against Microsoft in the 1990s, and when the government deemed AIG and GM "too big to fail" and bailed them out of their financial crises over the last year.

There is “free market” as an economic idea and then there is “free market” as a political idea. When referring to the health care debate we must take care to distinguish when this term is used on a political and not economic basis.

"Ok, but then my taxes are going to go up!"

The president's office has called for raising the taxes of the top 1% of Americans to pay for the health care plan (an idea Adam Smith would have agreed with). There have been some big differences between the Obama Administration and the Congressional Budget Office regarding the "real" cost of health care. It could be expected, however, that the lowered cost of health care should more than offset any tax increase.

“Ok, but the government’s just going to mess everything up right? And besides, health care isn’t in the constitution!”

“Obamacare” does not propose to eliminate private insurance companies or the choice to carry private insurance. There is no such provision in HR 3200. If HR 3200 passes, companies like Healthnet will continue to exist. They will be in competition with the federal health care plan, and will surely lose members as a result.

The federal government has its challenges and some notable failures, but it certainly does do some things well. There are of course exceptions, but your mail generally goes where you send it and arrives when you need it, the power grid works when you plug things in, public schools provide decent educations and people can trust the food they eat. Our planes do not crash when we go to visit grandma. This is all because of the federal government. Additionally, in all cases (with the exception of the FAA) there are private alternatives that much of the time provide better options, and that will not change if HR 3200 is passed.

"All right, whatever, geez, enough already! I'm missing Lost!"

Fair enough, I'm done. Hopefully this has helped you understand the broader arguments and why they matter. I welcome any comments and ask that the debate remain respectful. Thanks to K. C. for his insightful insight.