I recently formed the group Medical Students for Liberty to promote the following principles: constitutional government, sound money, free markets, personal liberty, and a non-interventionist foreign policy. The current health-care reform proposed by Congress violates four of the five principles.
The Constitution is clear in the enumerated powers, Article 1 Section 8, what the role of the federal government is, and the Tenth Amendment gives all remaining power to the states. The states are free to experiment with health-care delivery, i.e. Massachusetts, but not the federal government.
The current proposals also threaten sound money. Politicians have no problem adding more entitlement programs with no plan to pay for them. Raising taxes or cutting spending elsewhere, both cost reelection votes, so they borrow instead. This allows politicians to promise programs without paying for them, ensuring re-election while passing the costs to future generations. But sooner or later payment is required. Today, each American’s share of the federal debt is nearly $40,000.
Politicians know not to send you that bill; they would be out of a job or worse. They choose the easiest option: print more money. The more dollars they print, the less your dollar is worth.
The current system is far from a free market. The government currently spends nearly half of all health-care dollars through Medicare, Medicaid, etc. The government indirectly controls an additional third of health-care dollars by delegating control to employers. In 1942, in response to wartime wage and price controls, employers were authorized to offer tax-deductible health-care plans as another means of increasing employee compensation.
This preferential tax treatment is responsible for tying your health insurance to your job and is one of many unneeded government regulations distorting the free market in health care. Ending this preferential tax treatment and allowing access to health-care plans across state lines will bring a return of the free market to selecting a health-insurance plan. But that is only half the problem.
When you go to the store to buy cheese, you compare prices and choose the cheese that tastes best at the lowest cost. But when you go to a physician, someone else is paying. You don’t shop for the best deal, and physicians don’t have an incentive to lower costs. To solve this, we need to minimize third-party payers. When costs are taken directly out of your pocket instead of taken out of your paycheck in the form of taxes or premiums, you compare prices.
A solution to this would be coupling a high-deductible insurance plan with a Health Savings Account. Because it is coming out of your account, you shop around for routine care, but are covered in the case of catastrophic emergencies. Health Savings Accounts don’t work for everyone, but if started early in adulthood and continued throughout life, they work well for most.
Finally, personal liberty will be sacrificed because, “he who pays gets to say.” If you are costing me money because of poor lifestyle choices, I have the right to say what choices you make — you’re using my money. Nobody wants that. It is an ugly situation that can be avoided, by limiting third-party payers, especially when that payer is the taxpayers. In order to preserve our founding principles and personal liberty, tax reform is needed to shift health care back into the hands of the free market.
Congress is quickly running the other way.
Dustin Krutsinger is a second-year medical school student in the UI Carver College of Medicine.