August 8, 2014
Free The Future
By Geoff Wilson and Wesley Coopersmith
So much for Obamacare making health insurance more affordable – analysts have firmly established that insurance premiums, especially for young Americans, are rising. Obamacare will increase the cost of premiums by an average of 44 percent for young females and 91 percent for young males.
Obamacare has expanded government intervention into health care but done nothing to reduce the costs, leaving young people in quite a bind. What can be done to fix this problem and make health insurance more affordable for everyone?
Proponents of government-run health care claim that intervention into America’s health care system is necessary because the free market doesn’t provide quality and affordable care on its own. These same proponents neglect to mention that government intervention has long distorted the health care marketplace pre-Obamacare.
Instead of more of the same, let’s reduce overzealous regulation of the health care marketplace to create more competition, innovation, and choice for all Americans.
When numerous companies have to compete with one another to win our business, they are incentivized to provide their goods or services for the lowest possible price at the highest possible quality. Decreasing regulation allows more businesses and products to make it to the marketplace and thus gives the consumer more options.
Unfortunately, the president’s health care law does not address the underlying lack of competition and innovation that keeps costs so high and limits the quality of care Americans receive. Obamacare increases demand by forcing everyone to buy health insurance while doing nothing to increase supply. It’s the perfect recipe for higher prices.
Under our current health care system, obtaining prosthetics can cost tens of thousands of dollars. Much of the blame for such high costs lies with government bureaucracy. It shouldn’t have to take millions of dollars and the Food and Drug Administration’s (FDA) approval to make a quality, safe, and affordable medical product.
Leon McCarthy, a 12-year-old boy in need of a prosthetic hand, couldn’t afford $30,000 for the existing prosthetic product. Instead, Leon’s father, Paul, worked with an international team that included a puppeteer and a carpenter and built a $150 3-D printed prosthetic.
It’s now available online in a newer design with parts as cheap as $5! This is a prime example of the sort of innovation that everyday people can come up with to solve medical challenges at low cost. Sadly, FDA red tape makes many innovations needlessly expensive and time-consuming, depriving all Americans of a greater supply of useful medical treatments. If Obamacare proponents are serious about reducing the cost of quality health care, they should address the overregulation of medical technology.
But that’s not the only way the government limits the supply of health care. The government should be encouraging doctors to open new clinics and hospitals and welcoming the prospect of new options and lower costs for American patients. But Certificates of Need (CON), essentially government permission slips allowing would-be health care providers to operate, make it more difficult for doctors to expand the supply of medical practices. These certificates effectively serve to protect the profit margins of existing hospitals from new competition at the expense of patients. This needs to change.
If our goal is to make health care affordable for every American, increasing the supply of medical care is the best way to meet that goal. Obamacare has increased the demand for health care by forcing every American to buy it but failed to increase the supply. Hence, individual premiums are growing out of control.
Unless the government allows the free market to expand supply and stimulate competition and choice, American health care patients will be stuck with the same expensive treatments at the same expensive hospitals and face years upon years of rising costs.Obamacare only makes a bad situation worse.
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