The ever-expanding role of government in healthcare provides an excellent example of Ludwig von Mises’ warning that “The Middle of the Road Leads to Socialism.” Beginning in the 1940s, government policies distorted the health care market, causing prices to rise and denying many Americans access to quality care. Congress reacted to the problems caused by their prior interventions with new interventions, such as the HMO Act, ERISA, EMTLA, and various federal entitlement programs. Each new federal intervention not only failed to fix the problems it was supposedly created to solve, it created new problems, leading to calls for even more new federal interventions. This process culminated in 2010, when Congress passed Obamacare.
Contrary to the claims of some of its opponents, Obamacare is not socialized medicine. It is corporatized medicine. After all, the central feature of Obamacare is the mandate that all Americans buy health insurance from private health insurance companies. And, as with previous government interventions in the marketplace, Obamacare is not only failing to correct the problems caused by prior federal laws, it is creating new problems.
Consider the almost weekly stories about how Obamacare is causing health insurance premiums to rise, causing employees to lay off workers or reduce their workers’ hours, and causing doctors to leave the profession. Also, consider the problems the administration is already having administering the federal exchanges and other parts of the health care law.
I fully expect the implosion of Obamacare to continue, and the supporters of nationalized health care to use Obamacare’s failures to push for a Canadian-style “single payer” health care system. Unfortunately, some Obamacare opponents fail to see that the problem is not just Obamacare, but all government interference with health care. These Obamacare opponents advocate replacing Obamacare with “Obamacare lite.” But economic law teaches us that “Obamacare lite” will be no more successful than Obamacare.
In order to win the battle for health freedom, those who oppose nationalized health care must have the courage to advocate for a complete free market in health care. Enhanced individual tax credits and enhanced use of Health Savings Accounts (HSA) are just two polices that could help restore a free-market in health care by putting control over the health care dollar back in the hands of the people. A good place to start would be to repeal Obamacare’s restrictions on HSAs.
Long-term group insurance contracts could ensure that those with pre-existing conditions could obtain coverage. Under such a contract, individuals could pool resources to purchase a group policy that would cover any and all problems any member might develop over time. Businesses, churches, community organizations, and even fraternities and sororities could offer these types of contracts.
Negative outcomes insurance, where patients waive the right to sue for medical errors in exchange for guaranteed payouts to those harmed, could reduce the burden of malpractice litigation.
Other free-market health care reforms that could make the health care market more competitive and lower the cost of health care include allowing individuals to purchase insurance from across state lines, removing restrictions on physician-owned hospitals, and reducing the regulatory power of the Food and Drug Administration.
Some will say it is unrealistic to advocate replacing Obamacare with a pure free-market system, but in fact it is unrealistic to expect anything less than a true free-market to provide quality health care for Americans at all income levels. Continuing on the “middle of the road” in health care by mixing free-markets with government spending and regulations will only continue to take us on the road to socialized health care.
Ron Paul is a former U.S. Congressman from Texas and the leader of the pro-liberty, pro-free market movement in the United States. His weekly column – reprinted with permission – can be found here.