When Will Republicans Understand Free Market Healthcare?

Healthcare is one of the most complex policy issues.  The lack of free market healthcare, engendered by endless government interventions (and secondary interventions to fix the original interventions), has made policy solutions even more cumbersome.  But the overarching principle of any reform must begin with the understanding that federal intervention in the healthcare industry has inexorably driven up the cost of healthcare and health insurance.  As such, no healthcare policy panacea can begin with growing government and further distorting the already grossly-altered healthcare market.


Instead of proposing more free market solutions, Republicans are offering pale-pastel versions of Democrat government intervention as solutions.  Here are two examples.

Last week, Congressman Larry Bucshon (R-IN) introduced the Orwellian-named “Truth in Healthcare Marketing Act of 2013” (HR 1427) – a bill that forces optometrists to disclose all their licensing and qualifications in all advertising.  It grants wide latitude to the Federal Trade Commission to regulate and penalize offenders.  The bill is heavily backed by special interest hustlers like the AMA and American Academy of Ophthalmology (AAO).  The ophthalmologist lobby doesn’t want competition from cheaper healthcare providers (optometrists), and they want to use the boot of the federal government to ensnare them in red tape.

It is this sort of anti-free market special interest legislating that has crowded out choice and competition from the marketplace.  The reality is that there are already strict laws in most states to punish those optometrists who step outside of their scope of service beyond their qualifications. There is no reason, beyond special interest politicking, for the federal government to get involved.  The bill was introduced on April 9, a day before the AAOs national meetings in DC commenced.

John Sullivan of Oklahoma introduced the same bill during last Congress (along with his special interest T. Boone Pickens Nat Gas handout).  He was defeated.  Enough said.


The second example is Eric Cantor’s bill to spend $4 billion on an Obamacare program to cover pre-existing conditions, a program that even Obama doesn’t want.  Cantor plans to bring the Pre-Existing Conditions Insurance Plan (PCIP) (HR 1549) to the floor next week.  It offers more funding for Obamacare’s federally managed and manipulated high-risk pool for those with pre-existing conditions.  In fact, it even eliminates the requirement that enrollees be uninsured for 6 months prior to applying for the program.  So they can wait until they get sick and immediately get insurance.  This is like applying for fire insurance after your house burns down.

It is precisely these federal anti-free-market programs that make the cost of health insurance unaffordable for everyone – not just those with pre-existing conditions.  Moreover, at a time when we are trying to starve the Obamacare beast, why are we expanding it and giving moral cover to the premise of the law?

The House should instead offer numerous free market ideas that will directly address the barriers to coverage for those with pre-existing conditions, with the most limited impact on the broader market.  We should eliminate the ridiculous “community rating” rules that make insurers offer limited services and options for the same price irrespective of condition.  We should have options targeted for chronically-ill people that don’t include mandated AIDS and fertility coverage, yet provides for their needs with a higher premium.


To help cover the higher cost of the premiums, we could end the ridiculous tax policy of granting exemptions for employer-based health insurance but not personal health insurance costs.  We could expand HSAs especially tailored to those with chronic illness.  Obviously, the general reform ideas, such as making insurance portable and breaking down the barrier to purchase across state lines, will lower costs on everyone.  The remaining few who can’t pay should be dealt with by providing direct vouchers to buy private insurance.  But let’s not do it by having government get on the field and start playing in the market.  Or at the very least, leave the high risk pools up to the states.

Once again, we need a choice, not an echo.


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