The Ownership Society

Coming back from Thanksgiving, we found a nice little missive from our HMO. Apparently, I committed a heinous sin this year: I turned 30. The penalty for this crime? $1260 per year in incerased health care costs. Heaven help me if I have the bad judgement to turn 65; at that point insurance will cost about four times what it does now.

The health care system in the US is, in a word, nightmarish. I'm not talking about the doctors and hospitals, which are generally excellent. I'm speaking instead of the hopeless system that we've contrived to pay for health care. In the economic boom that followed World War II, it made some sense for employers to provide health care--it gave them a competitive advantage, and in an era of lifetime employment it even provided health care for retirees.

In today's world, that system is falling to pieces. First of all, most jobs simply don't last more than a decade at the outside; it's no longer considered even slightly unreasonable to lay off employees at the first sign of economic distress. "Taking care of your people," isn't considered a virtue in the business world just now. Worse, the advent of low-cost businesses like Wal-Mart has put many businesses in a hopeless position--they can either stop providing health care to their employees or lock themselves into a position where they get ground under by companies that simply don't need to spend as much per employee as they do.

The conservative solution to this appears to be (if any conservatives would like to correct me, I'd be more than pleased) to encourage people to pay for their own health care plans through tax incentives. There are a few basic problems here. First,
health care is quite expensive: for my family (two of us around thirty, one two-year-old) it's about $500 per month. For us, that's barely plausible; for lower-income families it's not even remotely possible. Worse, it gets progressively harder to afford health care as we get older; it's only by insuring twentysomethings at inflated rates that businesses could afford to insure their older empolyees.

The liberal solution to this is, of course, to raise taxes and move to either a "single-payer" system (that is, the government becomes the health-insurance provider for most Americans), or a nationalized system (whereby the government runs health care directly). Since the majority of hospitals and doctors are outstanding, most liberals are pragmatic enough to prefer the former.

A few quick responses to obvous questions:

"But won't increasing taxes cripple the economy?"

Not if the higher taxes are replacing a current cost. My taxes would have to increased by $6000 per year before I'd lose money on the deal. Moreover, the government would be in a much better position to bargain for prices than I am by myself! It would also remove a frightful burden from businesses, and remove probably the single most contentious issue from labor negotiations. (Do businesspeople really like being in the position of having to announce to their employees that they have to discontinue health care for their employees? Does that really help morale?)

"Won't this lead to rationed health care?"

Certainly, but that happens now with HMOs! (That's the entire point to HMOs--they ration care to keep their prices down.) The wealthy will still be able to purchase supplemental plans to pay costs beyond what the government is willing to provide.

"Why should I support health care for people too lazy to work?"

There are three basic answers here. First, many people without health care are working; they just don't make enough to pay premiums. Secondly, life is uncertain--anyone may be laid off at any moment, any small business may fail if times abruptly become tough, and anyone may suddenly become seriously ill. A smug assurance that one will never need such a system is foolish pride, not wisdom. Finally, a serious outbreak of an infectious disease will hurt everyone, not just those unfortunate enough not to have health care. An outbreak of whooping cough (for example) will not politely respect social lines, but will endanger everyone (that immunization you had as a child no longer protects you, by the way; we're all protected from whooping cough by the fact that most children are immunized). A drug-resistant TB outbreak would quickly become terrifying for everyone.

Comments are welcome, as always!