Health-Care Reform Would Help the Economy: If it is the Right Reform

Almost immediately after the historic Massachusetts Senate election, many Democrats began expressing second thoughts on continuing legislative efforts for health-care reform given the ongoing economic weakness and sustained unemployment. That stunning outcome forced Democrats, in an attempt to avoid a complete election debacle in November, to step back from their misguided progressive reform of health-care and announce they must instead work on improving the economy and unemployment. The Republicans were only too happy to agree with this legislative “pivot”, not so subtly implying that the Democrats have wasted a year working on health-care reform when they should have been addressing unemployment.

Once again, our career politicians in Washington have demonstrated that political maneuvering takes precedence over substantively addressing the serious challenges facing our citizenry. In fact, presenting these two legislative efforts as being mutually exclusive couldn’t be further from the truth. Very clearly, reform resulting in lower health-care costs and in substantial slowing of the growth of those costs would provide a major long term boost to the economy, including employment. Escalating health-care costs increasingly burden small businesses, large businesses, and families. For businesses that provide health-care employee benefits, higher costs for that insurance leave less capital to invest in the business and make those businesses less competitive in the global economy. Broader detrimental economic consequences of these costs were confirmed in a recent RAND corporation study that demonstrated among corporations that provide employee health-care benefits, increasing health-care costs result in greater unemployment and lower industrial output. Further economic damage occurs on the employee side with higher insurance costs resulting in lower wages, household spending, and saving.

Legislation for effective health-care reform would utilize free market principles to shift from a 3rd party payer system, a system that essentially creates unlimited health-care demand, to a more consumer oriented system. Effective legislation would also increase competition to decrease costs. Those same competitive forces would stimulate not only transparency and accountability with regard to costs but also, in turn, transparency and accountability with regard to quality of care. Further, lowering health-care costs would make health-care insurance more affordable for more businesses, families, and individuals thus making significant headway in decreasing the numbers of the uninsured. The components of successful reform should include promoting Health Savings Accounts, equalizing the tax treatment of privately purchased health-care insurance with that of employer provided insurance, allowing purchase of insurance across state lines, decreasing the number of mandated benefits, and allowing insurance companies to appropriately assess the risk of utilization of health-care services in premium pricing. This could all be done without creation of a single new government entity, without adding a single dollar of government spending, and without a single dollar of increased taxation.

In contrast, the “reform” put forth by the Democratic Congressional majority, (thankfully stopped dead in its tracks by the Massachusetts election), would have expanded the failed 3rd party payer system, increased insurance costs, expanded Federal and state provided health-care insurance that currently has trillions of dollars of unfunded liability, created massive new government bureaucracies, increased taxes, done immense harm to an already faltering economy, and pushed our country further down the road of the welfare state. (As an aside, understand that terms such “faltering economy” sound very academic and impersonal. In reality, the “faltering economy” means millions of our citizens agonize over their inability to provide for themselves and their families, and many others fear they may lose that ability.)

Still, don’t hold your breath waiting for Congress to enact common sense legislation, (utilizing the free market principles that made our country the global economic engine), to address the current health-care system ills and the related devastating effects on the economy. The Democratic Party, currently held hostage by the progressives, rejects such solutions outright because they do not conform to their ideological agenda. The Republican Party is more interested in undermining Democratic majority for their own political gain. And the career political establishment, both Republican and Democrat, would rather serve their own interests and special interests than that of the citizens of the republic they represent.

The great experiment in liberty that is our country and the resultant unprecedented national prosperity, freedom, and satisfaction is now mortally threatened simultaneously by the progressive left that seeks to abandon our very foundational principles and by the corrupt political establishment. For our sakes and for that of our posterity, we can not just sit back and allow our liberty to die (be killed). We must instruct ourselves and others with regard to the issues of the day including health-care reform, education reform, immigration reform, the National debt, etc. More importantly, we must reeducate ourselves and others on our country’s foundational principles and on that foundational understanding on the role of government. We must participate in the grass roots liberty loving political movement at the local, state, and national level. Find your local grass roots organizations. Learn about the candidates. Become a candidate. Support worthy candidates (local, state, and national), with time, effort, and money. This will take effort but without that effort our country, the country of our forbearers, many of whom sacrificed their very lives for the American way, will slip away.