April 30, 2008
By Ari Armstrong
My wife and I pay $132 per month total for high-deductible health insurance, hundreds of dollars less than we would pay for comprehensive insurance. Our goal is to never need to make an insurance claim. We pay for all of our routine medical care — doctor visits, eye glasses, dental work, prescriptions — out of pocket, and we like it that way.
Our medical expenses come out of our Health Savings Account (HSA), which means that it’s all pre-tax money. Unfortunately for us, various enemies of HSAs have been trying to undermine them at the national level.
By paying less for high-deductible insurance, we’ve been able to pay off debts faster and prepare for a family, something that has been difficult given our high tax burdens.
If Colorado wants to keep and attract young working families, the legislature ought not further muck up health insurance by loading in a bunch of new expensive mandates, Nor should the legislature require such couples to further subsidize others through higher taxes and/or insurance premiums.
If the legislature wants to make health insurance more affordable for more people, it should repeal existing political controls that have driven up insurance costs and priced some people out of the market.
However, we should realize that the broader problem with health insurance is that, because of federal tax policy, most insurance is tied to one’s job. Lose your job, lose your insurance. Because of the tax benefits of “paying” people with insurance coverage, such insurance is really pre-paid medical care that discourages economic provision and consumption of health care.
Our society has largely forgotten the proper purpose of insurance when it comes to health. Most people remain healthy into middle age, when risks for various diseases start to increase. Through insurance, we voluntarily pool our resources to pay for the care of the few who get unlucky. If federal policy had not driven health insurance off track, we’d buy insurance when we’re young at a low rate and keep the same policy long-term, and we’d also pay for routine and expected expenses directly, which would encourage healthy competition.
All of the commonly cited problems with medicine have been caused by decades of political intervention in medicine. For details, see “Moral Health Care vs. ‘Universal Health Care’,” by Lin Zinser and Paul Hsieh, MD, at WeStandFirm.org.
Yet, rather than act to repeal the controls that are the cause of the problems, many of today’s politicians want to impose still more controls. If they succeed, the result will be worse health care that costs even more.
Here in Colorado, the legislature has considered everything but repealing the controls that are the cause of the problems. In 2006, then-Governor Bill Owens signed into law Senate Bill 208 to create the Blue Ribbon Commission for Healthcare Reform. That commission rejected the only free-market proposal and recommended such measures as massively expanded taxes and forcing everybody to buy insurance. The Commission’s recommendations basically went nowhere.
But apparently one failed commission deserves another, so State Senator Bob Hagedorn is currently pushing Bill 217. If the bill passes, later this year Governor Bill Ritter will appoint “a panel of expert advisors” to come up with a bunch of new political controls for the legislature to consider in the future.
Originally, the bill encouraged the “panel of experts” to assume that all Coloradans would be forced to purchase politician-approved health insurance. The amended bill lists that only as an option.
Forcing people to buy insurance would cause two basic problems. First, you can’t force somebody to buy something they can’t afford, so any such plan must accompany massive tax hikes and subsidies. Second, once politicians force you to buy something, special-interest groups will constantly fight to include their pet service as part of the forced package, whether you want it or not. The result will be continual pressure to expand the scope of the forced insurance and make it ever more costly.
Much of the bill describes the creation of politician-approved “value benefit plans” for health insurance that would be subject to a variety of restrictions and substantially subsidized through taxes.
Yet consumers and providers have the right to decide through voluntary exchange what plans constitute a value to them. We don’t need a new bureaucratic commission; we need liberty.
Ari Armstrong, a guest writer for the Independence Institute, blogs at FreeColorado.com.