Skip to main content

The Democrats' "Public Option" Will Result in Long Lines and Rationed Health Care


Reality and the "Public Option"

The H.R. 3200 America’s Affordable Health Choices Act, which is being touted by Democrats in Washington as a "public option" for uninsured Americans, has many provisions aimed at lowering the cost of health care by government decree.

Unfortunately, reality doesn't work that way, and the government cannot simply dictate prices to health and insurance providers without certain consequences. If you want to make a balloon smaller you can't do so by squeezing it. You'll just move the air around into different spaces.

Trying to squeeze the health care market to get more out of it will have the same result; it will only shift things around. Below are some micro-economic analyses of government policies and their effect on the price of health care. If you are unfamiliar with how to read these graphs, I have a short primer here.


The "Public Option" Creates Shortages


As the graph above illustrates, if Congress simply and crudely forces down the price of health care by dictating prices to health care providers from Washington, which is one of the provisions of H.R. 3200, the price will fall to a level at which supply does not meet demand.

There will be more people who want health care at that price than there will be suppliers, which is called a shortage. This is what opponents of the so-called "public option" mean when they say that it will cause long lines and rationed care. There will be lines for health care, there won't be enough to go around, and the government will start to ration it according to decisions and policies made by bureaucrats. Even Obama can't deny that his overhaul will change how Americans receive care.


U.K. / Canadian-Style Socialized Medicine

They will have to decide if your need is great enough, if you have suffered enough pain, if you are old enough, if you are young enough, or if your life is worth living enough to get the care you need. That's the tragic part of all this- the "public option" will actually result in less available care, as you can see from the decreased quantity supplied at the artificially lowered price.

This isn't just abstract theory and lines on a graph. You can see numerous empirical examples of this, among them, the "brain drain" experienced by countries like the U.K. and Canada that implement socialized medicine. Their supply of doctors decreases as those doctors move away to find more lucrative opportunities in non-single-payer countries like the United States.


Competition = More Affordable Care AND More Care

But there is a real solution that will drive down prices without diminishing quantity and creating a shortage. If we opened up the market for health insurance to real competition, it would change the dynamics at work on the supply-side because rival firms would have to keep prices competitive, shifting the supply curve itself.



What does that entail? One of the biggest impediments to a truly free and competitive health insurance market is the government-backed entanglement of employers with the provision of health insurance. In an interview I conducted with entitlements expert, Michael D. Tanner of the Cato Institute, he wrote:

"Employment-based insurance hides much of the true cost of health care to consumers, thereby encouraging over-consumption. It also limits consumer choice, since employers get the final say in what type of insurance a worker will receive."

Another major step toward opening up a free market of competition would be to allow people to buy health insurance across state lines. Quoting again from my interview with Tanner:

"Unfortunately, consumers are more or less held prisoner by their state’s regulatory regime. It is illegal for [a] New Jersey resident to buy the cheaper health insurance in Kentucky. On the other hand, if consumers were free to purchase insurance in other states, they could in effect 'purchase' the regulations of that other state."

Conclusion

Remember, as I noted above and demonstrated on the graph, by allowing true competition to occur, we end up shifting the supply curve itself, which causes the desires of suppliers and consumers to meet at a different price level, a lower price level, creating more affordable health care without creating a shortage and the consequent lines, waiting, and rationing.

This method not only makes health care more affordable, it actually results in more health insurance. It creates more quantity in the market for health insurance, meaning more people are covered and truly have access to health care. And who knows- more competition might just result in better quality too.

But before that can happen we must make sure that enough of our Congressman oppose the "public option" to defeat it like we did in 1994- which means melt those switchboards!


Delicious button

Stumbleupon
Subscribe to The Humble Libertarian

Popular posts from this blog

Ron Paul’s Devious Plan to Steal the Presidency

This is an absolute hoot! Ron Paul hating Republicans are in panic mode. The website Hillbuzz.org includes in its blogroll Ann Coulter, Michelle Malkin and Conservatives4Palin. Hillbuzz is so utterly revolting that I may just have to subscribe to its updates. Up until yesterday, I really hadn’t taken the Ron Paul campaign very seriously. Most non-Paul voters probably felt like I did, and laughed him off as that “kooky Uncle” who didn’t have a chance in hell to win the Republican nomination for President. Well, I’ve changed my mind. Big time. Yesterday I attended the Republican organizational convention for my Senate district here in Minnesota, and what I witnessed was an organized take-over of our nomination process by Ron Paul cultists. They came to this convention with the sole intent to take over as many of the delegate seats as they could, and sadly, they succeeded. Read the rest here Hillbuzz 

How To Gain More Twitter Followers

Earlier today, I wrote : "My goal is to write a book before the end of March. My goal is to spend no more than a week from start to publication, spending as much time as I need in order to get it done during that week. My goal is to give it away to you for free here on HumbleLibertarian.com. What's a goal you have? Something you may have been putting off for years? Something you could accomplish in one month if you were determined? If it's near-term enough of a goal, and specific enough of a goal, and you share it in the comments below, feel free to tell me how I can help you and I'll do whatever I can. If it's a libertarian / news / politics-related goal, my manner of help would be easy to determine. I could promote it, introduce you to someone via email, (etc.). If it's something apolitical like quit smoking cigarettes, start exercising, learn guitar, start a business, gain more Twitter followers, learn another language, eat a paleo diet, or...

IRS Admits Targeting Tea Party!

You think Matt Drudge is just being hysterical in that screenshot above? With that ALL CAPS headline about the IRS? Being hysterical, while trying to sell you chocolate covered strawberries for Mother's Day? Well guess again, because you know this is seriously crazy when even the AP is using all caps for their headline , and filing it under a subdomain called "bigstory": The AP says : The Internal Revenue Service inappropriately flagged conservative political groups for additional reviews during the 2012 election to see if they were violating their tax-exempt status, a top IRS official said Friday. Organizations were singled out because they included the words "tea party" or "patriot" in their applications for tax-exempt status, said Lois Lerner, who heads the IRS division that oversees tax-exempt groups. In some cases, groups were asked for their list of donors, which violates IRS policy in most cases, she said. "That was wrong. T...
–––As Featured On–––