The third anomaly are the ridiculous positions taken on rationing. There can be no health insurance, government or private, without rationing. Once an insured person gets ill, they and/or their family naturally demand all the health care they think they need, even if the efficacy of the treatment is dubious. This is the classic moral hazard problem in all insurance. The private insurance firms currently do the rationing, that is why you hear the horror stories about people who cannot get the care they need, that is why everyone hates the insurance companies, and that is why it is so easy to demonize the insurance industry.
It is not a question of the existence of rationing; it is a question of who does the rationing. Both private insurers and the government have conflicts of interest. That is why those who ration should be independent referees. It is also why the nation desperately needs to have a calm, rational discussion about the need for "rationing" and how to keep it to a minimum by creating incentives in insurance premiums that induce people to conserve health care.
The fourth curiosity in the debate is the unseemly haste: "Act in haste, repent at leisure." Why do we have to do something this important without carefully vetting the legislation? The speed demanded is too reminiscent of the last time I tried to buy a used car.
Two step solution
Despite the forgoing, I support a two-step health care reform program. During the first step, we adopt real cost reform that truly "bends the curve," as President Obama puts it. I am willing to pay higher taxes during this first step to do something for the working poor with no, or limited, health care coverage. In the second step, after costs are under control, I support universal coverage.
The components in the first step are: Eliminate the local insurance monopolies created by state regulation, reform malpractice law, establish independent medical review panels, and create a means-tested insurance voucher program for the working poor.
One should note the state-by-state health insurance monopoly problem mentioned by President Obama is created by government regulation and that regulation violates the commerce clause in the Constitution, since only the federal government can regulate interstate commerce.
The states never should have been allowed to prohibit the sale of health insurance across state lines. No one can be serious about controlling health care costs without eliminating defensive medicine, and that cannot be done without reforming malpractice law.
Prior to the second step, we need to provide incentives to train more primary care physicians, physician's assistants and nurses. The components in the second step are: mandatory health insurance, elimination of the exclusions for pre-existing conditions, non-cancellation clauses, preventive medicine provisions and premium incentives for people to modify their behavior.
The means tested vouchers for insurance should not be available to illegal aliens. Even the president's waste and fraud cost savings, the elimination of defensive medicine, and rationing by independent review panels will not make this plan budget neutral. There is no way to pay for universal coverage without higher taxes. My plan would break President Obama's pledge for no new taxes on the middle class.
Bob Martin is emeritus professor of economics at Centre College. Email: bmart@centre.edu.
