01 Oct 2009 Competition, Not Government Intervention, the Right Prescription for Health Care, by Ak’Bar A. Shabazz

Unless you’ve had your head in the sand during the past few months, you know our nation has been engaged in heated debate over the direction of health care reform efforts.

Health care costs have skyrocketed by 300 percent – adjusting for inflation – over the last decade.  It’s about 16 percent of our economy.  But, at this rate, the National Bureau of Economic Research says it will nearly double to an estimated 29 percent by 2040.

Despite increasing costs, complaints abound about deceasing services.  Insurers are criticized for denying coverage to those who have paid for it or refusing coverage to those with pre-existing conditions.

Half of all home foreclosures in the country and 62 percent of all bankruptcies in 2007 reportedly occurred in part due to the competing costs of a medical condition despite having insurance. 

People are finding unexpected and infuriating problems when they get sick and try to use their health care insurance.  After dutifully paying for years, people are shocked to find just what and what is not covered.

At the same time, they are finding out about lavish salary packages for health insurance executives.  For example, the CEO of United Health Care – Stephen Hemsley – makes a salary equivalent to $464,000 each day, not including pension and bonuses.

Can this problem be fixed?  There is a wide partisan gulf regarding possible solutions.

Liberals favor of a “public option” in which the federal government is tasked with providing competition enough to keep the insurance companies honest.  Can bureaucrats do this effectively and efficiently?  That’s a good question.   

There are conservatives who don’t believe there is anything wrong, but others have ideas.  Some suggest changing laws to allow people to buy insurance across state lines.  Others promote “co-ops” that would allow smaller business to consolidate their buying power and give them the ability to purchase insurance at rates equivalent to larger corporations.  This, however, doesn’t ensure policies get paid when needed or costs will stay manageable. 

Something needs to be done to ensure Americans actually get what they pay for.  Based on examples such as the DMV and the Post Office, it’s unlikely the federal government can provide an efficient solution that Americans would be willing to pay for – if they get a choice.  Most Americans also do not want “welfare type” health insurance. 

How about promoting competition?

This is America.  Our country was built on the fundamental principle of supply and demand.  There is no reason this cannot be applied in this case.

With only a handful of companies truly in the American insurance market today, there is tremendous demand but no real supply-side competition. 

Let new players into the game.  Allow international companies to get involved if necessary.  If the government must be involved at all, let them simply set the ground rules and allow companies to compete in similar fashion to a standard bid contract.  There is no need for federalizing our health care.

When the most qualified and lowest bidder wins – so do Americans.  People can keep their existing providers.  Additional providers might provide new and possibly revolutionary means of coverage.  Rates should drop tremendously due to these increased options. 

We should also allow Americans to purchase their health insurance a la carte for specific levels of coverage.  Someone with a family history of diabetes can get that covered, while others with cancer in their family can get coverage specific to them.  The young and healthy can choose a basic plan such as coverage only for accidents.  

Maintaining the status quo, however, is no solution.  We need to protect Americans’ lives and wallets by ensuring a multitude of options are available and consumer quality is ensured. 

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