Sunday, September 13, 2009

Health Care Reform – A Step Towards a Welfare State?

Health care reform is necessary and should be implemented soon. To my knowledge, no one is arguing that reforming the system is essentially a bad thing. Instead much of the controversy lies in how it is reformed. Any reform, however, should be discussed and debated thoroughly by both sides of the aisle since each side touts valid points.

A good portion of the opposition to the current reform has been focused on the non-transparency of the process, and the sudden rush to just “do something.” With a proposed bill of over 1,000 pages, not including the thousands of amendments that will certainly follow, it is imperative that our representatives have sufficient time to know what they are signing into law. They must understand the long-term implications of such a move since it will likely comprise 1/7th of our nation’s economy.

Another reason this must be debated thoroughly is because health care reform will undoubtedly include entitlement programs, where individuals will receive free services simply by having a valid social security number – and possibly those without a social security number. Reversing government entitlement programs is an incredibly difficult task. Recipients eventually feel “entitled” to those free services and ultimately rely thereon for their livelihood instead of being personally responsible – the ‘give a man a fish, or teach a man to fish’ principle comes to mind. Little by little, government entitlements create a “welfare state” where the government assumes the primary responsibility for the welfare of its citizens.

I am generally opposed to government entitlements since I believe personal welfare is an individual responsibility that should not be shouldered by others. In my opinion, government entitlements tend to harm the individual more than help because labor and enjoying the fruits of one’s labor are blessings from the Lord, and an essential requirement in our eternal progression. I firmly believe that nothing destroys the individuality and freedoms of a man as much as the failure to be self-reliant.

Obviously there are several exceptions to this, for example, individuals who lack the physical or mental capacity to survive without the goodwill of the people. In those cases, entitlements serve a valid and needed purpose. Nevertheless, those who have the means to provide for their own welfare and yet seek a free ride are, in essence, restricting their own freedom and the freedoms of those who pay the price. The following quote by Howard W. Hunter explains:

What is the real cause of this trend toward the welfare state, toward more socialism? In the last analysis, in my judgment, it is personal unrighteousness. When people do not use their freedoms responsibly and righteously, they will gradually lose these freedoms…

If man will not recognize the inequalities around him and voluntarily, through the gospel plan, come to the aid of his brother, he will find that through ‘a democratic process’ he will be forced to come to the aid of his brother. The government will take from the ‘haves’ and give to the ‘have nots.’ Both have lost their freedom. Those who ‘have,’ lost their freedom to give voluntarily of their own free will and in the way they desire. Those who ‘have not,’ lost their freedom because they did not earn what they received. They got ‘something for nothing,’ and they will neither appreciate the gift nor the giver of the gift.

Under this climate, people gradually become blind to what has happened and to the vital freedoms which they have lost." [Speeches of the Year 1965-1966, pp. 1-11, “The Law of the Harvest.” Devotional Address, Brigham Young University, 8 March 1966.]

Of late, it seems as though we are losing our freedoms through the democratic process. More and more people are choosing the easy way out instead of properly sacrificing like our predecessors had. As a result, the ‘haves’ continually lose their freedoms by being forced to be charitable, and the ‘have-nots’ become more and more complacent and apathetic.

I truly hope that our elected officials view any reform to our health care system through the lens of self-reliance and the blessings that inevitably will come when one earns their bread by the sweat of their own brow.

21 comments:

Evgenii said...

A quick hypothetical. Would you agree to short term insurance coverage for a limit of 18 months until someone is presumed to have enough time to find something else? What about programs like WIC?

Another Ev said...

I don't believe there is legitimate "concern" that those who benefit by health care reform should be protected from losing the freedom to be grateful for blessings. Call it what it is: A mask for the selfishness of maintaining the status quo.

I haven't been able to get medical care in years, because without children I don't qualify for any state aid, without benefits I don't get insurance through an employer, and with private insurance rates being what they are, I can't pay 47% of my annual income in premiums, which is the best rate I have been able to find so far.

And you're really so fearful that I might not be grateful for the opportunity to be checked out for the dizziness and blurred vision and tingling left arm I feel *every* *blessed* *time* I stand up? You're protecting me from getting something for nothing?

Bite me.

Jeremy said...

Thanks for commenting Another Ev.

Obviously you are quite passionate since you are affected on the front lines. In view of honest debate, there is no reason to be crude.

As I stated in my post, no one is arguing that health care reform is a bad thing. Clearly something has to be done to account for situations like the one you find yourself in.

However, at least one point of my post was that it seems as though a general apathy has come over a majority of Americans. As a people, we may not anymore be willing to make the same sacrifices our forefathers made to enjoy the freedoms they earned. Instead, the democratic process is used to pander to those unwilling to work for their keep, and as a result, entitlement programs are instituted.

In no way did I implicate or intend to include in this group those willing to make the required sacrifice.

Another point I tried to make is that simply giving people health care, or anything for that matter, is never a good thing. One may argue that premiums will be required by all under the proposed plan, but there is a strong argument that it will eventually become unsustainable and we will end up with another government entitlement program that we cannot reverse.

There are plenty of other options being circulated that would avoid thrusting people into a dependency relationship with the government. Sadly, however, it seems as though they are falling on deaf ears.

Anonymous said...

Ev,

Who's selfish...the one who expects that they deserve to be cared for on the backs of others, or the others who are trying to come up with a wise solution to avoid a slippery slope?

Further, how is your problem my emergency? What if I want to be selfish? Do I not have that right?What makes you think I have to pay for your blurred vision? How many hours should I have to spend away from my family to do it? I already work 3-4 months out of the year FULL TIME for the gov't. At what point is it too much? Full enslavement?

Bite me.

Do you think it would be okay for you to walk up to a rich person and hold a gun to them and say "pay for my Dr. appointment"? That is no different than what you are proposing except the gov't says "pay for this or go to jail." I'm sorry, but it is a freedom issue whether you want it to be or not.

(Although the more accurate analogy is that you are telling my/your children and grandchildren yet to be born to pay for it or go to jail...which is actually worse)

It isn't about greedy big businessman X, or greedy insurance exec Y anymore. The gov't takes too much from even the middle class, and in return we now have unsustainable debt and a dark forecast. Their inefficiencies/corruption cannot continue if freedom is to continue.

Sam said...

Okay, I'll bite. No. The proposed plan does not take us closer to your so-called "welfare state." Why not? Because that phrase has absolutely no meaning--it's pure jargon meant to denigrate without describing. As best I can tell, it means the government should help only me (because its help to me is invisible/long-established/something) and that it shouldn't help you.

What is the material difference between the government's helping somebody with health insurance, its providing a court system that allows businesspeople to enforce private contracts, or its provision of roads? All three eat up governmental revenue. Both primarily benefit a small group of people (in the first case, people who can't afford health insurance and, in the second, people who make contracts sufficiently large as to need their enforcement, and in the third, people with cars). And all three provide externalities that benefit people other than the direct recipients.

I fail to see how comprehensive health care reform panders to those unwilling to work. Quite simply, the current system has failed. You may extol free-market capitalism, but the health care system lacks most, if not all, of the hallmarks of free-market capitalism: there is no competition on price, billing and price are not only difficult to interpret, but are often opaque, and there is a virtually unresolvable information asymmetry. There's very little to recommend the current system.

Jeremy said...

Sam, one of main reasons there is apparently no competition on price is because insurance companies have their hands tied by government oversight. If they were allowed to compete across state lines, that would make a whole new competition game. This is but one of the many suggestions of reform without giving a handout.

How does "welfare state" not mean anything or is not descriptive? A welfare state means just that, a system where the state is responsible for the welfare of its people.

I never said that "comprehensive health care reform panders to those unwilling to work." Comprehensive health care reform is a good thing, and clearly does not require a system of unsustainable entitlements. However, when the proposed reform includes entitlements for the sake of political gain, such as re-election or appeasing constituents, that is prima facie pandering.

By the way, the litigants in a dispute are required to pay court fees; these costs are generally not shouldered by the taxpayer.

Nate said...

Sam,

Well-reasoned argument, but I respectfully disagree. There is definitely a such thing as a welfare state. I've seen people on government assistance go out and buy cars that they don't need because they would otherwise have too much in bank assets and would lose government insurance and food stamps.

This phenomenon of working hard to not work is too common and should be discouraged.

There is a very large difference between healthcare and the courts. Taking your contract example, if there is no way to enforce a contract it would either have a chilling effect on commerce that would hurt us all immensely (what if no one in society could trust each other on anything?), or they would be enforced vigilante-style and would cause a general breakdown in an ordered society.

That is actually the primary justification for tort/contract law going back hundreds of years before the US even existed--people dueled to the death over farm water...not very conducive to liberty.

On the flip side, no such thing happens without government guaranteed healthcare. People aren't shooting people to get treatment in an ER. In fact, by law they must be treated.

Last, you pinpointed the problem and missed the solution. Free-market capitalism doesn't exist in the current healthcare system.

I can't go outside my employer and shop around because premiums instantly get 25% more expensive because I lose tax benefits. Further, I would not be able to use my pre-tax flex spending account for my medical bills. Hence, the provider at my employer only has to compete with other providers for other employers, instead of with millions of individuals.

I'd leave my provider in 2 seconds if I didn't lose most of any potential savings to taxes.

Additionally, many states have prevented larger pooling across state lines, which creates artificial barriers to competition. This has been explicitly authorized by Congress and is a very rare phenomenon. In fact, when states try protectionism, it is struck down under the commerce clause.

The government is the problem. Capitalism didn't fail...it wasn't allowed to come into play.

Sam said...

Hey Jeremy and Nate, sorry that work got in the way of my responding.

You're both right that the assertion that there is no such thing as a "welfare state" is inaccurate, and it's basically what I said. What I meant, though, was that the term has no meaning; "welfare state" is used, not in a technical or broad sense, but instead to disagree with specific entitlement programs while ignoring others.

A couple specific responses: sure, public enforcement of contracts may have arisen to prevent destructive self-help solutions to problems, but the fact that contract enforcement is old doesn't make it qualitatively different than any other government-provided benefit. Nate, you argue that the self-help isn't conducive to liberty. True, but neither is being chained to a particular job because you can't lose your health insurance; disease is at least as harmful to general liberty as dueling. In fact, dueling is technically exercising your liberty, where getting sick is not,

And Jeremy, litigants may bear certain court expenses, but filing fees and the like are inconsequential; they don't (at least on the federal level) even begin to cover court administrative costs, not to mention salaries, etc. Court fees pretty much serve to discourage frivolous litigation. Courts are definitely funded principally through tax dollars (again, at least on the federal level; some states may function differently).

And Nate, you certainly can shop around for insurance. You will pay more, yes, but there's no reason you couldn't pay less. And, while I admit to not being much of an expert on insurance companies, I doubt that regulation really affects them. (In fact, without regulation, most insurance companies would essentially be hedge funds, minimizing their coverage while maximizing their investment portfolio.) The Planet Money podcast has done an interesting series about the economics of health care; basically, nobody (including insurance companies) is significantly incentivized to reduce costs.

I'd say more, but dinner's ready, and some things are truly important.

Jeremy said...

Thanks for your response, Sam. We can at least agree on your last comment.

Thanks for stopping by.

Anonymous said...

Jeremy, the reasons there's no competition in price in the health insurance industry is because of monopolistic power of a few companies. It has nothing at all to do with regulations. OK, challenge. What regs are reducing competition in the insurance industry?

Oh, and that car thing? I.e., you seem to think that poor people are buying more expensive cars than you approve of, there are hard limits, including how much a family car can be worth on assets for any sort of governmental help, and it's not very high.

Nate said...

Anon,

No, I dissaprove of poor people spending money that they didn't need to spend in order to fix the books and make them qualify for aid they don't need. I was friends with these people...they didn't need the car. They did need their bank account to not have $3000 in it so they can get food stamps. Maybe I'm being silly, but 3K can buy a lot of food.

And I very much know what it is like to be poor...don't worry about that.

Name Regs: There are many and I've already named one, the Tax code. This is what forces insurance to be tied to our jobs. If it weren't for the current tax system I could and would change to cheaper insurance right now. Common sense will tell you that if consumers did that enough, my current employer-based insurance would have to compete.

Jeremy said...

Anon, these regulations are not anything secret or new. While I'm not going to search state-specific statutory code, they can be found if you do a bit of Google searching in your own state.

The regulations force members of a state to buy insurance within their state which contains all the benefit mandates and benefit regulations imposed on them by their state legislators.

For example, Minnesota families are forced to buy a health plan that contains 62 mandates, while a similarly situated family in in Idaho can buy a plan with only 13 mandates. As a result, plan premiums are drastically different.

Another example - a New Jersey family HMO costs approximately $1,652 per month, while a Pennsylvania family HMO will only cost around $707 per month.

It is my argument that the Insterstate Commerce clause of the Constitution should allow families to buy health insurance across state lines. But this is not permitted since each state is regulated differently.

Anonymous said...

Here in Australia, we have both private insurence and Government run. I am in the Gov system, I pay 2 percent of my income to the Government. With that I get free hospital, none or a little copayment at the doctor's surgery. I go once a year for a check up and blood test. The money I pay in the system helps those who need to go more frequently. Is not this what Jesus would want us to do? Care for the needy through universal health insurance

Jeremy said...

Anon,

Thanks for the comment. Jesus indeed did teach us to look out for our neighbor and help those in need. However, he never forced anyone to do so; it was always a choice for the individual. In fact, removing that liberty from an individual is the direct antithesis to the Gospel of Christ and may very well be considered "evil" in many respects.

Furthermore, Christ's philosophy centered around helping those who help themselves. Faith and works are required on the part of the individual. The proposed health care plan would create entitlements for a large percentage of the U.S. population that is complacent on receiving a free handout. Many of these individuals admittedly have no plans on removing themselves from this impoverished situation, but insist upon allowing others to work for their benefit.

With the proposed health care reform being debated currently in the U.S., our power to choose would be severely curtailed. We would be forced to contribute where it may or may not help those in need. I think those in need should be helped, but they should not be helped to their detriment, nor to those around them.

Thanks for stopping by.

djinn said...

Jeremy, if insurance companies are allowed to cross state lines, then all of the insurance companies will suddenly be headquartered (or whatever it takes) in the state with the most liberal regulations that allow them to make the most money and that cost you the most money. We know this because we've seen it in the past. Delaware. Corporation headquarters. Credit cards.

Go public option! That's a choice for actual competition. Go!

Jeremy said...

Welcom back, djinn. I disagree that a public option will be "actual" competition. It sounds good, but how can insurance companies compete with the unlimited resources of the government?

There may come a point where the government is forced to reduce their pricing by the will of the people. If private insurance companies want to survive they would be required to match that - even if that meant dropping below profitability. If they drop below profitability, the companies have only 2 choices - close up shop, or refuse more and more claims, neither of which are good for competition.

We have analogously seen this in the steel industry. Once the Chinese government began subsidizing steel production in China, global steel prices plummeted dramatically. China wasn't making any money on their steel, in fact they were losing a significant amount. However, the effect was severe. America's private steel manufacturers could no longer compete at those reduced prices, therefore, the majority (maybe all by now) shut down.

On your other point, companies decide to incorporate in Delaware because of the tax benefit and knowledgeable court systems. No competition between companies is involved there - it's just simply good business sense to save money on taxes. These businesses, however, including, for example, WalMart, K-Mart, Target, etc, compete vigorously throughout the U.S.

djinn said...

Similarly, it's good business sense to charge the most possible for insurance while providing the least. The state that allows this most effectively will win. Health care is not like Walmart tools or toilet paper. It's much more opaque for a consumer. Plus, when it's your health (or that of a loved one) on the line, how do you manage to make decisions based on price? How do you figure out the price, for starters?

Jeremy said...

djinn, so your argument is based on the premise that people are too ignorant to see the disparity in health care costs? That people wouldn't realize that they could get the same service for cheaper by searching out the cheapest option?

If businesses charge more for less, I have faith in the American people that they will discontinue their patronage of such businesses, and instead go where cheaper services can be had. This recently happened for me in my car and auto insurance.

A perfect example of this is in the unregulated-industry of plastic surgery. At first costs were astronomical, and only the rich could afford such luxuries. Now, through the 'magic' of unregulated capitalism, plastic surgery has made leaps and bounds in technology and costs have been driven down significantly through "healthy" competition; competition that does not include the intrusiveness of the government.

Health care insurance may not be as transparent as hand tools, as you suggest, but if that is the case, then why not help people understand their insurance instead of entering the market to set insurmountable standards for capitalism?

Greg said...

Hey Jeremy - thanks for pointing me to this post on my blog. I thought you and your readers might enjoy my post on the History of Socialized Medicine. While we may quibble over the particulars of the reform bill, it is often helpful to trace the history of these type of things.

Trevor said...

Socialism -including federal government run healthcare- can and should be stopped.
I attended a Tea Party meeting last night and was very impressed. President Bensen would approve I'm sure. They teach lessons from The 5000 Year Leap by Cleon Skousen on the true history and intent of the Founding Fathers of the United States of America. We heard platforms for candidate for House and a few words from a candidate for Senate Chris Simcox (founder of the Minutemen)and next week a candidate for Governor. The Tea Party is responsible for the astonishing election of Scott Brown to the Mass. Senate seat recently. I urge all patriots and lovers of freedom to check this out and get involved!

Jeremy said...

Trevor, I've also been to a few Tea Party events. I'm impressed with the calibre of people attending and their thirst for honest politicians. There are now more independent voters than Democrat or Republican, and most of the Independent voters are from the Tea Party movement.

My fear, however, is that politicians will start pandering to the Tea Party groups and it will be business as usual fro them. Hopefully we can see through any guise of untrustworthy politicians who claim to have the ideals simply to win our support.