During the many months of debate over health care emanating from Washington, D.C., many Americans had the opportunity to hear from their elected officials about the competing health care reform ideas. There’s a great amount of good information that can be found – especially at the websites of organizations like the Heartland Institute, the Heritage Foundation, or the Galen Institute.
Located in Alexandria, Virginia, Galen bills itself as “an innovative research organization focusing on health and tax policy.” Grace-Marie Turner, the founder of the Institute, says it well: “As with any health care problem, it must begin with a proper diagnosis if treatment is to be effective.”
The United States does not have a properly functioning market for health care. Third-party payment systems dominate both public and private sector plans, giving consumers the illusion that someone else is paying for their health care consumption.
With government’s large and growing role in Health Care (e.g. Medicaid and Medicare), taxpayers are very often the “someone else” paying those bills.
Lack of price sensitivity is one of the key drivers in spiraling costs. This also has given political leaders a blank check to enact a mountain of expensive, feel-good health care mandates, regulations, and price controls in various disguises.
Contrary to what we constantly hear in the news, the biggest problem in health care isn’t the fault of doctors or hospitals or drug companies or insurance providers. Instead, it is government tax policy and the resulting evolution away from the basic principle of insurance.
During the 1940s and 1950s, government tax policies began to give incentives to consumers to get their health insurance through their employers. Employers’ contributions to group health insurance plans were no longer counted as taxable income for employees.
This might be great for those who have employers purchasing group plans, but it isn’t for those who do not. Millions of Americans are self-employed or work for small and medium size businesses that don’t have access to the group plans that receive what amounts to a generous government subsidy.
Then as demand for health care increased through the years, insurance policies moved away from covering just large or catastrophic costs to becoming a pre-payment plan for routine services. A simple comparison is that if auto insurance were like health insurance, regular car maintenance would be insured and not just accidents.
Grace-Marie Turner says we need to:
…inject some sanity into the system by engaging the power of consumers to force efficiencies in the health sector, as they do in other sectors of the economy, by demanding the best value for their money.
Without addressing tax policy in the health care reform debate, skyrocketing premiums and increasing taxes will continue.
Now, unfortunately, an extra step must be added to the above: the repeal of ObamaCare.
To learn more about the mess that is ObamaCare and the need to repeal it, follow these links: