eflatminor
Classical Liberal
- May 24, 2011
- 10,643
- 1,669
- 245
@dblack, do you think that this demand will change with the implementation of the health insurance exchanges (part of the PPACA) by 2014? It seems that as healthcare becomes accessible to all citizens, it will become more of a traditional market.
My two cents...
No, the demand will not change. The demand has always been there but the markets have been unable to respond to all customers because of government meddling. State governments, and now the federal government, have been dictating the terms of coverage (trying include everything under the sun) and the prices that can be charged for decades. That kind of central oversight ALWAYS leads to skyrocketing costs and poor results. Even more central planning via the PPACA will not solve the problem. It will make it worse.
Consider the evolution of any luxury good that eventually becomes mainstream: the automobile is a good example. What it was first designed, only the rich could experiment with it leaving the poor to look on in awe. But as manufacturers began to innovate in a way that made the auto affordable to the masses (e.g. Ford), there developed fierce competition centered around appealing to these masses (mainly through improving the apparent price to value relationship). Do you imagine something like this could happen with healthcare?
I do not. You stated the reason why when you wrote: "But as manufacturers began to innovate..." and "fierce competition". While those things did happen in the automobile market, they are prevented from happening in healthcare because of the central oversight. There is little reason for players in the healthcare and healthcare insurance industries to innovate or to strive to be more efficient when the government dictates what will be covered, who must be covered, and what prices must be charged. Also, the federal law requiring private companies over a certain size to provide employee health coverage is a big part of the problem. That should end today!
If we want to see prices drop (or at least stop rising in excess of the rate of inflation), we must allow real competition to take place, accept that some entities will fail, and allow the consumer real choice. If one insurance carrier wants to offer cheap coverage only to healthy people and only for a catastrophic injury or illness, they ought to be able to do that. If another wants to offer coverage with all the bells and whistle to people with pre-existing conditions, that ought to be able to do that at a price they deem reasonable. With today's state departments of insurance and now the federal government, along with the FDA and all the other involved agencies, that is not possible. Innovation and efficiency is therefore severely curtailed.
A free market will fix this, not more central planning.
Last edited: