Get Ready for a Health Care Shortage

President Obama released a new proposal for health care today. You can read his proposal on www.whitehouse.gov. The main purpose of this proposal is to combine the ideas of the House, the Senate, and the Republicans into one…something. I’m not sure if this is a bill that will be voted on, an executive order, or just something to talk about at the bipartisan summit on Thursday. Regardless, it is full of bad ideas.

This ‘new’ proposal will still force ask everyone to buy health insurance. According to the proposal,  ”In order to lower costs for all Americans and extend coverage to people with pre-existing conditions, all Americans who can afford to purchase insurance will be asked to.” (emphasis mine)  It then goes on to say that, “To help bring costs under control for all Americans and cover all Americans with pre-existing conditions, all Americans who can afford insurance will have the responsibility to purchase it.” (emphasis mine) So which is it? Do we “have the responsibility” which implies that we don’t have a choice and will be required to buy health insurance, or will we be “asked” which implies we have a choice to refuse? Orwell would be proud of this kind of doublespeak. President Obama opposed this idea on the campaign trail and many have raised questions on the Constitutionality of forcing people to buy particular products from particular companies. Unfortunately, our leaders in Congress like Nancy Pelosi don’t take the Constitutional concerns about this proposal seriously.   

Be that as it may, the worst idea of the whole proposal is a new “Health Insurance Rate Authority to review and rein in unreasonable rate increases and other unfair practices of insurance plans.” The Health Insurance Rate Authority will basically be a price control panel. What will happen (most likely) is that this panel will set price ceilings on health insurance. Economics 101 tells you that when you put a price ceiling in place, a shortage will occur. This doesn’t mean that we will have less health care resources, it just means that there will be less health care providers willing to provide health care at a price fixed arbitrarily by the government. You need only ask someone who lived through the “gas crisis” of the 1970s. Price controls were enacted and there was a huge gas shortage which led to long lines at the gas stations and some gas stations setting limits on how much gas people could buy. The same thing will happen with health care. Is this what we want? I hope not. What good is having cheap or free health care if you have to wait for weeks or months to see a doctor, get test results, or have a surgical procedure? I would much rather pay a higher price to get medical care when I need it just like I would much rather pay a few more cents a gallon not to wait in line at a gas station.

There may be some good ideas in the President’s proposal, but forcing people to buy health insurance at prices set by the government is the type intrusion that will destroy our health care system. The Health Insurance Rate Authority is the new Death Panel.