Today, the Republican side of Congress tries again to pass its health care law, a not much better named AHCA (vs. ACA).
Hopefully, you’ve taken time to review the bill’s major thrusts, if not the whole bill (few have either the time or the spare brain cells to read the entire document).
You probably have your opinions already set. I don’t want to argue merits or drawbacks. That ship will be back in dock if it makes it to the Senate.
I do, however, want to discuss a major “positive” that seems to be the linchpin of the whole law: free market competition.
Republicans love free market competition. Or, more precisely, they love to use the term “free market competition”, as if it’s a panacea for all that ails any problem.
Except, the argument is bogus and misleading. And the misleading part if filled with buckets and buckets of irony. Let’s tackle that part first.
The suggestion that everything you buy today is cheaper than it used to be (relatively speaking) is often used as an example of pristine free market competition making your life easier.
Do you know why you have cheaper cars? Because of the Japanese imports decades ago that eventually ran better and with less problems than American cars…at a lower cost.
Do you know why you have cheaper electronics? Because of various Asian products that drove domestic manufacturers to either lower their prices or create innovations people would be willing to pay more for.
I can offer more examples, but the illustration is plain: competition isn’t what drives cheaper products; cheaper products are what drives cheaper products.
Do you think we’re going to see imported health care services, hospitals or prescription drugs (well, okay, you can get some of the last over the internet)? If not, what will possibly drive down the price of health costs?
Of course, the irony of the above is that Mr. Trump has threatened huge tariffs on those same cheaper product nations. If those products prices go up, what do you think happens to competition? Doesn’t sound so Republican to me.
Which brings us to point one above: It is bogus to claim competition will drive lower prices in health care.
Insurance companies make money when you don’t make a claim. Your house, your car, your property and your health. Ever get cancelled from AAA Motor Club for too many “free” calls? Ever see your car insurance go up for even the smallest claim?
So why, in all rationality, would anyone believe that health insurers would want to lower the price for people who are actually going to make a claim?
Oh, sure, prices will go down…for people who are healthy, with no pre-existing conditions and who probably don’t want insurance anyway.
The rest of the people will go into “pools”. These will not be beautiful Olympics pools. These will be the pools with leaves and bugs and algae on the sides. Those pools cost a lot of money to clean and they’re going to cost people a lot of money to be in.
Insurance companies are given “person” status in law, but they are not people. They may have donations and programs for charity but they are not charitable. The reason they are leaving the current law (ACA) is that they are not making enough money.
They’re going to make a whole lot on the new law. For those who can afford to use it.
Let me be clear: it takes true competition, the introduction of low-cost competitors, to effect a drop in consumer prices. Anything other than that generates a drop in corporate profits and your health be damned before a CEO lets that happen.
Whatever issues you have with your health care now, the struggle will continue with this new law, at least as it currently stands.