Friday, October 30, 2009

I prefer the term "government takeover of health insurance at gunpoint"

Public option: Treatment worse than the disease
The bill may also include a "public option," government insurance that would compete with private insurance.

The underlying presumption behind this legislation is that government health insurance should be expanded to cover the uninsured.

This presumption is wrong. Government should not subsidize health insurance -- for the uninsured, the poor, the elderly or anyone else -- or regulate health insurance markets. Here's why.

Subsidizing health insurance means that patients and doctors are insulated from the costs of health care, so they utilize too much -- often in the form of unnecessary tests or medical procedures whose value hasn't been proven. This excess demand, along with technological progress, means rapidly growing deficits, so governments limit reimbursements to health providers or ration care. This kills innovation and creates its own inequities. The taxes necessary to fund subsidies are a drag on economic growth.