The Impossible Task of Centrally Planned Health Insurance

The fundamental truth about an individual’s health is that it is their daily choices that determine weather it is good or poor. Things like insurance coverage, medical technology, or the promises of politicians have a small and limited effect. Any effort to offload that responsibility diminishes the individual’s incentive to be in control of their own health. Thus, centrally planned healthcare is impossible in the long run.

Over 80% of all medical spending in the US is on treating chronic diseases that are the result of poor lifestyle choices. Chronic disease includes heart disease, cancer, diabetes, arthritis, respiratory disease, and oral conditions. 20% of all medical spending comes from 1% of patients; many of which suffer from three or more chronic diseases.

The government has been exerting its massive gravitational pull on the healthcare industry for a long time now. Its collectivized health programs and spending has increased continuously since their beginning. Even with all the spending the Federal Reserve has enabled and evasive micromanaging, chronic diseases are on the rise and imposing massive costs. It is no secret that Medicare and Medicaid are doomed. There are just too many baby boomers who love chugging 2 liters of Diet Coke a day and children raised exclusively on chicken nuggets.

As of 2010 the Robert Wood Johnson Foundation found that 28% of Americans have two or more chronic conditions and they adsorb two-thirds of healthcare spending. By 2030 the number of Americans with one or more chronic condition will increase by 37% or around 46 million people. They found that 54% of people with chronic conditions have private insurance, 20% have Medicare, and 11% have Medicaid. They also found that in Medicare over two-thirds of expenditures are on individuals with five or more chronic conditions.

Estimates say that 54% of the US population has private insurance and 31% have some sort of government coverage. Despite this, the government is responsible for up to 56% of all medical spending in the entire US and as I described above, most of that spending is on preventable conditions that people voluntarily impose on themselves.

Now that we have all the numbers out of the way lets get back to my main point. We can all agree that the personal choices of the people around us are having a large impact on healthcare spending, especially in public programs. Obesity is a huge problem that is only getting worse. People still smoke. Many people lead inactive lives. People are eating poorly and ingesting huge amounts of high fructose corn syrup and buffalo wings. For the love of God, millions of people are watching Duck Dynasty. How can it be moral or sustainable to force taxes onto people to pay for the personal choices of their neighbors? Our government programs have turned into subsidies for those that refuse to take care of their bodies and we all know what happens when you subsidize something: you get more of it. If you even try to lessen the budget busting expenditures the benefactors of these programs will scream bloody murder. They will literally create campaign ads showing a shadowy man pushing an old woman in a wheelchair off a cliff. And that, boys and girls, is how a bloated government program gains immortality. The worst part is that it’s all done with a gun to the taxpayer’s head.

People are usually held accountable for their actions. If you enter into a contract you are expected to honor it. If you steal from your neighbor you are punished. If you cause a car accident you are responsible for the damages and might even face criminal charges.  In the realm of healthcare we have it backwards. If you choose to eat poorly and neglect physical activity you can demand that your neighbor pay for your medical expenses and no one is allowed to call you out on it that shit. If someone does point out the injustice of the situation they are shamed and called barbaric. Is this part of that “social contract” that we’re all in on, but nobody consented to? In the age of the internet there should be no excuse for not knowing the results of poor lifestyle choices. Not knowing that you are merrily skipping down the path to diabetes, hypertension, and high blood pressure is the fault of the individual. This system of subsidization lessens the negative financial and personal effects of people’s choices and thereby allows more people to make them. I would argue that this is part of the reason for the increase in chronic illness in our society.

There is one more point to consider. What are the possible consequences of our progression towards an increasingly centralized healthcare system with the government doing most of the spending? Since the financial burden is being placed on the government people will feel less connected to their state of health. If you don’t have to pay for your own medical care then you are less likely to take actions to avoid the need for it. I think the presence on chronic deceases in the US will increase over time in proportion to the extent that the government pays for healthcare. The the increased rates of chronic decease will drive more government spending. Thats a nice feedback loop for politicians that like to spend our money. Eventually, budget gimmicks and money printing won’t work anymore and cost control measures will have to be put into place. At that point I imagine that the politicians will move their gaze from the smoking creator of the healthcare industry onto us. They will conclude that they need to control our diets in order to reduce the burden on the system. They will claim that diet is one of the biggest factors for good health, which is obviously true, and use that as their justification for regulating our digestive system. Maybe Mayor Bloomberg is just a little ahead of the curve. The government already has a huge influence in what food makes it to the table; they restrict sugar imports, they subsidize corn, they pushed the low-fat craze for the last 30 years or so, they put out the food pyramid, which is basically a recipe for diabetes, the FDA decides what we can and cannot eat, along with many other interferences. The only logical next step is to force us to buy broccoli… I’m sorry, I mean tax us for not buying broccoli (You see what I did there? That was an Obamacare joke). When you give the government responsibility over health outcomes, don’t be surprised when they start telling you how to live and what to eat.

When you relieve people of their responsibility to look after themselves you remove their incentive to do so. Especially if you relieve them of the financial effects of their actions. It becomes a tool for politicians to bride voters. It becomes power that can be purchased by big businesses and special interest groups. Centrally planned healthcare is the illusion of a solution. The state may assume power, authority, and spending for health insurance, but it is the hundreds of choices an individual makes in a day that determines their health. No amount of laws, departments, guns, and bureaucrats can change that. Well, unless we’re cool with a prison state. The only moral and realistic answer is a completely free market where individuals are empowered to choose what is in their best interest and face the consequences of those choices.

Live Free

Sources:

What is the single best thing we can do for our health?
http://youtu.be/aUaInS6HIGo

Robert Wood Foundation findings:
http://www.rwjf.org/en/research-publications/find-rwjf-research/2010/02/chronic-care.html

Who’s to Blame For Our Rising Healthcare Costs?
http://www.forbes.com/sites/realspin/2013/04/03/whos-to-blame-for-our-rising-healthcare-costs/

The Power of Prevention
http://www.cdc.gov/chronicdisease/pdf/2009-power-of-prevention.pdf

It’s official: Obamacare debuts with more canceled plans than enrollments
http://dailycaller.com/2014/01/01/its-official-obamacare-debuts-with-more-cancelled-plans-than-enrollments/#ixzz2qxTI6GAp

Employment-Based Health Insurance 2010
http://www.census.gov/prod/2013pubs/p70-134.pdf

Health care spending in the US
http://en.wikipedia.org/wiki/Health_care_in_the_United_States

Health insurance in the United States
http://en.wikipedia.org/wiki/Health_insurance_in_the_United_States

Health Insurance Coverage of the Total Population
http://kff.org/other/state-indicator/total-population/

Image via Flickr/Tax Credits

One comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s