Saturday, May 7, 2011

Government Intrusion Distorts the Marketplace

Jeffrey Miron asks, Should Government Subsidize Health Insurance?

I say no, based upon real-life examples.  Government heavily subsidizes higher education, and Big Ed keeps demanding more...
“A good rule of thumb is that tuition rates will increase at about twice the general inflation rate.  On average, tuition tends to increase about 8% per year.” ( FinAid – Tuition Inflation)
Government already is neck deep in health care, to the point it doesn't even resemble a free market anymore...
“The cost of hospital services, which grew by 1.1% in March and 8.6% in the last 12 months, almost quadruple the 2.3% increase in the overall Consumer Price Index for the same period, the Bureau of Labor Statistics announced today.
The rising costs of virtually every healthcare-related index have easily outstripped overall CPI for decades.”  (Health Leaders Media – Medical Care Outstrips Inflation)
Government subsidizes the sugar industry, and we all pay more.  Government subsidizes ethanol, causing the price of everything to skyrocket and touching off food riots worldwide.

I'd say we've had about all the government interventions we can stand...


Always On Watch said...

I noted this week in the Washington Post that federal employees can partake right now in open season for long-term care insurance.

Get ready for nursing homes to be affordable only for those with such government policies, policies those not employed by the federal government cannot get at anywhere near the same price.

When Mr. AOW was in the nursing home, the social worker actually said to me when I refused to entertain the notion of using Medicaid, "Don't you have long-term care insurance? ISN'T THERE A POOL OF MONEY WE CAN GET? I. Kid. You. Not.

Only via the threat of litigation and the help of my family doctor did I manage to get Mr. AOW out of that nursing home!

Fredd said...

Yeah, once the gubmint creates that 'pool of money,' (in order to bring prices down, of course), invariably the invitation goes out to every social program ever conceived to dive into it.

Silverfiddle said...

It distorts the market, and people's thinking as well.

This is a progressive goal, to condition the masses to look to government first, and it has worked.

Try any other way and you are swimming against the tide.

You're a tough gal, AOW!

Always On Watch said...

You're a tough gal, AOW!

Some people substitute another, less flattering word for "gal."

Christopher - Conservative Perspective said...

This hair-brained scheme can be illustrated easily with the auto industry,,,,,

The government went ahead and subsidized General Motors with taxpayer monies and look at the price of the Chevy Volt. To top it off, the government has to once again subsidized the actual purchase of the car with yet again with more taxpayer money.

This is what I deem 'trickle-up economics' in that the only ones that buy the Volt are well off enough that they don't need to but are receiving money from those who have little and cannot even afford to dream of a new car right now.

The above is much the same as 'Cash for Clunkers'.

Country Thinker said...

I have a wife in health care, and all I can say is that you are only touching on the tip of the iceberg when it comes to the myriad of ways in which government distorts the health care market.

Silverfiddle said...

@ AOW: "Some people substitute another, less flattering word for "gal.""

LOL! I would never call you that, but it is a testament to your toughness.

Silverfiddle said...

Country and AOW: And the sad thing is, if government got out of the way and let the free market go, care and services would get cheaper.

How am I so certain? Because the opposite has never occurred.

One quick positive example is the Bell breakup. Phone service prices continue downward while service quality and options increase.

Jersey McJones said...

So, Silver, are you suggesting we just get rid of Medicare? That's the biggest government intrusion ine the healthcare market. Then there's the VA. Then some other things. And what do you say about states and counties and cities and town that support their hospital systems? Would you force them to end that? Rememeber, healthcare is a massive institution that runs through all levels and locales of government.

Are you saying get rid of all that and just trust the private insurance sector, one of the sleaziest, lowliless, scumiest, theiving bunch of scoundrels around. Leeches. Pointless leeches. People who gamble other people's lives for profit. If Dante's right on, there's a special place in hell for them. We don't and never will have a real need for the private health insurance industry. They add no value to the product. Leeches.

Ad you're saying we trust them over ourselves and our government of, by, and for the people?



Silverfiddle said...

Yes, Jersey. That's what I'm saying. You're quick.

Jersey McJones said...

Only quick enough to ask.

So, what is your alternative?


Silverfiddle said...

There are lots of alternative ideas out there. Go read.

Step 1 is deregulating insurance in exchange for setting some iron rules such as no "catastrophic caps."

ending overuse of insurance is another. Go to the doctor, pull the money out of your pocked to pay for it. This rationalizes the market by making consumers realize the true cost.

There are also ideas of catastrophic pools or extra riders on policies to take care of that 1-2% or so who become uninsurable.

Point is, we are not a one size fits all nation, but we are still saddled with a 19th century government that takes a cookie cutter approach to everything.

Anonymous said...

Maybe it is time to out source government.

Country Thinker said...

JMJ: I've nejoyed reading your comments, and I enjoy them - and I mean that seriously.

I agree that there are some sleazy insurance companies out there. My wife, for example, despises dealing with Humana. That said, the federal M/M programs lose more money to fraud than health insurance companies make in profit, and they don't cover nearly as many patients, so government health care is sadly a subsidy for criminal behavior.

The worst part of the health insurance industry flows from their tight relationship with - you guessed it - the government. Insurance isn't portable across state lines because - you guessed it - the government won't allow it.

The funniest thing is when folks complain about the "obscene" profits insurers make. But premiums are set in accordance with state laws (there is a set maximum percentage of premiums that can go to profit), so the profit they make is set by - you guessed it - the government!

I don't like private health insurers. I like government insurance even less. These opinions are largely based on the experiences of my wife, who has been in health care for almost 20 years.

Silverfiddle said...

Country Thinker: Thank you for chiming in.

The common factor here is government intervention.

Would insurance companies, in a truly free market, be able to get rich screwing the consumer? I don't think so.

On a related note, see how Walmart brought down prices on generic drugs?

98ZJUSMC said...

It distorts the market, and people's thinking as well.

This is a progressive goal, to condition the masses to look to government first, and it has worked.


is the reason we will go through hell getting this whole situation back on track.

Well stated, sir.