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Health Care / Free-Market Reform

Bureaucracy for the Uninsured

By Sarah Brodsky on May 22, 2007

Rep. Jo Ann Emerson says she wants her plan for government-run health care to be "driven by the private sector":

"I don’t want a government health care system. What I want is a system to insure all Americans through the private sector. People can’t afford health care today, so we’ve got to make it affordable," said Emerson, a Cape Girardeau Republican.

From this very simple premise came Emerson’s fascination with a universal health care proposal by Sen. Ron Wyden, D-Ore., an unlikely ally for the typically conservative-minded Emerson.

The article continues with the gory details of Wyden’s plan–mandatory insurance, even more extensive regulation of insurance companies, taxes to subsidize insurance for large segments of the population.

There are two main problems with this idea. First, if you overwhelm an industry with regulations and rules, the private sector might just disappear. When I started writing a blog post about Amtrak a few weeks ago, I was under the impression that private companies were not allowed to compete with Amtrak. My coworkers set me straight: private passenger trains are permitted, but there are so many requirements about where they run and how they operate that no private company would want to be in the business. Emerson says she wants to involve the private sector and competition, but her plan would probably narrow the choices down to one easily derailed AmHealth.

Second, there’s no free lunch. Some people are expensive to insure because of preexisting medical conditions. A complicated system of taxes and subsidies won’t change that. But for those people, paying for health care directly might be a better idea than going through an insurance company. The purpose of insurance is to protect your property in case of unforseen expenses–not to cover expenses you already know about.

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Sarah Brodsky

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