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Collectivizing Healthcare Costs Won’t Make Health Better
By Rep. Ron Paul
The administration’s terrible healthcare “reform” bill is now law, but the debate over how—and whether—the federal government should be involved in providing healthcare services is not over. It is not too late for America to correct its course and stop the march toward a government run, “single payer” healthcare system.
Polls show that a large majority of Americans don’t want Obamacare. Congress should seize the opportunity to repeal the very worst aspect of this new legislation, namely the mandate that forces every American either to purchase health insurance or face an IRS penalty.
This mandate represents nothing more than an unconstitutional, historically unprecedented gift to the insurance industry. I introduced the “End the Mandate Act” (H.R. 4995) expressly to prevent the administration from ever putting this provision into effect. Instead of mandating the same failed “entitlement” healthcare schemes that are bankrupting Europe, Congress should fundamentally reexamine the case for free-market healthcare. Our current model, based on employer-provided health insurance, did not arise based on market preferences. On the contrary, it makes no sense to couple health insurance with employment. But federal wage and price controls instituted during World War II left employers with no alternative to attract workers in a tight labor market other than offering extra benefits such as health insurance and pensions.
Over time these non-wage benefits became the norm, especially since employers could deduct the cost of health insurance premiums from their income taxes while individuals could not. The perverse consequence is that
employees lose both 
As reliance on third-party health insurance grew, patients became detached from the true costs of their doctor visits. In the 1970s the Nixon administration, along with the late Sen. Edward Kennedy, championed the cause of health maintenance organizations (HMOs). Congress accepted the faulty premise that HMOs would reduce costs through centralized management of patients, when in fact the opposite was true: More bureaucracy would only lead to higher costs, less accountability and worse patient care.
In recent years Congress has only intensified the problem with more laws and more regulations, especially with the disastrous Medicare prescription drug benefit. The drug benefit was another example of naked patronage to a politically connected industry, and it exponentially worsened the federal government’s balance sheet. Obamacare will be the last nail in the coffin of our bankrupt entitlement system.
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More laws are not the answer. Instead, we need to allow a free market system to operate that reflects consumer choices while rationally pricing services. In a market system patients likely would pay cash for basic services, while maintaining relatively high-deductible catastrophic insurance for serious illnesses and accidents.
The cost of most routine medical care would drop if the patient paid the bill on the spot, especially if doctors no longer needed to employ large staffs solely to deal with insurance and billing.
Let me repeat: We need a system in America whereby patients pay cash for basic services and carry insurance only for serious illnesses and accidents.
Health maintenance is the responsibility of each of us individually. We cannot continue to collectivize the costs of healthcare and expect things to get better. Authoritarianism is bad for your health. Congress should end the Obamacare mandate and allow market-based medicine to flourish.
Ron Paul, a medical doctor, is a Republican member of the U.S. Congress who represents the 14th District of Texas. Call his weekly update line toll free at 1-888-322-1414 or visit his website at www.ronpaul.org.
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(Issue # 26, June 28, 2010)
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