John Stossel asks why people, including the Wall Street Journal editorial board, are upset over Schwarzenegger’s proposed socialized health plan and are calling for federal intervention.  He suggests that we should let Schwarzenegger’s plan predictably fail in California rather than imposing that predictable failure on the whole country.

The governor also wants to enlarge the state’s coverage for children by including people with incomes as high as $60,000 for a family of four. Imagine that: You can make $60,000 a year and put your kids on the dole.

This ought to dispel any notion that Schwarzenegger is a believer in small government. Here he is following former Republican Massachusetts Gov. Mitt Romney down the path of state socialized medicine. Romney said compulsory insurance would cost a person $2,400 a year. But now we know it’s at least $4,560.

I have been skeptical of Romney’s socialized health plan in Massachusetts, expecting it to eventually cost much more than what was “sold” to the public.  Now we facts are a little more clear.  Romney’s compulsory health care plan will likely be the single issue that will make him an unacceptable candidate for me.

Back to Stossel…

The root of the problem is that few people face the true cost of medical care. Medicare and Medicaid beneficiaries don’t because taxpayers pay their bills. People with employer-based medical insurance don’t because insurance policies shield them from it. Since they pay only small co-pays when they see a doctor, they don’t ask, “Do I really need that test?” but rather, “Does my insurance cover it?”

People who don’t face the full cost of their choices don’t act like cost-conscious consumers. Higher prices result.

With a rational government policy, people would save money for routine medical care and buy insurance for solvency-threatening illness. After all, we don’t buy auto insurance to pay for oil changes and worn-out windshield-wiper blades. But today, people expect medical insurance to cover routine physical exams because someone else seems to pay the premiums.

All this hurts people who buy their own insurance or don’t have it. It would be good if they could buy a basic high-deductible catastrophic policy. For a healthy young person, such a policy would be relatively cheap. But because of special-interest lobbying, most states mandate that insurance cover things that most people would never buy if they were paying the cost openly — things like Viagra and substance-abuse counseling. The Council for Affordable Health Insurance (CAHI) reports that states have imposed 1,824 mandates on insurance companies. This makes even a high-deductible policy absurdly expensive in many states.

Government further harms us by not permitting cross-state competition. As a New Yorker, I can’t buy a cheap policy sold in Iowa, a state with fewer mandates, because I may only buy from companies that are subject to New York’s costly regulations. That’s nuts.

Nuts indeed.

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This entry was posted by Brian on Wednesday, February 14th, 2007 at 5:42 am and is filed under Government, Health Care. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Please note the copyright policy.