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Supreme test for health reform

By Jay MacDonald · Bankrate.com
Tuesday, October 4, 2011
Posted: 9 am ET

As the Supreme Court prepares to administer a constitutional checkup to President Barack Obama's historic health care reform, I would respectfully request that they weigh the alternative as well.

The 26 states opposing the Affordable Care Act insist that its individual mandate, which requires all Americans to purchase health insurance or face a fine beginning in 2014, is prima facia unconstitutional. You can't fine folks for not doing something, they maintain.

Underlying their argument is a broader ideology that believes that health care's many ills can be miraculously cured by a free market unfettered by meddlesome federal regulation. Competition, they claim, will drive down costs and improve product and processes. Get the feds out of the way and just watch this baby fly!

But an op-ed by academics Charles O. Kroncke and William L. Holahan paints a much different outcome if health insurance were left to the "care" of the free market.

In their economic analysis, a free market system would simply "compel insurers to treat sick people as they treat drunken drivers: higher premiums or denial of coverage." At the same time, market competition would lower premiums for the lowest-risk group, which would drive up premiums for everybody else.

"An unregulated insurance market has internal forces that lead away from any effort to build in community or shared values, such as universal coverage or affordable premiums," they write.

The Affordable Care Act offers a far better approach, one that the nonpartisan Congressional Budget Office estimates will reduce health care costs by $143 billion by 2020 and $1.3 trillion by 2030.

"The Affordable Care Act solution envisions a market in which private insurance companies operate within a set of constraints or boundaries. It is a regulated market in which all Americans must participate (which benefits both insurers and the insured alike), but which does not allow insurers to cherry-pick their most profitable customers," according to professors Kroncke and Holahan.

Allow me to add that health care reform is already making life better for millions of Americans who would have otherwise been cast aside by our broken health care system.

It may not be perfect. Heck, it may not even be constitutional; that's up to the Supreme Court to decide.

But is it waaaaaay better than the alternative?

You bet your life it is.

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7 Comments
CP
October 05, 2011 at 1:46 pm

"The most terrifying words in the English language are: I'm from the government and I'm here to help"

"The government does not solve problems; it subsidizes them."

-Ronald Reagan

CP
October 05, 2011 at 1:39 pm

"it may not even be constitutional" but we should still love it.

So we should throw our constitutional rights out the window because some people with certain ideologies think this is a good alternative? Typical.

And the CBO predictions that you cite have been thouroughly debunked.

"The CBO score excludes the $115 billion needed to implement the law. It double-counts $521 billion in Social Security payroll taxes, CLASS Act premiums and Medicare cuts. It strips a costly doc-fix provision that was included in the initial score. It measures 10 years of revenues to offset six years of new spending."

Jay MacDonald
October 05, 2011 at 8:46 am

Charles O. Kroncke is associate dean in the University of South Florida College of Business. William Holahan chairs the department of economics at the University of Wisconsin-Milwaukee.

Jay MacDonald
October 05, 2011 at 8:39 am

Guess we differ on the definition of "works," Ted. I would maintain that any health care system that leaves 30 million plus of its citizens uninsured is not working.

Ted
October 04, 2011 at 2:20 pm

Glad we have academics to teach us how dangerous the free market is.

"Our broken health care system" works despite government intervention, not because of it.

bytejockey
October 04, 2011 at 12:58 pm

Please have these "academics" identify from which ivory tower they sighted the mythical "unregulated insurance market".

Tom
October 04, 2011 at 12:03 pm

It is waaay better already.

I wish they had implemented the "fine" differently, so that its constitutionality could have not been questioned as easily. E.g. by a fico tax increase coupled with a new tax credit that allows you to deduct these additional taxes if you paid health insurance premiums...