Healthcare and Libertarianism

So, this is another difficult topic for me - I guess it wouldn't be discussed here if it were easy, though.

Let me preface my comments with an observation on libertarianism, and let me preface my observation on libertarianism by making a statement on its ideological opposite, communism: I would actually be happy to be a communist if everybody in the economy truly believed in it and practiced it to the best of their ability.  I actually think libertarianism falls in the same category as communism, namely that it is really only effective if its principles are adhered to by a great majority of the people. 

In communism we need to all decide that each of us is enhancing the greater good, and that while there is no direct, personal benefit to my labors it still "averages out" better for my economy and the economy that my children will participate in.  Libertarianism takes the approach of letting each person decide their own destiny without undue influence from other parties in the form of taxes, regulation, etc.  The primary reason I think that libertarianism is a more realistic approach is because it more accurately mirrors the tendencies of the people who practice it.  When Winston Churchill said: "It has been said that democracy is the worst form of government except all the others that have been tried", I think the exact same thing can be applied to capitalism and libertarianism.  As human beings we are selfish, and a system that works off of this selfishness is generally better than one that pretends the attribute isn't there.

So - the reason for my preface is to state that in my ideal world there would be no ACA, but it also would not have ever come up as an issue because we all understood the importance of taking care of ourselves and the legislation would not even be needed.  Since we don't live in this "perfect" world, we have to deal with compromise, differing ideals, shifting public opinion, election cycles, and everything else.  With that preface, my opinion is that the ACA is probably a necessary evil under our broken system, or at least a necessary experiment that I will be curious to see the result of.

The main reason for this opinion is because I actually believe that we are already living a form of socialized medicine in this country.  Insurance companies are probably the worst thing that ever happened to our healthcare system, for many reasons that I won't get into here beyond a single example of how my group insurance program works for my work.  We all pay hundreds of dollars in insurance payments each month, money that just goes down into a deep dark hole never to be recovered in most cases.  Prior to my child being born, I had put tens of thousands of dollars into the systems and had never used it a single time.  It is a necessary evil, costing tens of thousands of dollars each year but really only there for the off chance I need I get really really sick.  Even when my child was born and had to spend time in the NICU, the insurance coverage was pitiful at best and I know for a fact that my out of pocket costs were higher than they would have been been if I had not had insurance at all.

Meanwhile, there are other people in my office who go to the ER 3 times a week, for everything from a minor cold to a broken bone because their kids are doing something stupid.  They are using way more than their "share" of the system, which is of course why the system was set up.  In the distributed risk model used by all insurance programs from auto insurance to life insurance, we all participate based on the calculated risk we introduce, and the financial aspect of that risk is spread across the entire basis.  Especially in the employer-based group health insurance plans, that risk is spread very inequitably in order to make the cost even for everybody.  That means that I am the one paying for the hundreds of ER visits by just a couple people while I get nothing out of the system.  This is also why we will see so many statistics trying to prove that many of the people who don't have insurance actively avoid having it, who definitely make enough money to be able to pay for it if they want.

Therefore, the bottom line is that there are essentially two types of socialized medicine in this country right now: those who buy insurance and participate in the distributed risk model, and those who don't purchase insurance and are still being paid for through higher health costs and/or higher taxes.  While there are dramatic exceptions highlighted by the proponents of the ACA, for the most part everybody in this country gets their healthcare taken care of one way or another.  The ACA really only formalizes this dirty little secret, and tries to do something about it.

Do I think it is perfect?  No.  I think it is the crowning achievement to a broken healthcare system, and I don't think I have ever heard any commentator or pundit ever claim that our system is anything more than barely functional.  Everybody agrees the system is broken, and while nobody can agree on how to fix it this at least gets things moving.

I think the idea of independence vs. interdependence as presented by Bach is at the heart of the question.  The issue of course is how we interpret each of those terms.  Is me being forced to buy insurance when I don't want to "interdependence"?  I would submit that the answer is no.  As a direct contrast to this idea, Exhibit A is the gasoline/highway tax.  I actually support this tax, because it seems to be the most fair way possible to build infrastructure within our country.  While there are many factors and it is at best an oversimplification, how much I use the system is almost directly correlated with how much I am paying into it.  I am sure the government has plenty of waste, fraud, and abuse that can be pointed to when looking at it, but all in all I am pretty happy with the system.

Exhibit B is the church fast offerings system.  I am very happy to pay into the system for a couple reasons: it is voluntary, I trust the organization handling it, and I am able to see it do good work.  I have personally seen it at work several times, and I generally agree with everything I have seen it applied to.  While you can't really look at this as as system that you "pay into" the way you do with insurance, I would like to think that if I ever needed financial assistance of this type I would be able to take a loan or other assistance without feeling guilty because I have been helpful.

For Exhibit C: I occasionally have people who are obviously on their last leg stop by my house selling things.  I may just be suckered in by somebody with a great sob story, or perhaps the ability to portray their sob story without actually relating it to me, but I end up buying a gallon of cleaner that I don't need from people like this.  I have my own ways of giving, and it should always be up to me to decide how that giving occurs.  A couple years ago I had a nice gentlemen stop by my office offering to clean windows.  He was a real estate professional at the height of the real estate crash (depth of the crash?) and was looking for a way to help his family.  I jumped all over that, and for almost 3 years he worked from 3:00 to 5:00 AM a couple times a week cleaning our building, and we paid him quite well for it.  I have a lot of respect for somebody who might be in a bad situation, but who can take matters into their own hands and try to turn things around.

In short, I think that there is a huge need for ways to make peoples lives better, and I know that I don't do enough of it.  However, I don't really want to be forced to pay for the medical insurance of those around me who don't take care of themselves and get sick all the time, and who go to the hospital at the first sign of a runny nose, and who generally run up the tab for the rest of us.  We are selfish beings, and the only reliable system I have seen use that selfishness to make the world go round.  Capitalism is a horrible system, but to paraphrase old Winston again, it is the worst except for all the rest.  If those around me had to be responsible for their proportionate cost to the system, what would change?  I guarantee they would not go to the hospital nearly as often if they had to bear the full brunt of the cost, and I would like to think that they would also make better decisions overall with regards to their health.  I know this sounds selfish and I guess I just need to own that fact, but I want to be able to help my own family and help the people I want to help, I don't want to see my money wasted and mismanaged when it is supposed to be going to "help" others.

Point 1 on this rant is that I think our insurance system is broken and simply doesn't provide any incentives for people to keep costs under control, and requiring people to buy into it is furthering this broken system.

Point 2 on this rant is closely involved with the first, in that I think that generally speaking, a mandate to buy anything at all is wrong.

While I got into point number 2 a little bit above, it probably deserves a couple paragraphs of its own.   I won't waste too much effort here, since this is the issue that has been bandied around and beat to death already.  While I think there are better ways to do it (that I won't get into now), I don't really have a problem with people being required to buy car insurance, for two reasons. First, you can directly impact other peoples property and lives with your car, and it seems reasonable to mitigate that by requiring people to buy insurance.  You don't have to buy insurance to cover your own car, just to cover other people you might run into.  Secondly, you don't have to purchase car insurance if you don't want to, only if you want to own a car.

In the case of the ACA, there is no way around the mandate: buy health insurance, or receive a financial penalty each year.  This is a requirement from the government to buy something, and I have a hard time justifying the mandate.  Spinning it and calling it a tax doesn't change the fact that we are still being required to purchase something, or suffer a financial penalty.  I don't think this is constitutionally permissible, but I don't think much of what else goes on is either, so I guess nobody cares what I think is constitutional :-)

Now for point 3: There is absolutely no way that this is going to end well just because of the law of unintended consequences.

If there is anything I have learned while trying to manage 50 employees, it is the absolute inescapability of the law of unintended consequences.  No matter what policy you put in place, no matter what new initiative you roll out, there will be people who either game the system, or who actively work against it, or find a loophole you didn't anticipate, or straight up retaliate. If I can't get it right with 50 employees in a fairly closed system, how well will this go as a nationwide program with so many players?

With this, I am supremely confident that this will not go as planned.  How many people will choose to pay the tax and participate in the healthcare system anyway, because it is cheaper?  I have heard that the tax will be less than 1% on most people, and this is a small fraction of what I am currently paying for my health insurance.  What if everybody jumps on board this way and the insurance companies LOSE members rather than gain them?

Does anybody actually believe the cost projections?  I haven't even dug in to them, and I can confidently state that they are wrong.  I don't know when the last time was that our government got any cost projections right, but I assure you it was completely by accident.

What about my health insurance costs?  Now that the person who smoked their whole life and is going to run up hundreds of thousands of dollars in costs in the last 20 years of their life will be covered by me because this person legally can't be turned down.

I don't have any particular disastrous predictions, I am simply stating that there will be plenty of side effects that were never anticipated.    The government should stay out of everything they possibly can, just because no single entity can regulate and control anything this massive, if anything at all.

Education was brought up as an example of interdependence.  I would submit that our education system is broken, only to be eclipsed by healthcare in brokenness.  We basically have an agrarian-style education system that has changed little if at all since the 1800s; I own 5 or 6 books dedicated to talking about how the brain works and how we learn, and even with all the thousands of studies and millions of dollars dedicated to showing a better way of doing things, we are stuck where we were a hundred years ago.  Why? Because education is government mandated.  The idea of "education for all" is a great idea, and I support the general thesis.  However, we would be light years ahead of where we are today, and I am confident that we would have a system where education was available to all people.

Higher education is another example of where government messing with education causes problems.  I imagine most of you have seen the graphs correlating increases in tuition prices with increases in Pell grants and other funding.  Again - education is extremely important and should be available to anybody who wants it, but I think that intervention by the federal government has caused more harm than good.

I like the way Ronald Reagan put it: "The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help."

Point 4 probably shows nothing more than how fed up I am with things in general - Even with the other three points explaining why I think the ACA is a disaster, I think it is an experiment worth trying for the following reasons:

1. The insurance system is broken, but it isn't going anywhere.  Would I like to see health insurance become all but completely unnecessary, and do I think this is completely possible? Yes.  I think we could get health care costs to the point that all we needed were high deductible plans that kicked in at $5,000 or so.  If we had to pay all the smaller stuff out of pocket, we would be much more judicious about things, all the insurance company overhead would disappear from our costs, and lots of other benefits.  Realistically though, this won't happen.
2. Making healthcare available for everybody is a worthy goal.  I don't think the ACA is the way to do it, but the idea is still a noble one.  If things are bad enough that anything is better than nothing, then this certainly qualifies as anything.
3. The theory is that costs will go down with the distributed spread.  I am not sure that I believe this, but it is worth testing.
4. If this doesn't work, maybe it will provide impetus to fix it for real?

So there you have it.  Another long blathering post,  that weaves and waves all over the place without being particularly constructive.  I dislike the fact that we are at a place where I have to view the ACA as a necessary evil, but here we are.

To bring things around to my preamble, I think that libertarianism holds the secret to wealth and happiness as a whole for our country.  It is not a fair system, so some people will make it better than others.  However, a rising tides floats all boats, and as long as individual liberties are respected by everybody then the need for an occasional helping hand will be minimal and can be driven by community resources such as churches.  Importantly, those who truly want to succeed will have no limits.

The problem is that libertarianism is an ideal that would require everybody to respect it, which makes it just as difficult to implement as communism.  Those in power could not abuse that power, whether "those in power" refers to the government, wall street, your neighborhood watch, or anybody else.  While I think that that this is a great ideal, realistically people will always abuse their power and influence to further their own benefit.  That same trait of greed and selfishness that makes capitalism/libertarianism the best system of all those available still can't be completely self-regulating because of those exact traits.

I think that in past years we have been closer to the ideal, and that we are drifting in the wrong direction.  I won't list all the reasons, but there are too many examples of big-brotherism, corporate dominance, etc. for my liking.  Under the circumstances, the ACA may actually prove to be an experiment worth running.

In summary, I would design things completely different if I had my way.  Realistically though, I think that things are so broken that almost anything is better than the status quo - I look forward to the results of the experiment, and it might even provide the motivation for achieving real change.

Thoughts?