How Do I Pay My T-Mobile Bill From My Phone Affordable Health Care Is Better for You

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Affordable Health Care Is Better for You

I often buck orthodoxy… for example on markets and certain investment plays.

I fit that mode well, especially when it comes to public policy issues. For example, I am against health care.

Personal freedom? We have no more freedom to choose our own doctors under most private insurance plans than we do under a single-payer system.

An unaccountable bureaucracy? Insurance company administrators are just as terrible as the government variety.

Expensive subsidies? If you get your insurance from your employer, you can a huge Tax rebate. Your insurance benefit is not taxed, even if it is part of your compensation, just like your paycheck.

But the bigger problem for me is this: the economic benefits of having affordable health care far outweigh the costs.

Here’s my case… and I’d like to know if it’s convincing to you.

How did we get here?

There is no health care “system” in the US.

What we developed from a contract between the United Automobile Workers and the Detroit automakers in the late 1940s. Workers accept lower pay if they get cheaper health coverage on the company tab.

But no one expected the deal to last forever. They assumed that postwar US citizens, many of whom had sacrificed to preserve their nation’s freedoms, would eventually receive government-sponsored health care in support of the private system.

But that didn’t happen. Instead, the company-based insurance system expanded to cover all industries. Eventually, government-sponsored programs such as Medicare and Medicaid emerged to fill gaps for those without jobs: the unemployed (Medicaid) and the retired (Medicare).

Then both the company and government systems were entrenched with vested interests.

For a variety of reasons — primarily, employers, employees, insurers, and the health care industry have no incentive to control costs and premiums — the system has reached a point where the US has the worst health outcomes of any developed country.

and the highest rate of bankruptcy due to medical bills.

In other words, our health care “system” is a hodgepodge of temporary fixes and counterfixes that have become permanent because no one can accept anything else.

This will seriously damage our economy.

The US spends more of its gross domestic product (GDP) on health care than any other country – 16%. But other economy-wide effects of our employer-based insurance system reduce our GDP below its potential. Let’s take a look at all three.

  1. Job lock: Many people keep jobs because they have health coverage. They stay in those jobs longer than they otherwise would. That means overall job mobility in the US economy is low, which weakens labor market efficiency.
  2. Low rates of entrepreneurship: The US has one of the lowest rates of new company formation in the developed world, and it’s getting worse. Starting a business here is more risky than other countries.. you can’t get health insurance until you make a good profit. Young people who are at the center of their lives do not start businesses for that reason, which hurts job creation.
  3. Delayed retirement and a weak job market: Older workers stay in their jobs longer in the US to maintain access to company insurance. That means less room for young workers, keeping them underemployed and hurting their long-term career prospects.

In addition to $4 trillion in annual direct costs, some estimates estimate that these dysfunctional aspects of our health care system cost the US economy 3 to 5% of GDP. Every year.

Can you afford a private driveway?

So, is some form of public support for health care “socialist”? Hardly.

How I see it: Health care has economy-wide effects like the highway system, the justice system, and national defense.

Each is greater than the sum of its parts. Done right, such “public goods” contribute more to economic activity than they cost. If you try to do these things individually, you will sacrifice a lot of financial flexibility.

The common argument is that public health care ends up being rationed. We hear horror stories of Canadians or Britons standing in endless queues for medical procedures. (Of course, under the private system, there is also rationing… if you can’t afford it, you don’t queue at all.)

But a UK-style national health service is not the only option.

Many countries have hybrid systems, including many Latin American countries where the US retires. It’s common to have a public system for basic and preventive care — neighborhood clinics where you take your kid with the sniffles or vaccinations — and a private system for more advanced health needs. If you want to get private insurance and go to a private hospital for surgery, nothing can stop you. If you can’t afford it, you may have to wait in line for public care.

But there are significant benefits. First, we avoid job lock, low entrepreneurship and late retirement. Second, the availability of low-cost primary and preventive care reduces the incidence of long-term chronic conditions that cost us all a lot of money when uninsured people end up in the emergency room — diabetes, heart disease, and so on.

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