The Sovereign Mind

Free thought on politics and real life

Posts Tagged ‘Safeway

What’s Wrong With the Health Care Bill: What Happened to Personal Responsibility?

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I recently read the summary of the house bill and a few parts of the actual bill that I wanted to dive into in more detail. No, I don’t have time to read the entire bill. I have to say: it’s worse than I thought.

I won’t bother about the part about the “public option”. It is the most debated part of the bill, and most of the debate is ideological. Although personally I don’t like it as I fall on the more conservative small government side, but I don’t feel I have much to add to that debate. I’d like to focus on some things that are wrong because they are wrong–not because they don’t fit a certain ideology. So this is the first post in a series (if I get around to more) on what’s wrong with the health care bill.

The summary of the bill says this:

It also limits the ability of insurance companies to charge higher rates due to health status, gender, or other factors. Under the proposal, premiums can vary based only on age (no more than 2:1), geography and family size.

(You can read the part of the actual bill that relates to this issue here.)

I actually like the idea of preventing insurance companies from charging sick people more. The unregulated free market punishes people for having the nerve to get sick. Now, some diseases are preventable and one could argue that in some cases it is justified to charge people more if they get sick due to their own poor choices. However, there are two problems with this argument:

1) Many people get sick because of bad luck, not because of anything they did wrong.
2) Many people make bad health choices but don’t get sick.

If the intent of a free market is to encourage good choices by rewarding them and discourage destructive choices by punishing them, clearly the free market does not do this well in the health care world. As I’ve argued before, the free market is a great system, but is not perfect, especially in the areas of health care and education (I’ll leave education for another day).

So what’s wrong with this proposal, then? If we’re going to take away health status as a measure of how much someone should pay, what should we replace it with? I propose that we regulate insurance companies such that their premiums must be based on behavior, not health status. For example, someone who smokes can be charged more. Someone who is overweight, but loses weight over a certain amount of time, should see his premiums decrease. That would help accomplish two important goals:

1) Make the pricing system more fair. In our current system, someone with a chronic disease, whether they acquired it because of their own poor choices or not, would have to pay enormous premiums in order to be insured. Or, they have to be in a pool where healthy people help subsidize their care. Why not make people who are making poor health care choices, but who are not yet sick, subsidize the care for those who are sick?

2) Basing premiums on behavior would be a driver to improve health choices, and therefore lower health care costs. If people know they can lower their health care premiums by making better choices, they’d be more inclined to do so. Safeway has proven it, but according to my reading of the bill, Safeway’s program would not be approved.

Fortunately, I’m not the only one making this case. Although I haven’t heard much in the media, and have yet to find any other blog post regarding this important issue. Obama likes to talk about decreasing health care costs, but I don’t see much in the bill that actually does. This would be one way to do so, and it’s not even an partisan issue.

Written by Mike

July 24, 2009 at 10:22 pm