Health Care Is Politics, Not Economics

Health Care Is Politics, Not Economics
Why choosing a health care system is not about economic efficiency
Alfredo Ascanio (askain)

Today, central and local government machinery provides educational, health, and environmental services.

The state's social security system guarantees some protection against illness, age, unemployment, redundancy, and industrial injury.

There are some types of goods and services, which must, if they are to be supplied at all, be provided through public authorities with indirect payment being made by the community in taxation. These are called public or collective goods.

The growth in the provision of health services by the state is not, of course, without its critics.

Some say state provision is inadequate because payment levels are lower than what states define as subsistence needs. There are inequalities due to the regional variation in welfare and discrepancies of poverty index. Some find inhumane treatment from restrictive eligibility. The relative burden of rising welfare costs can seem less dramatic than the absolute rise in total costs. There can be intrusive administration. While welfare reform in the United States is about many of these issues, it is most certainly not about one: economics.

President Barack Obama is working to reclaim his health care initiative from critics and boost momentum to push his chief domestic priority through Congress.

The principle arguments against his plan are:

1) cost of their 10-year coverage plan;

2) control the rise in health care spending;

3) the issues about benefits for illegal immigration medical malpractice; and restrictions on abortion coverage.

Obama is still negotiating the health plan. He does not want the status quo. He is seeking a consensus on a new way forward.

What are the conservative organizations that do not want the plan? Some are: Freedom Works, Patriots and ResistNet Tea Party.

But these organizations know that 48 percent of Americans under 65 years old will, in 10 years, be uninsured. In the same time period, 57 percent of people under 21 will not have insurance. In 2010, according to the U.S. Treasury, 33 percent of Americans will not have coverage of any kind.

Welfare is a public business. What America needs now is a good assistance program and “workfare” especially for persons with incomes below the so-called poverty line. There are two techniques for administering these kinds of public subsidies to the poor. One is crude, while the other is significantly more subtle.

The crude technique limits benefits to those who can establish need through disclosure of their income and resources to an administrative official, and also explicitly pinpoints the beneficiaries.

The subtle technique spreads benefits across a broad spectrum of the population, subsidizing many without need as well as those in need.

In the subtle class the leading program is compulsory, contributory social insurance (social security) to provide income for old age, for survivors, for hospital care of the aged, and for disability.

This income transfer program and, in the ideal free enterprise society, earnings-related income sufficient to afford a decent standard of living would be available to all family groups and unattached individuals.

For some, this income would come from employment, for others from savings or from the proceeds of equity in insurance or retirement systems. But the free market does not insure an adequate income from these sources; both crude and subtle programs take up part of the slack.

In addition to the traditional preoccupation with relating relief to one's work work ethic, a new concern is that income subsidies and an insurance plan be adequate, and that they be provided in a manner that preserves human dignity, avoids putting a stigma on the poor, and provides no special advantage to any public official.

To adjust the older health-insurance status to the newer goals requires a hard-to-achieve balance between charity, suspicion, incentives, inequalities, and duress.

In almost 20 years, more than 20 congressional reports have looked at improving the living standards of the poor, but the American welfare system is, fundamentally, not enough.

Another problem is the fragmentation of federal relief programs. Poverty and welfare are now major public issues, and it is tempting to assert that an efficient, management-minded national administration would arrange for coordination of federal relief program and thus have the best of both worlds, unity within diversity.

However, no formula that will automatically create coordination of welfare programs at the federal level has been invented. Coordination “is not neutral,” according to Harold Seidman, former assistant director of the Bureau of the Budget.

Fedele Fauri of the University of Michigan School of Social Work, said that any radical plan would not be adopted soon, so instead the focus should be on improving the existing welfare system.

Success and failure in public program are relative terms at best. If a universally agreed objective could be achieved at the minimum possible cost, a program would, presumably, be a success. However, there are no universally agreed objectives for most programs and much more than just financial costs.

Is social security a success because it benefits a substantial segment of the population and is popular with most Americans, or is social security a failure because its benefit levels will not sustain an elderly individual without other resources and because it continues to be tied to a singularly regressive tax?

How much weight should be assigned popularity?

What tests are appropriate in evaluating public programs to provide a social security program for the low-income population?

Tom Peters, executive director of Tennessee Citizen Action, said that consumers have little choice when they shop for health insurance. "It creates a real danger for consumers, because they don’t have a choice."

The insurance companies can arbitrarily raise rates and there is nowhere else for consumers to go. Peters argues the lack of competition makes national health care coverage a more realistic option. "It would give people the option to see what a different plan would offer," he said. "I think there wouldn’t be some of the overhead cost that goes into the private plans."

According to some research, in the past decade, insurers recorded large profit increases, while premiums for Tennessee families increased by 62 percent. The insurance industry counters that government agencies have concluded they do, in fact, operate in a competitive market and that, since they are regulated, the regulators bare some of the responsibility for the rates. Critics claim that making national health care an option would be even more expensive than the current system.

Others said that there are internal contradictions in Obama's proposal said . Why? Because Obama wishes to relieve the suffering of Americans, but he does not wish to challenge the old “Bottom Line” of the competitive marketplace. Unfortunately for him and for most Americans, he can’t have it both ways.

Why is it that the private market is not used as a means of supply of all goods and services? Does the market in some sense fail as a resource-distributing medium? We are speaking of matters, which lie somewhat uneasily in borderline territory between economics and politics.

A convinced socialist is far more likely to view government intervention in economic affairs in a favorable light than in a person who is temperamentally more inclined to follow laissez-faire doctrines. Furthermore, the differences between them may not be easily reconciled on the basis of economic arguments.

Even when a strong case can be made, which suggests that the state can perform certain tasks more efficiently, in the economic sense, than private enterprise, one must still face the issue of the degree of power that the state should have over the individual’s affairs.

This, however, is a political rather than an economic question, one where value judgments are involved.
©2009 OhmyNewsOther articles by reporter Alfredo Ascanio