Ron Paul: Obamacare Is Bad For Your Health

Ron Paul : Texas Straight Talk June 14 2010

by Ron Paul

The administration's terrible health care reform bill is now law. But the debate over how and whether the federal government should be involved in providing health care services is not over. It is not too late for America to correct its course and stop the march toward a government-run single-payer health care system.

Polls show that a large majority of Americans don't want Obamacare. Congress should seize the opportunity to repeal the very worst aspect of this new legislation, namely the mandate that forces every American either to purchase health insurance or face an IRS penalty. This mandate represents nothing more than an unconstitutional, historically unprecedented gift to the insurance industry.

I introduced the End the Mandate Act, HR 4995, expressly to prevent the administration from ever putting this provision into effect. Instead of mandating the same failed entitlement health care schemes that are bankrupting Europe, Congress should fundamentally reexamine the case for free-market health care.

Our current model, based on employer-provided health insurance, did not arise based on market preferences. On the contrary, it makes no sense to couple health insurance with employment. But federal wage and price controls instituted during World War II left employers with no alternative to attract workers in a tight labor market other than offering extra benefits such as health insurance and pensions. Over time these non-wage benefits became the norm, especially since employers could deduct the cost of health insurance premiums from their income taxes while individuals could not. The perverse consequence is that employees lose both their paychecks and their health insurance when they lose their job.

As reliance on third party health insurance grew, patients became detached from the true cost of their doctor visits. In the 1970s the Nixon administration, along with the late Senator Edward Kennedy, championed the cause of health maintenance organizations. Congress accepted the faulty premise that HMOs would reduce the cost through centralized management of patients, when in fact the opposite was true. More bureaucracy would only lead to higher cost, less accountability, and worse patient care.

In recent years Congress has only intensified the problem with more laws and more regulation, especially with the disastrous Medicare prescription drug benefit. The drug benefit was another example of naked patronage to a politically connected industry and it exponentially worsened the federal government's balance sheet. Obamacare will be the last nail in the coffin of our bankrupt entitlement system.

More laws are not the answer. Instead, we need to allow a market system to operate that reflects consumer choices while rationally pricing services. In a market system patients likely would pay cash for basic services while maintaining relatively high deductible catastrophic insurance for serious illnesses and accidents. The cost of most routine medical care would drop if the patient paid the bill on the spot, especially as doctors no longer needed to employ large staffs solely to deal with insurance and billing.

Let me repeat: we need a system where patients pay cash for basic services and carry insurance only for serious illnesses and accidents. Health maintenance is the responsibility of each of us individually. We cannot continue to collectivize the cost of health care and expect things to get better.

Authoritarianism is bad for your health. Congress should end the Obamacare mandate and allow market-based medicine to flourish.

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Ron Paul is America's leading voice for limited, constitutional government, low taxes, free markets, and a return to sound monetary policies.