Libertarian Party of Ohio
June 3, 2013
COLUMBUS—Ohio Governor John Kasich has published an op-ed in USA Today titled “Reagan’s compassionate Medicaid expansion.” In it, Kasich attempts to sell fiscal conservatives on a health care scheme that would saddle Ohio taxpayers with a looming fiscal disaster and threaten the quality of health care for everyone.
“Improving the quality of the care Medicaid provides, and giving taxpayers better value for the money they spend on it, have been priorities for me as governor,” Kasich writes.
Kasich has come out in favor of signing on to the Medicaid expansion plan that is part of the Patient Protection and Affordable Care Act, also known as “Obamacare.” By his own figures in the op-ed, the plan for Ohio would add 275,000 new clients to the state’s Medicaid rolls. Under the Obamacare plan, the Federal government would initially—not permanently—pick up most—not all—of the direct costs, although additional administrative costs would be borne by the states.
The expansion “spares our hospitals the effects of looming cuts in federal funding for uninsured care, prevents additional projected increases in health insurance costs, and gives low-income workers a hand as they move up and into the workforce,” Kasich claims.
The Libertarian Party of Ohio disagrees.
Almost two years ago, Professor Mark J. Perry of the University of Michigan-Flint, posted a chart tracking the rate of growth of higher education costs and medical care costs against the general Consumer Price Index. Not surprisingly, the chart shows that both areas grew sharply higher than the general rate of inflation. What is significant about this is that health care and higher education are the two areas of the economy in which some level of government is either directly responsible for a majority of the payments or guarantees those payments through regulation or government program. Health care and health insurance is also the most heavily regulated sector of the economy in the United States.
When government guarantees access to a product—and that is what higher education and medical care are, products—it effectively makes costs independent of price restraints. Whenever this happens, costs always go up and up without predictable limit until some other method, such as rationing, is used to limit demand.
So while expanding Medicaid may well seem like the compassionate thing to do in the short run, and might even seem to help control costs against other, even less efficient existing circumstances, in the end it will hurt everyone, the poor and disadvantaged most of all, while costs will rise exponentially for everyone.
Some might say that Kasich is eager to take the short-term federal cash infusion—which will be paid with dollars Washington is borrowing or printing—to boost our state’s fiscal outlook in time for his uphill re-election bid in 2014 and a presidential bid in 2016, leaving the Buckeyes he leaves behind to deal with the fallout.
But what is the LPO’s solution? Market forces are going to work whether we like it or not. The answer is to try to work with these forces rather than against them. Allow and encourage care providers to reveal their prices openly and before service is provided. End regulations that make it difficult or impossible to purchase insurance across state lines. End the protective limitations the medical profession has placed on the number of available medical school slots to stifle competition. End mandatory insurance coverage rules and let each consumer buy the insurance plan that he or she decides best meets individual needs. And don’t let the insurance companies write the laws and regulations governing their industry so Congress can rubber stamp them.
That’s just a start in fixing the mess that politicians like Kasich and Obama have made of health care in this country, but if we adopt market-based strategies like these, health care costs will in time come down as they readjust to free market competition. And that’s in everyone’s best interests.
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