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Wednesday, October 31, 2007

Hillary Care

Currently there are about 47 million Americans without health insurance. Hillary Clinton plans to change all that if she becomes president. Her proposed health care plan (dubbed Hillary Care) makes health insurance mandatory for every American (just like how car insurance is mandatory for all drivers). Also, small businesses would receive subsidies to help fund health insurance plans. In order to do this she proposes to raise taxes on families earning high incomes ($250,000 or more) and require health insurance companies to approve everyone who applies for insurance. However, there is a catch. There will be no limit on premiums. This means that health care could still cost low income families just as much as it did before.

What Hillary Care fails to do is differentiate between health care and health insurance. All Hillary Care talks about is health insurance. However, health insurance is only one piece of the puzzle. If Hillary Care is adopted the quality of medical care in the United States will greatly decrease. For example, the United States military tri-care system is the perfect example of what happens with there is too much government command and control in a health care system. One of my old economics teachers at the Air Force Academy used to say that the reason why military health care is not nearly as good as current civilian health care (for example, the Walter Reed scandal) is because there are no economic incentives in a military, or socialized, health care system. For example, two doctors of the same rank would make the same salary, even thought one doctor might be horrible, and the other amazing. The sad truth is there is simply no economic incentive for doctors to better themselves. In the civilian world this does not happen because the better a doctor is, the more money they earn

Hillary Care would, in a sense, cause the same problems in civilian health care as we see with military health care. If insurance companies are forced to provide insurance to everyone we would see much longer waiting times to see specialists, much longer lines at doctor’s offices (because more people would visit the doctor), and poorer quality health care. The reason why the quality of care would decrease is because doctors would have to see an inordinately large amount of patients, which is a consequence of mandatory insurance. Doctor’s offices would have greatly increased waiting times, which would be a major issue for people with serious conditions. Also, if there are no limits on premiums, would health care really be any cheaper for those who currently do not have health insurance? And finally, if Hillary Care were to establish too much command and control in health care I am concerned that we may eventually see a socialized health care system, which would eliminate the economic incentives that make doctors better.

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