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Bankrupt Healthcare
Hobby Lobby Ruling Shows Deeper Flaw in US Health Care

The Supreme Court’s announcement of its final decision of the season was a barn burner: The Court ruled, 5-4, that closely-held corporations cannot be required to pay for health insurance coverage of contraception for their employees. Among the wide-ranging reactions to the decision, the smartest have noted that the culture wars moved to the health insurance front mainly because our system is structured around employer-provided coverage. Take, for example, this WaPo piece, by Paul Waldman:

The fact that most Americans get their health coverage through their employers is something that we all take for granted but has no logical purpose behind it whatsoever. No other industrialized country in the world does it this way, and the system didn’t develop in the United States because it made sense from any standard of efficiency, cost or providing superior benefits to citizens. It was an accident of history […]

Why should you have to pay for insurance with post-tax dollars if you work for yourself or for a small company that doesn’t offer insurance, but with pre-tax dollars if you work for a larger company? Why should your employer’s preferences — including, as they do now, their preferences on what kind of birth control you should use — be more important than your own? And why should your insurance have to change if you get a new job?

As the United States becomes more and more culturally pluralistic we will see more disagreement in all areas of society—including over what the federal government deems “essential health benefits.” Here, as elsewhere, promoting decentralized and individualized decision-making can tamp down conflict and respect everyone’s freedom to live according to their principles. An employer-provided system can pit employers and employees against each other; a fully nationalized system can likewise ignite culture wars over taxpayer funding for this or that objectionable health care benefit.

Instead, a system in which individuals purchase health insurance within a private, competitive market would allow everyone to choose and fund only those benefits they want—and would bring down costs in the meantime. Instead of fighting each other over contraception coverage, we should spend time thinking how to make a system like that viable.

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  • qet

    I don’t know what such a market would look like. Take auto insurance as a possible model. Auto insurance is so heavily regulated, at least in my state, that I don’t think it can fairly be said that consumers “purchase [auto] insurance within a private, competitive market [that] allow[s] everyone to choose and fund only those benefits they want.” I think anyone who imagines that such a market in health insurance is realistically possible is dreaming. The government will regulate and standardize such insurance so that the companies offering it will be, as they are today, mere quasi-agencies of the government.

  • Jacksonian_Libertarian

    Exactly, employers should not be able to deduct employee health insurance as a cost of doing business. It should be paid to the employee and the health insurance deduction should only be available to the employee. This would create a free market where third party’s have been making all the decisions. It is the “Feedback of Competition” that forces continuous improvements in Quality, Service, and Price in free markets. As an example of what would happen to the medical industry if this was done, we need only look at Lasik eye surgery which isn’t covered by health insurance. In a few years this technology went from Radial Keratotomy where incisions were made in the eye to the very precise Lasers, from hospitalization to outpatient, and from thousands of dollars to a now advertised $299 per eye, or about the cost of a pair of high end designer prescription eye glasses.

    • mgoodfel

      If you do this, employees with families will pay more, and single people will pay less. This makes sense, but would be a rude shock to all the current employees with families.

      • AriTai

        The solution is the inverse – most places don’t tax primary foodstuffs – because they are viewed as essential. A lot of this debate is because many think that health care is essential. So don’t tax health care if this is so. If we do this, then individuals will have the same advantage of businesses – and businesses will no longer have a special advantage and will divest themselves of a service they have no reason to be in any longer. The tax system should focus on raising funds in a policy and behavior neutral fashion. Better to tax us all and pay directly for the results and services we don’t want to take care of ourselves – than bend a tax system to nudge, if not coerce behavior.

  • ShadrachSmith

    You would cut out a lot of rent-seeking and government regulators. Best of luck, I’m right behind you…hiding behind you, actually.

    • LarryD

      Ah, but the Progressives *want* rent-seeking (graft) and government regulators (sincures and the ability to lord it over others). They made a point of forcing employer paid contraception, despite having given assurances to the contrary, just to assert dominance over others.

  • gabrielsyme

    As the United States becomes more and more culturally pluralistic we
    will see more disagreement in all areas of society—including over what
    the federal government deems “essential health benefits.”

    It’s not really an issue of increasing cultural pluralism; it’s the rise of an illiberal and intolerant secularism, personified by Obama, who cannot fathom why anone could reasonably disagree with him, and sees no reason to respect those who differ. We are witnessing the rise of cultural antagonism and potentially the end of pluralism. How long will it be until under the claim of “tolerance” Christians and other dissenters will be prohibited from public sector employment and barred from regulated professions? We are witnessing the death of pluralism, not its rise.

  • stanbrown

    “a system in which individuals purchase health insurance within a
    private, competitive market would allow everyone to choose and fund only
    those benefits they want—and would bring down costs in
    the meantime. Instead of fighting each other over contraception
    coverage, we should spend time thinking how to make a system like that

    It is not possible that the person who wrote this also voted for Obama.

  • FriendlyGoat

    My local paper today reports on a fascinating article in JAMA Internal Medicine.

    Researchers found that 70% of surgeons, a high-paying, low-patient-contact specialty, who made political donations in 2012, gave to Republicans. By contrast, only 22% of pediatricians, a lower-paid, high-contact specialty, gave their donations to Republicans.

    The more a doctor collects for having as little patient interaction as possible, the more likely he or she is to turn politically red. The less a doctor earns for actually meeting with patients, the more likely he or she is to be politically blue.

    The road to finding sense in American health policy is a steeply progressive income tax to level this out—–so you do not find yourself with a small number of high-end-after-tax doctors fighting wide access to care for the actual voting citizens. A much-steeper progressive income tax, of course, would also stimulate job creation and fix many other out-of-whack sectors of our economy too, such as CEO pay, high-speed trading, problematic trial lawyers and pro sports. Who knew?

    Actually, we’re all coming to know. Some will admit it and some won’t.

  • AriTai

    Note that the childless 18-32 year old cohort visit the doctor a total of six times. Six times! And they make up the majority of the “uninsured.”

    Where 5.75 of these visits are for their birth control pills. Shades of the middle age guilds – “want your BC? Then schedule a visit and cross-my-palm.”) So it’s no wonder why every sector of the health community supported the ACA – they (though they were going) get 20% more business without having to compete for it. And the men in this group (aka “the young invincibles”) almost never go to the doctor and have no health expenses save when the few who have a biking accident while wearing a helmet are turned into vegetables – which arguably justifies a manditory $300 a year catastrophic policy with a deductible of a dozen ipads. Offsetting this a little is that those without helmets just die.

    BC pills currently cost $9/month at Walgreens and Walmart, and would cost $4/month if the liability rules were changed to “no fault” – no damages (punishment) levied – just simple compensation, and only $2 a month if they were made “over the counter by pharmacist” – i.e. anyone can pick up if they get and acknowledge the pharmacists lecture about side effects that should send them to a doctor. Better yet, use a kiosk and have it do a little test and repeat as needed – until the rate of understanding well exceeds what comes from the few minutes they now get talking to their doctor (or planned parenthood PA or nurse). Better yet, rather than upsetting the body’s chemisty and cycles, bring back the IUD (once we’ve moved to NTSB-like no-fault for BC). Would be even less expensive than BC pills now given new tools – applicator technology and remote examination via smart-phone-based imaging of the cervix. Granted, we’ll have to wait for the Guilds to allow (the FDA to approve) it.

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