Friday, October 19, 2007

Why should most people oppose expanding SCHIP?

Let me start by outlining the reasons that, although often cited by opponents, simply aren't legitimate.

* The amount of money spent on the program is insignificant, both in outright dollars and as a percentage of overall spending. IF expanding the program was a good idea, then the money ought to be spent, just as money - and far more of it - is spent on programs considered necessary for the public good.

* The 'non-poor' receiving benefits ought to be a non-issue, as middle and upper income taxpayers are no strangers to receiving federal support. Leaving aside the philosophical argument of whether the federal government ought to be taxing society in order to raise revenue with which it can bestow favors on certain groups, the federal government - whether through the tax code or through outright expenditures - gives untold amounts of money to people who make a whole lot more money than those people eligible for benefits under an expanded SCHIP program.

* Likewise, I'm not bothered by the complaint that SCHIP provides benefits to non-kids (i.e., adults). It may not be clear labeling, but there's nothing conceptually wrong with adults receiving federal support for things society believes worthwhile. Adults receive federal support for buying houses and for making charitable contributions, there ought be no reason why - if we thought it a good idea - for adults to receive support for buying health insurance.

* There is something to the complaint that SCHIP puts government in the position of crowding out private enterprise, as philosophically, we ought to be in favor of the public sector doing only what the private sector can not do on its own. But while I'm not familiar with the specifics of this particular proposal to expand SCHIP, apropos of the above point, while I would oppose the government getting (further) into the business of providing medical insurance, I have no objection to the federal government subsidizing middle income taxpayers purchase of private health insurance.

* And of course, one shouldn't be against expanding the program because the Democrats are in favor of it. I know it's easy to just assume that anything the Democrats like is bad for the country, but, like the blind squirrel, the Democrats could - at least conceivably - stumble, even if for the wrong reasons, on a good idea.

The reason I have for expanding the program is that it's the wrong solution to the problem... and as such, it will only make the problem worse.

And the problem? Health insurance (which is merely a surrogate for health care) is too expensive. Expanding SCHIP won't do anything to lower the costs of health care and health insurance, in the same way that expanding student aid programs doesn't do anything to lower the high costs of attending college.

If we're concerned that the high costs of health care are making it difficult for people, then we ought to be looking at ways of reducing the costs of health care. We ought to be increasing the supply of those able and willing to provide medical care. We ought to be looking at ways of promoting competition within the medical community, whether it be between doctors, hospitals and insurance companies. We ought to be looking at ways of lowering the transactional costs of obtaining medical care: cutting down on the paperwork, reducing the amount of unnecessary defensive medicine that is done, and cutting down on the costs that the plaintiff attorneys impose on all of us. We ought to be making it easier for pharmaceutical companies to develop and bring to market new drugs, and for medical device companies to develop and bring to market new technologies.

We should be making it easier for people to buy the level of medical insurance that they want. We should eliminate the mandates that add thousands of dollars of costs, instead allowing people to ala carte choose the benefits they want covered. We ought to eliminate the state requirements that pretty much preclude insurance companies from offering plans across state lines. We ought to allow for more flexibility in how plans are set up: for those wanting to do so, people ought to be able to more easily choose high deductible/low premium plans.

And, as perversely as it sounds, at least to those liberals who just don't understand how markets work, we ought to stop penalizing and criticizing the profit making of medical providers and others in this sector. Just as profit-seeking in every other slice of our economy results in more competition, more innovation and happier consumers, so too would consumers benefit from strides in medical care and research were those in the industry allowed to rid themselves of the price controls and regulations and criticism that keeps them from pursuing all the opportunities that exist.

Those in favor of expanding SCHIP are, whether ignorantly or intentionally, not focusing on the real problem. They're incapable of seeing the forest for the trees; they see people who can't 'afford' health insurance so their reaction to to give them money for health insurance. They ought to instead focus on making health insurance more affordable, so that people who make up to 4 times the poverty line aren't priced out of being able to obtain coverage for their kids.

That is the debate we should be having... unfortunately, like with so much of what goes on in Washington, it's not...