Marxist Healthcare: Separating the Truth from the Bolshevik

The low availability and high cost of health care coverage in the United States necessitates reform. Conservative views employed by the Republican Party define health care as a competitive commodity, and not an inherent right. The Democratic Party, on the other hand, perceives health care as a universal right and not a privilege. Under the current capitalist health care market, coverage is rationed such that many Americans do not have access to affordable health care. Health care costs account for a significant portion of the lower and middle class expenditures and are contributing to the growing income disparity in the United States. [1]
H.R. 3962, also known as “The Affordable Health Care for America Act,” passed the House of Representatives on Saturday November 7th following months of debate and widespread media attention. This legislation, if made into law, would impose necessary reforms on America’s health care system. The House’s legislation prohibits health insurers from charging different rates or refusing coverage based on gender or medical history. [2] Refusing coverage based on medical history unfairly discriminates against patients while subsequently raising costs for hospitals and the government by artificially reducing the number of insured patients. The bill places a surtax on workers’ wages up to 8%, which is applied to employers not providing health insurance coverage. While this surtax raises fixed costs for all industries limiting consumption, it encourages employers to expand health care coverage. The Act further expands coverage by extending Medicaid to 150 % of the federal poverty level, subsidizing low and middle-income Americans to buy insurance, and implementing a public option for government-run health care. These measures directly reduce consumer costs and improve the overall quality of life. A government-run insurance plan increases competition in the health care industry by offering an alternative to the private sector, thus increasing the supply of health care and decreasing consumer cost.
The status quo is a laissez-faire market that fails to correct inefficiencies in the health insurance market: the uninsured rate has remained relatively constant for almost two (2) decades[3], and the rate of underinsured Americans is of even greater concern. [4] The private sector has failed to correct itself and expand overall coverage. Despite skepticism surrounding federal regulation over the health care, industry reform is necessary. The federal regulatory system outlined in the legislation does not, as former governor Sarah Palin (R-AK) claimed, assemble “death panels” to decide the worth of human life. In fact, the disarray from a lack of federal regulation discourages the preservation of human life as coverage availability and premium costs determine the fate of car crash victims and patients in critical condition, often siding with economics over morality. All twenty-two of America’s fellow rich, developed countries have universal coverage that reduces many costs from dead weight loss while assuring health care. The public option and federal regulation would cut many state government costs thus reducing state budget deficits, a major problem for many state governments. Current Senator and former Governor Mark Warner (D-VA) explains: “I wish the President would have started the debate by explaining to the American people that our current health care system is not financially sustainable, for even another decade. Driving down health care costs should have been the focus of the debate.” [4]
This Act further promotes competition by repealing the insurance company exemption from anti-trust laws, a policy abused by growing health insurance companies. Anti-trust regulation increases competition by limiting the market share of any single company or group of companies. This increases allocative and economic efficiency by preventing monopolistic controls like price fixing and artificial shortages. The Act also prohibits abortion coverage in the public insurance plan, requires Americans to obtain health insurance, and lastly taxes the income of individuals making over a half-million dollars (and families making over a million dollars) by 5.4%. [2] Speaker Nancy Pelosi estimates that the Act will reduce Medicare costs up to 400 billion dollars and reduce the U.S. deficit by 100 billion dollars over ten years[3]. These rough estimates are not exact, but their interpretation of the economic effects of the Act is correct: it will help reduce government spending and eliminate much of the dead weight loss in the private sector. The issue of health care reform cannot be measured strictly by economic gain.
The government best serves the people by interfering in the market when the market fails to correct itself. While middle class Americans stretch their incomes to afford health insurance, drug patent laws are abused by pharmaceutical corporations that devote their excessive profits to advertising and higher salaries instead of drug research and development[6]. The availability of employer-paid insurance dramatically increases with higher income. [1] 56% of lower-middle income Americans have employer-paid health insurance, while only 22% of bottom income Americans have employer-paid insurance. Furthermore, many issues of cost such as prescription drugs are resolved with health care reform. In a multi-payer universal coverage system like Germany, prescription drug prices are much lower. Pharmaceutical corporations are subsidized by the United States government and must compete against a well-organized, coherent health care system with greater bargaining power. This institutional component of universal health care, combined with greater use of generic drugs, can reduce prescription drug costs up to 85%. [7]
From all facets of the health care debate, reform is simple: the American health care system is fundamentally flawed and unsustainable. Passing health care reform has economic and social benefits. T.R. Reid, author of The Healing of America, goes further and defines health care reform as a moral imperative that the United States must address: “It takes a strong leader to make (special) interests accept change.” Coverage and treatment for all citizens is fitting and proper for the world’s richest country. The health care debate will not be finalized until the Senate and the House of Representatives pass identical legislation to be signed by the President. The final outcome and results of this provisional legislation are unpredictable, and Democratic reform is still uncertain

References
[1]http://www.mckinsey.com/mgi/publications/income_disparity/
[2]http://docs.house.gov/rules/health/111_ahcaa.pdf
[3]http://dyn.politico.com/printstory.cfm?uuid=A20BAE8D-18FE-70B2-A81B44E9E0C28825
[4]http://www.politico.com/livepulse/1109/Warner_Obama_misplayed_health_care_.html
[5]http://www.thetowerlight.com/a-system-for-the-people-not-for-profit-1.2031959
[6]http://www.therubins.com/geninfo/advertise.htm
[7]http://www.ospirg.org/home/reports/report-archives/health-care/health-care/paying-the-price

Kenneth Colonel
Class of 2011
College of Arts & Science

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