The simple reason the free market won’t work in healthcare

To the Editor:

In late September, the Senate decided it will not bring the Graham-Cassidy healthcare bill to the floor for a vote — dooming its future after failing to get enough Republicans to commit to voting for the bill.

The failure to pass Graham-Cassidy marks the fourth failed attempt from congressional Republicans to repeal and replace the Affordable Care Act, better known as Obamacare. Previous attempts include the American Health Care Act (ACHA), the Better Care and Reconciliation Act (BCRA) and the Health Care Freedom Act (Skinny Repeal).

The Graham-Cassidy proposal was met with public backlash. According to a poll released by Public Policy Polling, only 24 percent of Americans approved of the Graham-Cassidy repeal effort. This is largely because the Congressional Budget Office (CBO) stated that the bill would result in “millions” of Americans losing coverage as a result of the bill.

The CBO’s poor scoring isn’t the first negative review to be given to a Republican healthcare bill. Past repeal and replace attempts, the ACHA, BCRA and Skinny Repeal, were projected by the CBO to increase the amount of people uninsured by 23 million, 15 million and 16 million, respectively.

The gameplan for Republicans seems pretty straightforward: Create a plan that will lead to more people being covered, not less. If they can do this, their repeal and replace efforts will be a success. But they’ve tried and failed four times. Why?

It’s simple: Republicans have been trying to repeal and replace Obamacare with plans that resemble a more free market structure.

But the free market doesn’t work in healthcare.

Think about the purpose of capitalism. In capitalism, the ultimate goal is to maximize profits as much as possible for yourself and the establishment you work for. Using profit as an incentive is a very good thing in most scenarios. Profit incentives increase competition and increased competition leads to not only lower prices, but also a wider range of options for the consumers to choose from.

But applying the profit incentive to healthcare is ineffective and dangerous. Simply put, the goal of free markets is to make money, but sick people are very expensive.

Insurance companies make money by pooling their customers’ money together in the form of premium payments and deductibles. They use some of that money to share the costs of their customers’ health expenses and keep whatever they don’t spend as a profit. The insurance company can only generate a profit if they don’t spend everything they collect on health care payments.

This creates a system that treats sick people worse. If someone wishes to purchase an insurance plan they become very unattractive to insurance companies if they suffer from a serious medical condition. This is because insurance companies would likely be spending a lot of their money making payments on that patient’s health care expenses, cutting into their profits.

To avoid this, insurance companies face a few options. One option is to make that person pay a higher premium, as well as a higher deductible and lower the copay amount. Or, they could reject that person altogether, and prohibit them from purchasing a plan. If someone is faced with the first option, they’ll need to be earning a relatively high salary to manage the expenses. If they’re poor, they’d resort to just not purchasing a plan at all. If someone is faced with the other option, that person would be forced to pay all of their healthcare expenses out of pocket, which would be extremely difficult for most incomes.

Ultimately the United States needs to go down a more simple, obvious route. If you take a look at the best healthcare systems in the world, you’ll find that they are some form of universal system. And a quality that they all share is that government plays an active roll in two things:

• Providing generous financial assistance for every person’s health care expenses, and
• Being heavily involved in the process of setting the prices of health services and prescriptions.

Until we adopt a system that reflects those qualities, we won’t be able to cover everybody.

-Taylor Nguyen