The fact is that health insurance is complicated because health care is complicated. Congress may think it can wave a magic wand and declare that it should be simple, but that is like passing a law that declares ice should not be so damned cold.

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The biggest complicating factor is third-party payment. It is incredibly complicated to pay someone else’s bills — for anything. How would you like to be responsible for paying my grocery bills? Or my clothing bills? Or my transportation bills? How would you write the contract for any of that?

It is far easier to make a sum of money available to me and let me go get my own services and pay the bills myself. Now that would be an easy-to-understand contract! It would be one sentence — “Here’s $XXX. Go get your own services.”

If Congress wants health care financing to be “easy to understand,” it should remove the third-party from the mix.

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Perhaps the difference that most fundamentally separates true liberals and libertarians from others is that, to one degree or another, true liberals and libertarians are, unlike non-liberals and non-libertarians, dutiful sons and daughters of the Scottish Enlightenment. And one of the great lessons of that remarkable intellectual movement is the refinement of the understanding that state and society are not the same thing. Society is not created by the state, and the state’s activities not only do not define those of society but often diminish society’s activities.

Professor Don Boudreaux says this in the course of pointing out that FDR did much to destroy the private market for unemployment insurance. Prior to governments providing “free” unemployment insurance, many religious organizations, charities, businesses, and private societies provided it. People helping each other, reaching out, lending a hand to a neighbor in need. All of that was blown away and destroyed once the federal and state governments started providing unemployment insurance.

I found out today that it is possible to buy supplemental unemployment insurance to augment what the government provides. That’s welcome news but it’s a far cry from the vibrant assistance provided by society prior to the government’s take over.

Government has not brought us closer together by providing services that the private sector used to provide. Instead, it has pushed us further apart and made us less reliant on each other. That’s the exact opposite of the brotherly love and caring that President Obama constantly claims to want.

If you want a close knit society of caring people that look out for each other—slash government spending and get government out of the business of replacing society with bureaucracy.

Children with Medicaid are far more likely than those with private insurance to be turned away by medical specialists or be made to wait more than a month for an appointment, even for serious medical problems, a new study finds.

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The study used a “secret shopper” technique in which researchers posed as the parent of a sick or injured child and called 273 specialty practices in Cook County, Ill., to schedule appointments. The callers, working from January to May 2010, described problems that were urgent but not emergencies, like diabetes, seizures, uncontrolled asthma, a broken bone or severe depression. If they were asked, they said that primary care doctors or emergency departments had referred them.

Sixty-six percent of those who mentioned Medicaid-CHIP (Children’s Health Insurance Program) were denied appointments, compared with 11 percent who said they had private insurance, according to an article being published Thursday in The New England Journal of Medicine.

In 89 clinics that accepted both kinds of patients, the waiting time for callers who said they had Medicaid was an average of 22 days longer.

Health insurance isn’t the same thing as health care. Not by a long shot. By focusing the national debate on who has health insurance we’re missing the far bigger problem of who actually has access to care. That’s what we should be focused on instead of obsessing over how many people are subscribers to a particular type of insurance product.

Middle-class families need health insurance to protect themselves from the financial devastation of a catastrophic illness. But many (arguably, almost all) of the most serious defects of the health care system are created by third-party payment of medical bills.

After 5 years of supporting the billing departments of different healthcare organizations (and using my own healthcare), I’ve come to agree. Increasingly, I want the choice to spend my own healthcare dollars with the doctor of my choice, for the services of my choice, without having to get approval from an insurance company first.

I truly believe that the lack of competition in our current healthcare system is what’s killing American healthcare. And we won’t see true competition until we stop relying on someone else to pay our healthcare bills. Sadly, Obamacare will only make this problem worse.

Do read John Goodman’s recommendation. He describes how you could pay for healthcare yourself without bankrupting yourself.

Obamacare delenda est

“We allow the insurance industry to run wild in this country,” President Obama declared on Monday. “We can’t have a system that works better for the insurance companies than it does for the American people.”

Yet Obama’s plan to tame health insurers would boost their business, protect them from competition, and guarantee their profits, all at the expense of consumers and taxpayers. It is therefore not surprising that the insurance companies, while they object to the president’s rhetoric and quibble over some of the details, are happy to be domesticated. Here are five ways in which Obama would help insurers while pretending to fight them.

There’s nothing progressive about a plan that forces people to buy products from specific companies, under penalty of law. And there’s nothing conservative about that plan either. It guarantees profits, eliminates risks, and rips off the American public. Is it any wonder that the American public opposes this plan 2-1?

John Goodman summarized the findings this way:

Premiums for individuals and families purchasing coverage on their own will go up 54%. Premiums for small businesses will go up 20%. Both numbers are over 5 years and both numbers exclude the impact of medical inflation.

I skimmed through the study and it looks pretty interesting. The study points out that reform won’t work unless everyone is forced to purchase insurance.

The key implication of our analysis is simple: For these types of insurance reforms to be successful and sustainable, it is imperative to get broad participation. Young and healthy people need to be part of the insurance pool, and people cannot defer buying insurance until they are sick or at high risk. This is true no matter who is paying the premiums—individuals, employers, or the government.

The study then goes on to indicate that the current bill likely will allow people to free-ride, with bad results. They’re basing their conclusions on several states’ experiments with healthcare reform.

• New York and Vermont: Average premiums in the individual market today are about 60% higher than the national average

• New Jersey: Reform caused much higher premiums forcing thousands of individuals to drop coverage. The individual market decreased from 157,000 people in 1993 to 88,000 in 2007

• Maine: Individual market enrollment in Maine dropped from 90,000 to 41,000 between 1993 and 2007 following the state’s reforms.

Even in Massachusetts, there is evidence that individuals are selectively jumping in and out of the market when they need healthcare. Data from health insurers in Massachusetts indicate that the number of peopl ein the individual market with coverage of less than 12 months has doubled post reform. These individuals have a significantly higher claims to premium ration when compared to those who had coverage for more than 12 months but let it lapse or those that are active.

Without strong penalties, similar types of behavior are likely to emerge in the reformed individual market—resulting in significantly higher premiums for the insured.

This is one of the reasons why I believe that the “reform” bills will just make American healthcare worse than it already is.

Do you have a right to health care? Yes. And no. My answer ultimately depends on what you mean by a “right” to health care.

Rights come in two varieties: negative and positive. A negative right can be thought of as the right to be left alone. It’s the right to do something without the fear that someone else will restrain you. A positive right can be thought of as the right to be served. While a negative right requires only that someone leave you in peace, a positive right requires that someone actively do something for you.

I believe you have the right to work with the doctor of your choice — whether or not that doctor has been credentialed by a government.

I believe you have the right to take the drugs of your choice — whether or not those drugs have been approved by a government panel of experts. I believe you have the right to take experimental cancer drugs, especially as a last ditch attempt to save your life. I believe you have the right to take marijuana to treat pain, to build appetite, and to relax.

I believe you have the right to buy insurance from any company, located in any state, covering any combination of conditions. I belive you shouldn’t be limited to only the health insurance that covers a government approved list of condition from a government approved list of companies.

I believe in a strong negative right to health care. That’s something that doesn’t really exist in America today. Right now, you are not free to receive health care from anyone you trust, you are not free to take the drugs of your choice, and you are not free to buy whatever health care you desire. I am in favor of more freedom in health care. I believe you have a right to consume health care as you see fit, even if the majority of people around you disagree with your decisions. That’s freedom.

I don’t believe you have a right to force someone else to pay for treatment, medications, or medical supplies. I don’t believe you have a right to force a doctor to work with you. It’s one thing if you and the doctor can come to a mutual agreement regarding pay and hours of availability. It’s something else entirely to require a doctor to treat you at a price of your choosing (not his) and at a time of your choosing (not his). I don’t believe you have a positive right to health care.

To be blunt, I don’t believe you have a right to turn doctors into slaves (by requiring them to treat for free or at a steep discount) or a right to turn your fellow citizens into slaves (by requiring them to work in order to pay the bills for your health care).

The current discussion of health care rights revolves almost entirely around positive rights — getting someone else to pay for our health care. It includes an “exchange” that would strictly limit the options available. It includes subsidies forcibly taken from some people through taxes and used to pay for someone else’s health care.

It includes a requirement for insurance companies to charge everyone the same price for health care. This practice, known as community rating, allows sicker people to pay less than the cost of their care and requires healthier people to pay more. In effect, community rating is a subsidy to the sick courtesy of the healthy. Community rated health care is a very bad deal for young, healthy individuals. So the current discussion revolves around a health care mandate. Most of the plans under consideration would require young people to purchase something that’s a bad deal. They would be required to do this solely to provide a good deal to sick people and the elderly.

Claiming a positive right to health care is nothing more nor less than the claiming the right to enslave your fellow man. I don’t believe you have that right.

So here is what it boils down to: For every product or service purchase, someone makes a price-value trade-off to determine if that product or service should be purchased for a given price in that particular instance.

One option for making this decision is to have the person who actually will consume the product or service — and whose money will also be used to complete the transaction — make this price-value tradeoff.

… A second way to do this would be to have someone who has you specifically in mind make the price value tradeoffs for you. This might be like your wife volunteering to go out to buy you some new underwear.

… So a third model, and almost certainly the worst in terms of individual satisfaction, is to have a third party make price-value tradeoffs for me only with some notion of average preferences for average people, or worse, with an incentive system that has absolutely nothing to do with my satisfaction at all. This is clearly the case for the government, and is probably the case for many private insurers today[.]

When it comes to your health care choices, who do you want making your decisions? I definitely want to make my own decisions and I think most Americans would agree with me. But the reforms that are on the table would cement the status-quo. The status-quo overwhelmingly encourages us to pre-purchase our health care through expensive health “insurance” policies. Then a bureaucracy will take a look at our care and decide what to reimburse and what to deny. That’s true whether you’re on an HMO plan, a PPO plan, or a government (Medicare / Medicaid) plan.

Isn’t it time that we had real reform? Isn’t it time that we put patients back in charge of their own health care decisions?

HPW follows health insurance markets globally, and is projecting that total covered lives will exceed one billion by 2012. Single-payer systems are declining world-wide because they are primarily based in countries which have static or declining populations, while private insurance is growing rapidly in countries with the fastest population growth.

Most of this is coming from developing countries which are for the first time ever building out a health financing system, choosing to encourage private health insurance over single-payer on five continents. Examples include China, Columbia, South Africa, Mexico, India, Australia and most of eastern Europe. Most of these countries considered and rejected a single-payer system in favor of a private insurance system, and more than a dozen more are following suit in the same regions.

Private insurance is the chosen system for several reasons. In developing countries in eastern Europe there is a strong aversion to the former Soviet-style model, and western European global insurers like Allianz and Vienna Insurance Group have actually acquired the entire single payer system from the government and turned it private.

Cool.

In a free market, a business that is complacent about costs learns that its prices are too high when it sees lower-cost competitors winning over its customers.

I posted yesterday about why “exchanges” are worse than free markets. Stossel takes that on too and does a far better job than I did.

… Competition is not a bunch of companies offering the same products and services in the same way. That sterile notion of competition assumes we already know all that there is to know.

But consumers often don’t know what they want until it’s offered, and their preferences and requirements change. Businesses don’t know exactly what consumers want or the most efficient way to produce it until they are in the thick of the competitive hustle and bustle.

Nobel laureate F.A. Hayek taught that competition is a “discovery procedure.” In other words, the “data” of supply and demand emerge only through the market process. We need open-ended competition not merely to see which rival is better, but to learn things we didn’t know before and aren’t likely to learn any other way.

“Competition is valuable only because, and so far as, its results are unpredictable and on the whole different from those which anyone has, or could have, deliberately aimed at,” Hayek wrote.

The health care bills are perfect examples. If competition is a discovery process, the congressional bills would impose the opposite of competition. They would forbid real choice.

In place of the variety of products that competition would generate, we would be forced “choose” among virtually identical insurance plans. Government would define these plans down to the last detail. Every one would have at least the same “basic” coverage, including physical exams, maternity benefits, well-baby care, alcoholism treatment, and mental-health services. Consumers could not buy a cheap, high-deductible catastrophic policy. Every insurance company would have to use an identical government-designed pricing structure. Prices would be the same for sick and healthy.