One of Senator Kerry's biggest budget-busting items is his health care plan, which he claims will extend the same coverage to all Americans that Senators and Congressmen give themselves. Never mind that even his own campaign acknowledges, along with many analysts-and contrary to Senator Kerry's repeated rhetoric-that the plan will only extend coverage to about 25 million of the current 45 million uninsured Americans. The real problem with the plan is that it injects more government into an industry that desperately needs market forces instead.
No one disputes that the truly poor need a base level of health care. For those who really cannot afford it, emergency room visits (for real emergencies) and doctor checkups ought to be put on the government tab. But when it comes to those who can afford their own health care or when we consider optional surgical operations, market forces come into play. Health care, just like food, hotels and automobiles, is an exhaustible resource. If one must pay for one's own care, one will use the system more judiciously. But if one can use the system whenever one wants, with no tab to worry about later, then the system can become overloaded.
And this is what we see happening in government-run health care systems in Canada and Great Britain. In Canada, lines are so long for basic operations that some people smuggle themselves across the border to the United States. In Great Britain, due to rationing, you essentially cannot receive kidney dialysis-a potentially life saving procedure-if you are over the age of 65. And in the old Soviet Union, the granddaddy of all big government countries, the health care system was hardly worth the name.
In the United States, we have it right to a certain degree: those who can afford it generally purchase their own health insurance or go without. The poor are supposed to be covered by Medicaid, a state-run program that, in reality, is badly underfunded. But the system breaks down when it comes to the elderly, all of whom are covered by Medicare. Here's how it works: when you reach the age of 65, a whole new world of free health care opens up to you, paid for by the government. Medicare is indifferent to how much money you have, so the rich receive the same government support as the poor. That is a huge distortion of incentives and it causes the elderly to massively overuse the system. That, in turn, siphons off resources from the good program-Medicaid, which as any doctor will tell you, is starved. The Medicare system, in essence, is a transfer of precious health care from the poor to the rich.
Faced with this reality of too much government, what does Senator Kerry propose? More government, naturally. Essentially, Kerry wants to create a Medicare system for everyone, not just the elderly. Ignore his transparent bleatings that it really isn't a government-run program, since it allows everyone to "buy into" private insurance plans. The government still pays for the health care, which is all that matters. If Kerry gets his way, and people no longer have to pay for their own health care, we'll see a massive increase in demand, which will keep some from getting the health care that they really need. This, in turn, will lead to the rationing that we see in Canada and Great Britain and will eventually cause quality to deteriorate. It's the same failed idea of Hillary-care that we saw in the 1990s.
Instead, we ought to recognize the realities-that some young, healthy Americans choose to forgo insurance. That these Americans are uninsured is not a bad thing; it allows the health care system to allocate resources to those that actually need them. If we let the market do the work and allow the health insurance companies a level playing field, without having to worry about competing with the government, then the number of unwillingly uninsured will naturally dwindle. We should extend the same market principles to Medicare as well. John Kerry's inability to muster even the most basic understanding of the American health care system should make us all pause for thought.