What would happen if the free market ruled health care

(Scheduled for Sky Hi News July 10-12)

One of the hardest to grasp arguments made by those who  opposed the original Trumpcare  Senate bill is that it did not go far enough . The Senate and House versions did not repeal  the structure of Obamacare . Their argument: if you just let the free market work without regulation, then all premiums would decrease  so all could afford insurance, or at least more could afford insurance. It is an appealing theory, but simply repealing Obamacare without a replacement  or even the Senate version would not  have restored the free market to health care because there are other barriers not touched by Congressional action. Besides there is not a profit to be made if patients are unable to pay for their services or the product insurers sell is not worth the cost  to consumers.

Remember what it was like before Obamacare was passed?  An estimated 45,000 people died a year  before Obamacare because they did not have health insurance per a Harvard study.  The number one cause of foreclosure and bankruptcy was the inability to pay for health bills  . By 2026 if the  original Senate version were put into practice, the number of uninsured  would be the same as it was before Obamacare.

Fundamental to a free market is that the business has to make a profit or it closes its doors.  The private market does not make a profit serving those who cannot pay for insurance, or are known bad risks.   For that reason, the least of these will  always be left without insurance unless the paying are willing to shoulder charity care costs  paid for by higher premiums or  make up the losses in higher state, local , federal taxes .

The free market requires  that consumers understand the fine print in insurance offerings and that they have a chance to make an informed , rational decision at or before the time they need insurance or care.  That is a stretch when it comes to health insurance. It is extremely complicated, as even President Trump noted.  

In reality,  most consumers never did  or do have  much of a choice. They  get their insurance through their employers whose human resource departments  give them limited choices of three plans. This would not change  except the Senate bill drops the requirement that large employers even offer health insurance as a benefit.

For a free market to work in theory there must be competition. Unlike every other kind of business except baseball and insurance, it is illegal to fix prices and benefits. However  health insurers  are free to collude to fix prices and benefits with another company since they are exempted from federal anti- trust action.

When Obamacare was scored in 2009,  the Congressional Budget Office noted that cross state insurance sales ( you can buy insurance from another state's provider)  would make insurance more affordable for a few million, a drop in the bucket.  Without required benefits and standards, the cheaper, poorer coverage wins out. The Senate bill removed requirements and standards.   Also, all large insurers have affiliates in other states, you may also be met with an affiliate of that  same company in your home state.

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I just listened to a panel of physicians, on TV, mostly big city specialists, who have the opinion that Trumpcare is better for patients for one reason: choice. I am a widow of a physician. Give me a break. 22 million people will not have health insurance and have no choice of a physician they can afford and will rely on charity care and the ER. Since our family was well heeled by a high earning family head, how easily is it to imagine how a family living of 26K a year affords health care. Even those of us with insurance in the private sector before Obamacare, I had no choice since I was in an HMO and had to stay within the network. In fact, now on Medicare, I have a supplemental that is also an HMO. Even PPO's have preferred physicians. Two of my children have health insurance provided by an employer and their choices of plans are limited to 3 options picked by their human resources department. None of that would change if the Senate Trumpcare version were passed.

Much of the pre Obamacare data can be found at www.mufticfrom.com and in archives there at that site covering the years 2007-2009.

http://news.harvard.edu/gazette/story/2009/09/new-study-finds-45000-deaths-annually-linked-to-lack-of-health-coverage/#_=_

http://smallbusiness.chron.com/cost-shifting-23849.html