Everyone is talking about health care.
If you consider yourself a conservative, you might have felt a spark of excitement when Congress motioned to repeal the Affordable Care Act, or Obamacare, only to be let down once you learned lawmakers fell short of putting an end to President Barack Obama’s signature law.
But to those who are serious about free market principles, the entire debate revolving around the end of of ACA is somewhat frustrating. That’s why health care in the United States hasn’t been good for decades, and Obamacare just made it a tad worse.
By the mid-1960s, the United States started to experience what heavy-handed intervention in the market does to supply and demand of services, and how it inflates the costs of such services.
With the passage of Medicare and Medicaid and new regulations that artificially trimmed the supply of doctors and hospitals, Americans noticed an increase in health care prices that, according to Mike Holly, “responded at twice the rate of inflation.”
Over time, medical special interests continued to lobby government for more regulations, further restricting competition and making it harder for members of the medical profession to make their services available at a lower cost.
With government’s involvement, demand for medical services increased thanks to subsidies, but with the restrictive regulatory monster only growing stronger with each passing decade, the supply of physicians, clinics, hospitals, and pharmaceuticals was further restricted.
As consumers began reporting hardships having access to care thanks to government’s overbearing involvement, government decided to act once again, targeting high costs by “partnering,” once again, with well-connected service providers and offering even more subsidies.
ACA, or Obamacare, is what happens when government tries to fix the problem by repeating its past mistakes.
With the passage of Obama’s signature health care law, the government ramped up subsidies, causing demand to continue to grow artificially while the supply was reduced thanks to the greater number of restrictions imposed on the market. As a result, powerful health care industry leaders grew into more powerful monopolies while entrepreneurs and independent physicians and clinics became overwhelmed and were forced to succumb to the system or get out of it completely.
So when Congress talks about repealing Obamacare as the only measure necessary to put an end to the incredibly maddening situation we find ourselves in today, don’t believe them.
For America to have a true free market system that will guarantee lower prices and increased supply of health care services to everyone, we must look beyond Obamacare. Or, as Mises Institute’s Ryan McMaken put it, we must “focus on repealing and undermining the edifice on which Obamacare was built: the highly regulated, subsidized, and manipulated healthcare markets that dominate today.”
Is Congress listening?