America’s health care crisis is, of course, a central concern for voters. And it’s come up in several of the debates. Space constraints preclude an in-depth dissection of Obama and McCain’s competing ideas (you can read good analyses here and here). It is, however, worth exploring the premise behind the McCain approach to health care. It’s called “moral hazard,” a well-worn concept in economics that contends, in a nut shell, that if people are given the incentive to make reckless decisions, they will. When it comes to the inflating of multi-trillion dollar asset bubbles, the term doesn’t typically pass the lips of most right-wing commentators or policy makers (until after those have burst in our collective faces). Concerns about Moral hazard are, however, central to most current right-wing proposals for dealing with America’s health care crisis. The basic problem, from a moral hazard perspective, is simple: because health insurance makes accessing health care free, or nearly so, Americans have no disincentive to use it. As a result we get spiraling costs and an increasingly unsustainable and unworkable system.
At the root of this perspective is the belief that our crisis is primarily a behavioral problem. It’s not price-gouging insurance or pharmaceutical companies; nor is it monopoly patents on drugs and other medical devices; or the stress-induced health problems of living in a society with stagnating living standards; or lack of access to decent primary care and preventive services. Instead, the problem is Americans’ bad habits. They over-eat, they don’t exercise and they paper over these personal failings by electing to purchase the most expensive drugs and access the most costly procedures. And they feel entitled to all manner of treatments, from the fanciest state-of-the-art technology to the most exotic alternative remedies.
In plain English, we overuse health care because we have no incentive not to overuse it. We are like kids in a candy store unable to control our urges and indulged in our bad behavior by a system of perverse incentives. What we need, therefore, is some sobriety, personal responsibility and limits to our reckless inclination to access expensive health care procedures every time we have a runny nose or fail to control our own bad habits.
As McCain health adviser Al Hubbard told a conference recently:
“When a third-party pays for a service or product-we consume it as if it was free…if you would think about, the employers rather than providing health care insurance they provided food insurance. So every time you go to the grocery store you just take out your food insurance card, you give it to the cashier, she scans it, and you’re outta there. Pretty soon, you would start buying caviar, expensive steak, and you start buying more than you need, and also pretty soon the supermarket would discover that you really didn’t care about price, so the supermarket would remove price, because it doesn’t affect your decisions about what to buy and what not to buy.”
McCain’s health proposals follow from Hubbard’s logic: reduce overly generous employer-based coverage over time by steering more and more Americans into individual plans that will force them to make hard choices about their medical care – either to purchase more expensive plans or to buy cheaper ones that have much higher deductibles and co-pays and cover fewer potential medical problems. This will force Americans to be cost sensitive and, as a consequence, act more frugally and responsibly about health care.
Of course, in the real world, insurance doesn’t cover 100% of health care costs. Rising deductibles and co-pays are a universal reality. In addition, many Americans face the nightmare of fighting with their insurance company over whether a particular visit or procedure will be covered, which often deters pursuit of treatment.
For these and other reasons, most Americans already are cost sensitive about health care.
However, accepting McCain’s logic, it would stand to reason that the most pernicious health plans are the ones that provide the most coverage for the smallest out-of-pocket costs – the gold-plated employer-provided plans, with minimal premiums, and small co-pays and deductibles for a wide range of services. These plans would seem to pose the greatest danger to America by encouraging their beneficiaries to mindlessly burn through scarce health resources.
There is perhaps no plan that better fits this description than the one enjoyed by members of the United States Congress, including John McCain. And since conservatives love to talk about personal responsibility and good role models, perhaps an ideal place to begin fixing our sick system would be for John McCain to renounce and refuse the destructive Rolls Royce health insurance that he currently receives through his employer.
A cynic might conclude that, as with so much else, conservative doctrine on health care follows from the belief that if you are rich and well-connected, you deserve whatever you can get your hands on but that if you are an ordinary, unconnected American, you can go fuck yourself.
But if McCain is sincere and genuinely believes his own diagnosis of America’s health care crisis, I would urge him: reject the profligacy of comprehensive health care coverage. Reject the siren song of unfettered access to health care. Reject the temptation to dodge personal responsibility when you make health care decisions. Renounce your government-sponsored, free-ride-inducing health insurance. John McCain tells us that he has always fought for his country and he vows, as President, to fight for all of us. It would be an easy but powerful first act to do what’s right by his country by rejecting the very kinds of insurance policies that he believes have brought us so much harm.