If there is one axiom conservatives and liberals can agree on, it is this: It is difficult to undo social programs. Take Social Security. In 1982, Social Security became known as the “third rail” of politics, a taboo to be addressed by politicians only at the risk of becoming a social outcast or worse yet, a political corpse. One can hardly blame the citizenry for resisting politicians who try to take away some benefit they have come to depend on, even if the electorate agrees any benefit was suspect from the very beginning and the economic soundness was tenuous at best. In other words, you don’t go against old people and their retirement.
However, George W Bush touched the “third rail” of Social Security twice and survived both times. In 2001, ongoing discussion about 9/11 and terrorism minimized the impact of President Bush’s Commission to Strengthen Social Security Report released in December of that year. And In 2005, President Bush was never able to sell the idea to the American people. They simply paid little attention to him. But it seems he paid no price.
In some ways, things have gotten worse politically. Today, even at the height of the Tea Party movement little consideration is given to revamp or replace Social Security. Now, even a failure to embrace new social programs is considered unrealistic or foolish. What is the “third rail” in this political cycle? Perhaps it is the generally accepted idea that insurance companies should have to cover those with pre-existing conditions. Who could be against that? The prevailing view is that only heartless Barbarians and Neanderthals wanting to take us back to the stone ages could oppose it. Even Mitt Romney included this requirement in MassCare, as Obama did in Obamacare.
Enter Mike Huckabee, stage right. At the recent Value Voters Summit, he took on the new third rail. On this issue and a few others, he is a one-man party of “no” (and makes more sense than most East and Left coast economists put together). He is consistent on this kind of thing and is the only candidate leftover from 2008 that opposed the 2009 and 2007 stimulus packages as well as the TARP bailouts. He views the process on insurance as a kind of domino effect, with each new tip-over bringing about more loss of freedom.
Loss of Freedom #1: Requiring coverage of pre-existing conditions means some customers will certainly cost the company much more than the customer could ever pay in (He compares it to getting a vehicle insured after it is already wrecked or insuring a house that has already burned down[1]).
Loss of Freedom #2: The only way to make up for the loss from #1 is to raise rates higher on everybody else (few want that option since premiums in many places are well over $10,000 per year already) or require everybody to pay for insurance whether they want it or not.
Loss of Freedom #3: The only way that will work is to fine people more than the cost of insurance premiums. Nobody has done that yet, but simple laws of economics will eventually require it. Otherwise, many people will just wait until they are sick to get insurance, as Huckabee points out.
Loss of Freedom #4: Higher costs will mean some companies quit offering insurance to its employees, which means more insurance companies like Principal Financial Group of Des Moines, Iowa will get out of the insurance industry altogether. In turn, less competition means higher prices and even less options for customers.
Loss of Freedom #5: The Domino Effect will continue to destroy the health system. For example, when some companies try to exclude certain conditions this often results in more government regulation (as in Massachusetts) but because even governments recognize limits on what companies can do, the bureaucrats eventually pinch on the other end, resulting in rationed care. This will happen more and more as the whole system moves towards a single payer of medical bills, the US Federal Government, which is already staggering under the weight of trillions of dollars of debt.
Loss of Freedom #6: Another way governments try to “help” customers is limit the amount doctors and hospitals can charge for services (reducing reimbursement rates). But reducing costs in this way often leads doctors to go out of business as well. Although insurance companies also cap costs or limit coverage, demand for this coverage drives the free insurance market to make them available (as long as the government doesn’t interfere).
Loss of Freedom #7: Huckabee knows that a single-payer system (socialized medicine) cannot allow individuals to pay for their own medical care. It goes against the envy-driven mentality behind the whole notion of universal health care. It just wouldn’t be fair if “people with money” could use their own filthy lucre to buy medical treatment while everybody else was dependent on the government. Socialism not only eventually kills the free market, the free market destroys socialism. It is a fight to the death. One system or the other must prevail, they cannot both survive.
Governor Huckabee has common sense on economic issues and his principles allow him to face even potential voters with hard truths. In early 2009, an audience member on Huckabee’s Fox News television show asked Huckabee what the government should do since he, the audience member, was uninsurable due to a chronic condition (though he was not disabled). The man had many options (getting a job with insurance benefits, or getting help from family, church, or charitable organizations and hospitals). The federal government was not offered as an option, not because Huckabee is heartless but because he knows that the system cannot possibly sustain itself and remain the freest in the world.
In addition, I would argue that permanently reducing government regulation on the industry would increase competition and lower prices even for those with pre-conditions. Too many states now forbid companies from offering catastrophic insurance; allowing that kind of coverage would free up insurance funds usually paid out for ongoing treatment of chronic diseases to be used to cover those with pre-existing conditions. Eliminating the law forbidding customers from buying insurance across states lines would free up the industry to a certain degree from both federal and state economic regulators, further enhancing competition and making us more free, not less.
[1] Shamefully, some accuse Huckabee of not caring for the welfare of sick people. But this is patently unfair. He has answered these critics. He knows the system as it’s now headed cannot sustain itself and like Sarah Palin recognizes that rationing will eventually lead to death panels.