On Obamacare and the Free Market

Many of my contemporaries are posting and blogging about the PPACA, also known as "Obamacare", which rolled out its public health insurance marketplace in October. The most consistent complaint I read about the program is that it sets a new precedent of governmental intrusion on private citizens by requiring us all to purchase a product, namely: a health insurance policy. The law is set up this way so that the economics of heath insurance underwriting will work -- healthy individuals' premiums today cover sick individuals' costs today and provided a reserve for the costs of tomorrow.

It is worth considering how we as a county find ourselves crossing this precedent of intrusion. You would think (wouldn't you?) that industries operating in a free market would police themselves from a standpoint of enlightened self-interest so as to not require regulatory intervention. But in case after case, industries have failed to do so.

Take the revelations about the US meat-packing industry in 1905 that led to the founding of the (precursor to) the FDA. Or the 1910 phosphorus match industry study that produced high taxes, forcing the industry to innovate a safer technology for their workers. When the harm done by an industry flying the free market banner outweighs the benefits of waiting for the unseen hand to remedy the situation, governments have acted and always will act.

You may not be of the opinion that there was a crisis in healthcare access (via premium inflation or underwriting restrictions). However, a sober survey of business articles from 2003 until the housing crisis shows that US health care costs were consistently cited as one of the top problems threatening the US economy.

When you consider the trend of US demographics going forward toward the next 30+ years, it becomes less surprising that the PPACA is the new FDA or SEC of our time.