Bruno
11-01-2009, 09:23 AM
http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=2009911010314
How often do you see commercials on television that promote low auto insurance rates? Between Geico, Progressive, All State and Farmers Insurance, the airwaves are saturated with companies zealously competing for our car insurance business.
How often do you see ads on TV competing for our health insurance business by promoting lower rates? Never.
Critics of the health insurance industry suggest the problem is capitalism run amuck, that government needs to step in with draconian new regulations, or perhaps even take over the entire industry.
Filmmaker Michael Moore broadly proclaims capitalism an evil system in his latest movie.
I humbly demur.
Capitalism has been wildly successful, its superiority measurable and significant. Economic freedom is its lifeblood.
The Wall Street Journal and the Heritage Foundation produce an annual Index of Economic Freedom to measure the impact economic freedom has on competing nations. They take into account these variables: business, trade, fiscal, monetary, investment, labor, and financial freedoms; government size; property rights; and freedom from corruption.
The index lumps countries into one of five categories based on their degree of economic freedom: free, mostly free, moderately free, mostly unfree and repressed. Economies that are "free" and "mostly free" outshine everyone else. They enjoy per-capita incomes double everyone else's, and a whopping eight times higher than "repressed" countries.
Economically free nations are not just richer in terms of standard of living, they are richer in terms of human development as measured by the United Nations Human Development Index. Literacy, education, and life expectancies are all better, thanks to capitalism. (Find out more at www.Heritage.org.)
So economic freedom isn't evil, as Moore and many of his acolytes proclaim. If you go by the results, it is morally superior.
If capitalism is so great, why is it failing us when it comes to health insurance?
I suggest that capitalism is not the root problem with the health insurance industry, government is.
We all see the problems. Premiums are choking us to death. The number of choices is declining. We're worried about whether we'll have coverage tomorrow. Our policies aren't portable if we trade jobs.
What went wrong?
Let's play with history. Let's pretend the government did to auto insurance what it did to health insurance. The date is Oct. 26, 1943. The IRS tells employers they can provide car insurance to employees paid with pre-tax dollars.
Fast forward to July 30, 1965. In order to help senior citizens pay for auto insurance premiums, Congress passes the landmark MediCar legislation. Congress projects that the program will cost tax payers $12 billion by 1990. They undershoot a bit. Actual MediCar cost comes in nine times higher at $110 billion. By 2009, it triples again to over $300 billion! By 2013, MediCar's reserves will be depleted, and we'll begin paying for senior car care out of our already strained federal Treasury.
MediCar only pays body shops 80 cents on the dollar for repairs for their insured. Body shops are forced to make up for it by charging non-MediCar customers more.
Auto insurance premiums begin to soar.
State and federal governments tell drivers that they can't purchase car insurance policies from companies in other states. Competition declines. State governments begin imposing mandates on auto insurance companies forcing them to provide expensive features to their products.
Auto insurance premiums soar through the roof. Non-seniors not covered by tax-advantaged employer plans are priced out of the market. We have a full-blown crisis.
Democrats call for a government option.
Back to reality. In the last 10 years, auto insurance premiums have only increased about as fast as inflation according to my agent at Farmers Insurance, Larry Johnson. On the other hand, health insurance premiums have increased four and a half times the rate of inflation in the last 10 years, according to the Kaiser Family Foundation.
Government intrusion in the marketplace is the problem, not capitalism.
How often do you see commercials on television that promote low auto insurance rates? Between Geico, Progressive, All State and Farmers Insurance, the airwaves are saturated with companies zealously competing for our car insurance business.
How often do you see ads on TV competing for our health insurance business by promoting lower rates? Never.
Critics of the health insurance industry suggest the problem is capitalism run amuck, that government needs to step in with draconian new regulations, or perhaps even take over the entire industry.
Filmmaker Michael Moore broadly proclaims capitalism an evil system in his latest movie.
I humbly demur.
Capitalism has been wildly successful, its superiority measurable and significant. Economic freedom is its lifeblood.
The Wall Street Journal and the Heritage Foundation produce an annual Index of Economic Freedom to measure the impact economic freedom has on competing nations. They take into account these variables: business, trade, fiscal, monetary, investment, labor, and financial freedoms; government size; property rights; and freedom from corruption.
The index lumps countries into one of five categories based on their degree of economic freedom: free, mostly free, moderately free, mostly unfree and repressed. Economies that are "free" and "mostly free" outshine everyone else. They enjoy per-capita incomes double everyone else's, and a whopping eight times higher than "repressed" countries.
Economically free nations are not just richer in terms of standard of living, they are richer in terms of human development as measured by the United Nations Human Development Index. Literacy, education, and life expectancies are all better, thanks to capitalism. (Find out more at www.Heritage.org.)
So economic freedom isn't evil, as Moore and many of his acolytes proclaim. If you go by the results, it is morally superior.
If capitalism is so great, why is it failing us when it comes to health insurance?
I suggest that capitalism is not the root problem with the health insurance industry, government is.
We all see the problems. Premiums are choking us to death. The number of choices is declining. We're worried about whether we'll have coverage tomorrow. Our policies aren't portable if we trade jobs.
What went wrong?
Let's play with history. Let's pretend the government did to auto insurance what it did to health insurance. The date is Oct. 26, 1943. The IRS tells employers they can provide car insurance to employees paid with pre-tax dollars.
Fast forward to July 30, 1965. In order to help senior citizens pay for auto insurance premiums, Congress passes the landmark MediCar legislation. Congress projects that the program will cost tax payers $12 billion by 1990. They undershoot a bit. Actual MediCar cost comes in nine times higher at $110 billion. By 2009, it triples again to over $300 billion! By 2013, MediCar's reserves will be depleted, and we'll begin paying for senior car care out of our already strained federal Treasury.
MediCar only pays body shops 80 cents on the dollar for repairs for their insured. Body shops are forced to make up for it by charging non-MediCar customers more.
Auto insurance premiums begin to soar.
State and federal governments tell drivers that they can't purchase car insurance policies from companies in other states. Competition declines. State governments begin imposing mandates on auto insurance companies forcing them to provide expensive features to their products.
Auto insurance premiums soar through the roof. Non-seniors not covered by tax-advantaged employer plans are priced out of the market. We have a full-blown crisis.
Democrats call for a government option.
Back to reality. In the last 10 years, auto insurance premiums have only increased about as fast as inflation according to my agent at Farmers Insurance, Larry Johnson. On the other hand, health insurance premiums have increased four and a half times the rate of inflation in the last 10 years, according to the Kaiser Family Foundation.
Government intrusion in the marketplace is the problem, not capitalism.