Anyone who has studied history and economics and who has an IQ above three understands that price controls don’t work.
Unfortunately, price controls are always the first choice of politicians.
The most recent example of this is in what is called “Surprise Medical Billing.” Surprise medical billing is exactly what it sounds like, only worse. It is the insurance equivalent of a letter telling you the nice gentleman from the Internal Revenue Service wants you to pay a lot more than you paid on April 15.
Surprise medical billing happens when the insurance company, in its infinite greed, decides that while your procedures may have been covered, you were “out of network.” So, you are going to be slapped with a huge extra bill.
Insurance companies have destroyed the free market in medicine. They are the primary driver for the cost of medical care, because there is no price competition. And now, insurance companies and their allies in Washington, want to make things worse.
Consumers have screamed loudly about this practice and unfortunately for America, Washington is listening. A host of the usual suspects have jumped in to “help” consumers and instead of offering free-market solutions, they want to offer more central planning.
The denizens of the Washington swamp want to give us government price controls on surprise medical billing. What could possibly go wrong?
Various proposals are floating around Congress. All of them involve some type of government price controls.
The end result of all of these proposals will be that the insurance companies make more money, even after setting record profits. These proposals will cost doctors money and will ultimately cost the consumers even more money.
Liberals love insurance. They do for one simple reason. Insurance destroys the marketplace. The only concern people have are their deductibles and co-pays. They have no idea how much a procedure costs and don’t care as long as it is covered by insurance. And insurance companies dictate the prices to the doctors and hospitals.
The best solution would be to simply abolish insurance. Unfortunately for Americans, insurance companies are too powerful. The only other thing we can do it pressure Congress to make sure more price controls are not put in place and to encourage Congress to enact policies that would create more competition in the medical and insurance sector.
Is this a good idea?
Well the difference between conservatives and liberals is that liberals want to keep trying the same old failed ideas over and over again, while conservatives rely on evidence.
There is a great, evidence-based case study on how limiting insurance benefits consumers. Twenty-five years ago, Lasik debuted. It was not covered by insurance and back then it cost thousands of dollars per eye to get Lasik.
Because insurance did not destroy the marketplace, today Lasik doctors compete on price, quality and luxury. Where Lasik once cost thousands of dollars per eye, today’s Lasik doctors will charge $299 an eye and will finance the surgery for you.
That is the free market in action.
The proposals to end surprise medical billing do just the opposite. They do not harness the power of the free market to benefit consumers. Congress would be better off doing nothing. Gideon Tucker’s famous quote, “No man’s life, liberty or property is safe when the legislature is in session,” could not be more accurate here.
If Congress won’t do something beneficial, like abolishing insurance or at least creating free-market incentives to lessen the control insurance companies have over the lives of Americans, then the best thing Congress can do is nothing.
Perhaps they should learn from the doctors. “First do no harm.”