Saturday, March 24, 2007

Why the GOP plan on health care is still wrong

The GOP has a health care plan, but it shows GOP statism. Because it enables free market forces to lower health insurance costs, it's an improvement on what we have today (which is superior to the Democrats' socialized medicine schemes).

But this GOP plan illustrates what's so wrong with Republicans and government. First off, the plan depends on the manipulation of the tax code. Our income tax is a terrible burden in itself, so any plan that depends on it accepts the statist position that the income tax is acceptable. Worse, our income tax code is outrageously convoluted, and it's the game board for all the corporate lobbying that goes on in Washington. Another modification just makes it worse. Any plan that relies on the income tax by necessity further embeds the income tax in government and strengthens all the corruption of politics that goes with it.

I have a far simpler solution.

Part 1: adopt the FairTax. This will get rid of one of the main drivers of health care costs - the health care exemption for businesses who supply health plans to employees. It's this third party health care that creates an overabundance of demand, driving up prices. When citizens get to keep their own paychecks and become direct health care costumers, competition thrives, and prices drop.

Part 2: remove every government restriction and mandate on health care. As I've pointed out elsewhere, every time the government interferes in the free market, it hurts competition. Health care restrictions and mandates work for the big providers, hurt the small providers who have smaller incomes to use to comply, and raises the barrier to entry for new competition. The result is that both workers and consumers suffer from the restricted competition.

This is a simple, one-two punch that will knock out health care costs by truly empowering the free market. This is far superior to some government controlled attempt to direct the free market by manipulating the income tax.

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