Free Market Medical Care:

A Conservative Goal

by Bert Loftman bloftman@me.com

Power Point Presentation Available


With free market medical care, individuals would pay for most of their care out-of-pocket and own catastrophic medical insurance policies.  This would occur spontaneously if it were not for federal government interference with the Federal Reserve Bank and the income tax.

Tax incentives are a motivator of human behavior.  In 1945, during World War II job-based medical insurance received a tax break.  People responded by moving to employers owning their health care insurnce, even though they lost their coverage when they changed jobs.

Both the income tax and The Fed are anti-savings.  The income tax by taking a workers pay before they have a chance to save and The Fed with inflation that devalues the saving of the people.  Together, the income tax and The Fed have converted us from a culture of savings and liberty to one of debt and dependancy.

By 1965, workers with job-based medical insurance were beginning to retire.  Many retirees lost their employer owned medical insurance and had inadequate savings. The federal government responded to this with Medicare and Medicaid.  Social Security was the first big step to the culture of debt and dependency.  Medicare and Medicaid was the second.

In 1965, most medical care was paid out-of-pocket but now most people also had a third party payer of  either job-based medical care, Medicare, or Medicaid.  This seemed like free medical care so people demanded more of it.  The providers responded to this and because there were no cost controls, they provided expensive care.  Over the next twenty years, this caused a doubling  of  medical care as a percent of the economy.

In the late 1980s, the third party payers responded with managed care.  This controlled costs things like pre certifications, practice guidelines, HMOs, IPAs, PPOs, etc.  This did not control costs and in 2010, the Democrats legislated ObamaCare and it is not working. Costs are increasing because of a bloated administration including such things as 80,000 new IRS employees to make sure people adhere to the law.  Increased costs lead to an increased numbers of uninsured.

ObamaCare was legislated in 2010 to solve these problems.  It is failing and the progressives are beginning to advocate for their real goal, a single payer system.  With this, the government pays for everyone’s health care.  Conservatives respond by trying to end ObamaCare.  If they are successful,  we would still have the problems of people losing medical coverage when they changed jobs, high costs, excessive numbers of uninsured, and central control of our medical care choices.

Conservatives can do better than this.  They should advocate for free-market medical care by ending The Fed and the income tax.  Without tax subsidies, people would move to individually owned medical insurance policies.  With increased savings, they would move to catastrophic insurance and prefer to take these policies with them when they retire.  With people paying for their own medical care, costs would drop and as this happened, it will be easier to care for them.