Dear Mr. President,
In the State of the Union Address, referring to the health care reform proposal, you said:
"But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know."
As a matter of fact, I do. It is life-cycle health risk insurance. Prof. Ronald F. White, asked me, what exactly is "life-cycle risk insurance?", LCHI in brief.
My short answer was that it is:
1. Insurance, in its basic understanding, as a form of protection from big unexpected losses.
2. Life-cycle, as it would be a contract for lifespan of a person.
3. Common, as various LCHI programs would cover practically everyone.
4. Non-compulsory, as there would be no coercion into joining any particular LCHI plan, or not joining any at all.
I elaborated on these points here.
Mr. President, it appears that it was your idea that the health care system reform could be accomplished only by a swift legislative action. As a result, you became a hostage of the backroom Washington politics. If Washington politicians were capable of resolving this issue, they would have it done long before you became President. Hence, the pace of the legislative process in Washington is not the pivotal issue. Having Americans involved and understanding what can and what cannot be done is. I tried to explain this in my open letter, but judging from some of your remarks yesterday, it looks like that you still do not get it.
You rightfully noticed that you did not make enough effort in explaining to Americans what you planned to do. I filled this gap by pointing out that you were promising pears on a willow tree, and by expressing my disbelief in lack of scientific methods in preparing the reform, and in debating it.
However, these are not the main reasons that the reform is facing so much opposition. In my view, shared by many Americans, your health care reform proposal had very little to do with health care itself. Your health care reform proposal appears to be an attempt of using health care crisis to change the American political system; it is not about health care at all. I am still puzzled if it was your conscious decision or it just happened this way; nevertheless, this is how I see it, and I am not alone in this perception. I expect you to address this concern heads on.
Life-cycle health insurance is a concept rooted in American political traditions of individuals' freedoms and limited government. I worked on this concept in my spare time, without the resources available to the Federal Government. Hence, my proposal may need some work before it could become a valid alternative to your proposal. However, it provides a concept proving that our health care issues could be addressed in the different way than politicians in Washington conceptualized it.
I am using terms like "politicians in Washington" to underline that for someone far away from Washington, differences between Democrats and Republicans are hardly noticeable. I strongly believe that your health care reform proposal did not fail miserably at the very beginning, as it should have, only because Republicans did not have any better ideas ; for the same reasons as Democrats prepared a lame proposal.
Mr. President, this is a very important issue. Let us not waste a minute, and start from scratch. Let us ask ourselves what the ideal health care system should be. Let us debate what we can afford. Let us have more than one complex proposal on the table. Let us talk frankly about political concepts behind various proposals.
Six months after you presented your proposal, we have nation more divided than ever on this issue. How much further do you want to go on this path?
Sincerely,
Henryk A. Kowalczyk
Bolingbrook, IL
I'm curious to know on what you base this faith.
For example, in another article you say, "There are people who do not believe in the free market. Some of them cling desperately to the information asymmetry that always exist in real life free market transactions, and consider this as an evidence of the systematic inefficiency of the free market system. For them it is scientific proof that the free market does not work and government involvement is necessary. At best, this is just a hypothesis that still needs to be verified in practice."
So: the view that constant corruption leads to inefficiency, and that government intervention is needed as a remedy, is a HYPOTHESIS that needs to be verified.
Fair enough. As an scientist, I appreciate that cautious view. And I agree.
But then you say, "In practice, so far, the wealth and strength of America has been built on the concept of the free market."
Whoah there, mister. It's interesting that you see the failures of the American economy as NOT being prima face evidence of failures of a free market, but conversely you see the successes of the American economy AS being evidence of the success of a free market.
Does the raw asymmetry of this argument not bother you?
http://www.youtube.com/user/hak1010#p/u/7/GfOR-MRPIG8
My understanding how the wealth of society is created comes mostly from my observations made in Poland, then a socialistic country. I received solid Marxist’s education in economy and politics. When I applied consequently Marxist’s dialectic in analysis of the political crisis there and then, I ended up with conclusions, that someone reprimanded me that I should read other books besides those written by Milton Friedman. This was the moment I heard this name the first time.
You can go to Cuba, or just to Mexico to see how free market and government regulation affect wealth creation. You may take a less troublesome path, and read “Socialism” by Ludwig von Mises. This book is available on the internet at no charge, http://mises.org/books/socialism.pdf .
Bottom line, the failures of the American economy are not due to too much of the free market but due to too much of government interventions in it. We never will have a perfect society, with academically pure free market. Even in the times of best prosperity, we will have many failures. However, when we compare progress in different societies, or in different times, we can see that the more free market the more wealth is created in the society.
There is one hypothesis -- that free markets don't work unless there is regulation -- which you say lacks empirical evidence and needs to be verified. Some people would cite specific examples of failures of the free market system in the United States: monopolies, corruption, etc. You claim that these are NOT evidence of a failure of the free market... or are not ENOUGH evidence to demonstrate that the problem is systemic.
There is another hypothesis -- that the aspects of the U.S. economy that DO follow free market principles are the cause of U.S. wealth and prosperity. But the U.S. economy has never been a completely free market, and some people would claim that it is the mixture of free market and regulation that lead to prosperity. As far as I can see, there is very little "evidence" on either side, beyond hypothetical (and unprovable) scenarios that each side conjures up saying, "IF there were no regulation, THEN such-and-such would have happened!"
You really have no way of teasing apart causality and saying, "The successes of the American system are ONLY due to the free market and the failures are ONLY due to the regulation!" Talking about other failed nations is a non-starter, because there are SO many variables. Did Cuba fail because of regulation? Or because of their political system? Or because of their natural resources? Or all of the above?
America ’s Veterans Administration provides all of these services and could serve as the model for half of the reform solution.
All 300million people in the US could have totally free health care paid for with sales tax funding instead of insurance if all care were dispensed through government hospitals rather than private systems and it would cost $1trillion less than the $2.6 trillion spent last which left millions of people without care.
Everyone shopping in the United States would pay pennies on the dollar supporting public health care, citizens, immigrants, 40 million visiting tourists annually, and rich, poor, everybody contributes.
Private systems would comprise the other half of the solution, no government funding should be paid to private systems, nor should they be subjected to any government mandates, nor should their plans be taxed.
Everyone who receives government funded health care from any source would be picked up by national health care Medicare, Medicaid, all states, cities, school systems everything all funding and care obligations would become the federal government’s which would give totally free care to users.
The federal government’s entitlement disaster is eliminated by honoring its promises by giving care through the national systems whose cost structure is a fraction of the costs being devoured by current systems.
Private employers who would choose government care for their employees would not have to pay for or be involved in health care.
4. Non-compulsory, as there would be no coercion into joining any particular LCHI plan, or not joining any at all.
2 and 4 are mutually exclusive. You can't have a lifetime contract that can be broken at will by either party and both parties have to have recourse to compulsion, otherwise it is not a contract.