Mike Kueber's Blog

June 9, 2012

Socialized medicine – a/k/a one-size-fits-all

With the advent of ObamaCare, the term “socialized medicine” has once again moved to a prominent place in American politics.

According to Wikipedia the term, which was first used in America in 1947 by the AMA in opposition to a Truman health-care initiative, is almost always used pejoratively because socialism has historically had a bad connotation in America.  Recent surveys, however, reveal that younger Americans no longer have a great antipathy toward socialism and that the term “capitalism” has its share of negative connotations.

Wikipedia defines socialized medicine as “a system for providing medical and hospital care for all at a nominal cost by means of government regulation of health services and subsidies derived from taxation.”  Technically, that definition would not apply to ObamaCare because ObamaCare does not entail the government actually providing medical care.  Instead, medical care is privately provided.  ObamaCare does, however, produce so-called univeral health care with a single-payer mechanism for insuring the poor and a fine to punish the non-poor who decline to buy medical insurance.  

But I think the Wikipedia definition does not do justice to the term “socialism.”  When I think of socialism, I think of the slogan popularized by Karl Marx – “From each according to his abilities; to each according to his needs.”  Marx envisioned the elimination of class distinctions, and I noticed that elimination in my orthopedic’s waiting room last week.  Although the motley assortment of patients comprised upper, middle, and lower-socioeconomic classes, all were treated alike because they shared a common characteristic – i.e., they had an insurance cards  Because of heavy regulation, medical insurance has become a fungible product, much like car and homeowners insurance.  This is especially true of employee health insurance because it is thoroughly regulated by the federal government through ERISA.  Yet ObamaCare will make ERISA regulations look like the uncontrolled days of the Wild West, and ObamaCare will apply to all medical policies, not just employee policies. 

When ObamaCare is fully implemented, virtually everyone in America will have insurance policies that provide identical coverage.  This will be accomplished by having the Secretary of Health and Human Services define the minimal coverage that all policies must contain.  But this will not be bare-bones coverage; rather, ObamaCare requires that the minimal coverage be equivalent to that provided by employee policies, which are typically the most generous.  Then, to ensure that the minimal coverage is also the maximum coverage, ObamaCare creates a luxury tax on medical policies that exceed a certain dollar threshold.  (Union-based medical policies had to be exempted because they routinely exceeded the threshold.)   It is obvious that President Obama and the Democrats prefer a medical-delivery system where one-size-fits-all.

Socialized medicine is not America’s first foray into socialism.  Our education system could also be described as socialized, with one size fitting all, and the jury seems to be out on whether that system is working.  I recently blogged about school choice, which is a relatively recent issue based on the perceived failings of public (socialized) education in America. 

As America reconsiders its socialized education policy, I think it should avoid precipitously lurching toward socialized medicine.

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