Monday, August 09, 2010

Peter Schiff on health care

Peter Schiff, who is running for US Senate from Connecticut, has some very good thoughts on health care in this interview:
And you have to understand, why is healthcare so expensive? The reason is government involvement in the process. If we had a free market in healthcare, if we had a free market in insurance, there wouldn't be a problem. It wouldn't be so expensive. Healthcare would be getting cheaper every year. After all, with all the new technology and medicine, it should be cheaper, just like cell phones or plasma TVs. Markets bring prices down. That's what happens as you get economies of scale and you become more efficient. But we're being denied that because of government interference.

There are things that we can do to bring down healthcare costs. And it would fall dramatically if we'd simply repeal those regulations that are responsible for the increase. It wouldn't cost the taxpayers anything. The most important thing we can do remove the subsidies for insurance, because people are over-insured. People treat insurance as pre-paid medical. But insurance doesn't work that way. Insurance is for things that are not supposed to happen, or are very unlikely, or are catastrophic and would be expensive. You don't have insurance for the flu or for a sprained ankle, or for childbirth. These are things we know are going to happen and these are things we should save our money for and pay for out of our pocket. When we do that, there are market forces, and people shop around.

If you look at medical care that is not covered by insurance, like eye Lasik surgery, the price comes down every year. It's cheaper to get the surgery today than it was five years ago. And it's more effective. The same thing with cosmetic surgery. That's getting less expensive. In fact one of the reasons that the best and brightest doctors want to go into cosmetic surgery is because there's no insurance. And so we need to get the government out, and that is a function of the tax return.

The government has to stop subsidizing insurance so that employees can get wages instead of healthcare benefits. And then they can buy the insurance they want, and they'll care about the cost. And if we get the insurance companies out of it, we can get price discovery. We can get people competing on price. Doctor's don't compete on price right now because nobody cares about the price, because somebody else is paying for it.

My father, who was an insurance agent, before Medicare came along his most popular policy was two dollars per month. That's what it cost for health insurance in this country!

TLP: He was selling health insurance?

Schiff: Yeah, he was an insurance agent. You know, back then people didn't get their insurance from their employer. They bought health insurance the same way they bought life insurance, automobile insurance, fire insurance, and we're not having a crisis in those areas. You don't have your car insurance going up ten or fifteen percent a year because we buy it ourselves, unlike health insurance. So we need to get the government out of it. We need to get the government to stop mandating that the insurance companies cover everything so that we can buy policies for things that we want to cover, not the things that other people think they should cover.

It's like, what if you had to buy a car, and every car had to be fully loaded? You had to get the sports wheels, and you had to get a sun roof, you had to get GPS. You couldn't just buy the basic car. Nobody could afford it. Why can't you buy basic catastrophic insurance without covering mental issues, alcohol abuse, all the things that people might not want. We should have interstate competition—we should have international competition! But it's illegal for Swiss insurance companies to offer insurance to Americans. Why? Why can't I buy insurance from a Japanese insurance company? We can buy foreign cars, why can't we buy foreign insurance?

Competition is good. It brings down prices. So get government out and we won't have to worry. You know, so much medicine is defensive, and malpractice insurance is so high. One of the reasons we have a shortage of doctors is because they can't afford the insurance we've made mandatory for being a doctor. So there's so many ways government is screwing up healthcare. And now since they screwed it up so much, now they're proposing this Obamacare. This is the camel's nose under the tent, because this is going to fail.

This is going to be the beginning to single-payer, socialized medicine. That is what's coming. Because the government constantly interferes with markets, they screw it up, and then blame the problems on the free market, even though it's their fault. And then they use that as an excuse to get even more involved. And ultimately they completely screw it up. If you're going to want to get healthcare, you're going to have to go to another country for it.
This is just so dead on. We need to replace the Chuck Schumers of the Senate with Peter Schiffs.

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