Free-Market Policies Have Their Place. We are a nation built on the principles of unfettered capitalism that have enabled generations of Americans to reach the shared American dream.
The Ideal of Free Markets—the Rights of All People to Compete Fairly in the Market Place—is a cornerstone of the land of opportunity.
But Free-Market Policies Also Have Their Limits. If we have learned nothing else from the post-Glass Steagall experiment and the resulting mortgage and banking and investment debacle, let us take this lesson with us.
Quality and Price Are the Two Competing Factors of Competition that free-market ambitions often overlook. In relation to products that affect broad national interests—such as mortgage products—such as investment opportunities—such as insurance policies—competitive freedom often works out badly. This situation occurs when the opportunity to buy and sell on price overwhelms the need to protect a product’s underlying quality.
Quality of Healthcare Paid for Under Private Health Insurance Policies exemplifies this situation. It is an example of a situation in which free-market ideals, if followed too-closely, would cause overwhelming damage to our national economic health.
So Why Would De-Regulating Insurance Be Such an Unmitigated Disaster?
A: First, Because of the Abundance of “Small Print” that insurance policies must contain, hundreds of details exist that can be hard to understand, easy to overlook, and almost-impossible to compare. It is in situations where comparisons are ineffective that free-market benefits disappear.
B: When Comparisons Can’t Be Made, cost—
price—becomes the predominant measure. When cost is the predominant measure, quality becomes temporarily irrelevant.
Quality becomes a cost deferred.
C: When the Lowest-Cost Insurance Is Bought by All, competition can hardly survive. Competitors must lower the
quality of their own policies in order to compete with lower rates. Meanwhile, those persons under-insured because of the nature of the deficient policies must continue to rely on public medical services—e.g., unnecessary emergency room visits—or suffer financial ruin despite their efforts to keep themselves adequately insured.
D: Results:1: A nation in which many people previously lacked insurance now becomes a nation in which
all people have inadequate insurance.
2: As in the current economic crisis, the deferred costs of health care inadequately covered by the deficient policies become
a tax on the entire nation.
What America Needs Now is improvement in our health care and health insurance. Deregulating the products so that less-reputable insurance companies could offer competing products based solely on price would force countless Americans to spend their
limited insurance dollars on
dangerously limited insurance products.
Our Great Nation Is Currently Climbing out of a Hole that mortgage and banking deregulation dug for us, with its shovel of free-market theory.
America’s Love Affair with Free-Market Ideals Must Never Waver
But the Essential Countervailing Ideals of Pragmatism also must never be ignored. Nor may free-market idealism be allowed to bring us to the brink of financial ruin ever again.
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