Happy 4th of July! Affordable Care Act Makes Care Less Affordable!

The first sentence from this morning’s big news story says it all (emphasis added):

Health insurance companies around the country are seeking rate increases of 20 to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected.

If we haven’t learned by now that government programs usually result in the opposite of the goals (often stated in their titles), then we deserve what we get.

Government sought to make home ownership more affordable. That didn’t end well. The price of homes were driven up before the bubble burst.

Government keeps trying to make college education more affordable. It’s no coincidence that college tuition rates have climbed consistently faster than the rate of inflation.

A good question to ponder is, why does this happen? Perhaps if more people understood the answer we could get past it.

The simple answer is that these programs increase demand for services (intended consequence) while, often, also constricting supply (unintended consequence), which increases the price.

The market is an amazing thing. It can do amazing things if we let it.

Check out any part of your life that has not needed a government program to make it more affordable or available. You have some amazing things. Shoes, tablets, food, restaurants, printers, phones, boob jobs…none of these needed government to make affordable and available to anyone. The key question is why do we think we need government to make some things affordable and available with some things, but not others?  What’s the difference between shoes and health care that makes government’s involvement so necessary?



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