In a statement released after the Supreme Court’s ruling on the Affordable Care Act, President Obama’s signature health reform legislation, Republican South Carolina Sen. Jim DeMint said, “The Supreme Court may have failed to stop this government takeover of health care, but the American people will not.”
Many Republicans and conservatives have expressed the sentiment that Obamacare constitutes a takeover of the health care industry by the government.
However, referring to Obamacare as a government takeover of health care completely glosses over all other previous interventions of government into the health care market.
In the 1940s, wage and price controls enacted by President Franklin D. Roosevelt made it nearly impossible for employers to lower or increase wages for their employees. Soon, employers were offering health benefits as a hiring incentive. In 1954, the Internal Revenue Service changed the tax code, making health benefits tax-free if provided by employers.
Of course, this change separated consumers from many of their subsequent health care decisions, limiting competition and market information while increasing costs.
In 1965, as part of President Lyndon B. Johnson’s Great Society, Congress created Medicare, a program providing health insurance to those 65 and older. Fast forward to today and the Trustees of Medicare have predicted that the program is “expected to remain solvent until 2024.” And that’s a conservative estimate.
The health care industry was further altered in 1973 by the Health Maintenance Organization (HMO) Act, signed by President Richard Nixon.
These HMOs were insurance companies designed to control rising costs in the health care market by acting as a liaison between patients and doctors to determine appropriate care.
Of course, this further removed patient and consumer choice while also mandating coverage of routine health care needs like primary care.
By mandating that companies with more than 25 employees offer an HMO option for health insurance, the number of working Americans enrolled in managed care was more than 50 percent by 1997.
Add to these interventions the creation of Medicaid, Medicare Part D and insurance mandates passed by state legislatures (for instance, Florida has more than 40 minimum individual coverage mandates), the health care market in the U.S. is far from free of government intervention.
Of course, all of these distortions have consequences, mainly in terms of rising costs. Senior research fellow Veronique de Rugy of the Mercatus Center found that “since 1984 annual price changes in medical care has exceed[ed] the average inflation rate of all consumer prices in every year but one.”
In the end, Obamacare is simply a way for the government to try to fix the problems it caused in the first place.
