Crisis Communism

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No law has drawn more ire from libertarians and conservatives than Obamacare. The idea of the government using its power to punish people for making a free and informed decision not to purchase health insurance, justified by the noblest-sounding idealism of "lowering costs" and "increasing access," is obvious pavement for the road to socialism. If the government has the right to impose economic decisions on us, then capitalism is finished.

My own view is that, contrary to conventional libertarian wisdom, Obamacare gets some things right. I have a history of health problems and the end of exclusions for preexisting conditions benefits me greatly; without it I probably would not have health insurance. I also like the Obamacare health insurance exchanges, because they enable plans to compete for buyers, and competition is the engine that lowers cost and improves quality. In terms of preexisting conditions, and the lack of competition among plans, I think the old system was broken and the new system is better.

But my point is that these good things would have happened from deregulation. The flaws in the old system were caused by government control, not by the free market or the greed of insurance companies. In fact, greed is a main motive of Obamacare's insurance-company backers, who love a law that forces people to buy their products and pay them more money.

Here I posit a theory that I call Crisis Communism: when the government interferes in the free market it causes a crisis, which the socialists then use as an excuse for greater government interference, justified by the need to end the crisis. Thus regulation achieves a downward spiral towards Marxism. One good example is the Great Depression. The Federal Reserve caused it; then the New Deal was offered as a solution — which made it worse.

In the field of health insurance, two regulations precipitated the crisis "solved" by Obamacare. First, the complex of laws and codes known as ERISA (associated with the Employee Retirement Income Security Act of 1974) tended to force health insurance to come from a worker's employer, so that the employer chose the plan, which killed competition for plans among individual consumers. Second, the state insurance commissioners issued detailed regulations about what a health insurance plan was allowed to cover and what benefits it could have. The advocates of Obamacare might blame the free market for a bad system, when really it was state socialism that was to blame.

I want Obamacare repealed. But if we are to repeal Obamacare, then we must also repeal ERISA and all state health insurance regulations, so that free market competition can force health insurers to make plans available at prices that people want to pay for the benefits they want and freely choose to purchase.

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