NCPA - National Center for Policy Analysis

The Cost of "Free" Medical Care

November 3, 2010

One of the most difficult economic concepts to grasp is that we live in a world of limited resources.  For better or for worse, scarcity forces us to choose from among our many wants, says Matt Kibbe, president of FreedomWorks.

The Obama administration promises to "give" the American people more.  But at what cost?  No matter how hard it tries, the administration cannot repeal the basic laws of economics.

President Obama promised that his health care law would give us more health care coverage and "bend the cost curve downward."  In some way or another, Obamacare was supposed to cover more people for less money.  Seven months after the passage of Obamacare, the laws of economics have struck back, says Kibbe.

  • Under the new Obamacare law, insurance companies are forced to provide "free" screenings and preventive care, but there's nothing free about Obamacare.
  • Ultimately, we all will pay the cost of these "free" services in the form of lower wages, higher taxes or higher health insurance premiums.
  • Some insurance companies have already increased their premiums by an average of 20 percent to help pay for the extra benefits required under Obamacare.
  • It has been reported that consumers may face total premium increases as much as 47 percent in the near future.

Under the new law, it is mandated that all employers who offer health insurance must spend at least 80 percent of their revenues on patient care.  "Mini-med" policies offered to 2.5 million low-wage workers do not meet this requirement.  Many businesses, including McDonald's, have spoken out against this costly provision.

Some small businesses that are harmed by these costly regulations will have to choose between ending health care coverage and going out of business.  Surely, even the most ardent supporters of Obamacare would agree that mini-med coverage is better than no coverage at all.  This is an example of a trade-off that the fact of scarcity requires.

No matter what politicians may promise, you cannot get something for nothing, says Kibbe.

Source: Matt Kibbe, "The Cost of 'Free' Medical Care," Washington Times, November 1, 2010.

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