FFF.org | The United States once had the finest health-care system in the world, one based on the principles of economic liberty and the free market. That changed in a big way in 1965, when liberal statist Lyndon Baines Johnson secured passage of Medicare and Medicaid, socialistic programs that provided “free” medical care for the poor and elderly.

What Medicare and Medicaid did, decade after decade, was to place an inordinate demand on health care, producing a concomitant rise in prices all across the board. When government makes things “free,” people tend to over-consume, which causes prices to go up.

Meanwhile, as the demand for health care continued to rise, the supply of health care remained constricted, thanks to medical-licensure laws, which protect people in the health-care industry from an oversupply of health-care competitors.

So, here was a prescription for disaster: Soaring demand brought about by “free” government-provided health care and restrictive supply brought about by medical-licensure laws.

As the decades went by, the price of health care began soaring, producing all sorts of distortions in health care to which suppliers, consumers, and insurers were constantly trying to adjust.

Aggravating the situation were such things as state regulations that attempted to protect intra-state insurance companies from interstate competition as well as income-tax manipulation that encouraged employers to purchase health-care insurance for their employees.

Slowly but surely, Americans became dependent on the welfarism and regulation. This included doctors and other health-care providers. It got to the point that many patients and many physicians just could not imagine life without the dole, without their beloved Medicare and Medicaid payments from the government.

Thus, as the health crisis continued to mount, most everyone’s position became the following: “Medicare and Medicaid, medical licensure, income-tax manipulation, and insurance regulation must be left intact. Now, what is your solution to the health-care crisis?”

In other words, the entire health-care debate was oriented toward coming up with a plan that reformed and saved the health-care socialism and interventionism that was at the root cause of the problem.

That’s inane.

Notice that many of the statist commentators are already saying that the Obama health-care plan is just a “first step.” Much more needs to be done, they say. The reason they’re saying that is because they know that Obama’s plan won’t fix anything. Instead, this latest intervention will simply produce a bigger crisis down the road, at which point the statists will call for the inevitable: a total government takeover of health care, just like in Cuba. Read Entire Article

By Jacob G. Hornberger