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Peter Schiff: Wrong on the Economy, Wrong on Healthcare (Part 3)
From what I can tell, the ONLY thing Mr. Schiff understands about healthcare is the poor design of private medical insurance. The current system does not provide real insurance. It’s nothing more than a system of pre-paid medical, operating with the rules of insurance. And this has created a huge source of fraud by private insurers. Assuming we keep the basic structure of private insurance in place, it should be modified to provide assistance under some catastrophic, emergency situation rather than routine care.
However, what Schiff fails to recognize is that by placing everyone on a high-deductible medical plan, most people would actually end up underinsuring themselves. This has already happened. According to a study by Harvard researchers, 68% of all medical bankruptcies (50% of all bankruptcies) occur with people who have medical insurance. A system of universal coverage would serve to fill in the gaps catastrophic insurance leaves out.
For many years now, Washington’s response to America’s runaway healthcare costs has been the addition of new tax deductions. But we cannot forget that tax deductions do absolutely nothing for those who have lost their jobs. You need income in order to utilize tax deductions.
More so than anything else, tax deductions provide yet another tax shelter for the wealthy, while encouraging further cost increases from the healthcare industry, knowing you have no choice but to pay whatever prices insurers stick you with.
More important, Schiff fails to understand that people must be provided with basic care instead of waiting for a small problem to progress into a deadly and costly illness. It’s called preventative medicine; an important component missing from America’s healthcare system because the insurance industry doesn’t want to pay for it.
I find it mysterious how someone who claims to be an expert in economics is unable to appreciate the fact that taxation of healthcare benefits would create a permanent drag on consumer spending. There is a solution, but Schiff has no idea what it is. As far off from the solution as Obama is, Schiff is light years away.
The solution is some combination of universal healthcare, radical policy change, and technology. A system of universal coverage would save hundreds of billions of dollars annually after streamlining the bureaucracy and slashing the huge administrative costs from the private insurers.