Conservatives see free market at work in dropping healthcare costs

{mosads}By contrast, Democrats throughout the healthcare reform debate pointed to the nation’s world record healthcare costs — the United States spends about 18 percent of GDP on healthcare, almost twice the average of industrialized countries — to make the case for more government intervention.

“It is no exaggeration to say that the United States’ standing in the world depends on its success in constraining this health-care cost explosion,” former White House Budget Director Peter Orszag wrote in Foreign Affairs last year. “Unless it does, the country will eventually face a severe fiscal crisis or a crippling inability to invest in other areas.”

Those high costs sparked provisions in the law that require greater collaboration and transparency from providers. Conservative critics, however, say the law’s requirement that Americans buy comprehensive insurance with no co-pays for a broad array of preventive healthcare services — including the latest spat over birth control — will have the opposite effect.

“If we really want to tame the health-care cost beast and make insurance ‘affordable,’ we would double down on all of the positive developments,” Kleinke writes. “We would liberate people with their own money from layer upon layer of arcane, localized insurance rules. We would fix the tax code to uncouple health insurance from employment and let people purchase their own mix of services and coverage. And we would let them do so in a competitive, national market just like with auto insurance — instead of holding them hostage in fragmented, local markets while shaking down their employers to subsidize a system that wants desperately to change itself.”

The latest data from the Medicare actuary, however, found that the healthcare law’s coverage mandates contributed only 0.1 percentage points of the 3.9 percent increase in healthcare costs in 2010.