Government Subsidiaries Essay

The United States health care system currently has the third highest expenditures per capita. In a study done by the World Health Organization which included 191 nations, America’s health care system ranked as the most expensive system in the world, but ranked 37th in overall performance, and 72nd by overall level of health. Democratic party challenger Jack Conway, who is running for Kentucky’s state senate seat, proposes a plan which he claims will save 430 billion dollars over the next ten years, without raising taxes.

Out of the 430 billion dollars, he plans on saving 300 billion dollars of this plan from reducing costs in the American Health Care System. Part of the plan to reducing 300 billion dollars of unnecessary expenses from healthcare system, Jack Conway says he could save 200 billion dollars by just by attacking a provision that which lobbied by the pharmaceutical industry in 2004 as part of the Medicare Part D prescription drug benefit. This provision prevents Medicare from negotiating for lower prices on prescription drugs.

He plans on giving Medicare full control. Medicare will have the ability to negotiate for bulk rates discounts for prescription drugs. This provision in the Medicare Part D prescription drug benefit currently protects up to 24 billion dollars of profits for the pharmaceutical companies each year. The Republican party candidate Rand Paul has different views than Democratic party candidate Jack Conway on how America should go about health care reform. He is in favor of using free market principles for health care. Rand Paul is against government control and HMOs.

He supports free market principles for the health care system because of over-regulation by the government. He feels that because the fact that when HMOs were created, in 1973, was to benefit only certain types of companies at the time. Due to the unfair advantages it gave to certain companies it has led to a distortion of the healthcare industry’s market which caused higher prices, less coverage, and more bureaucracy.

According to Rand Paul, the HMO Act arose from large corporations unfairly seeking the use of government power to solidify their profits, this is a form of power he feels like the government should not ave. In order for the free market system to work, many segments of our government must collectively back off on federal regulations and procedures for all medical care systems. The current regulations in place do not favor small businesses from providing coverage. In a free market system, there must be individual rights, limited government, and private ownership. When individuals are given equal rights as large corporations and an equal playing field, the unregulated competition will maximize economic benefit for society by providing the most goods and services possible at the lowest cost.

By allowing the different factors of play in a free market economy, we will see lower prices in health care coverage and health care products. Rand Paul also wants to allow doctors the freedom to collectively negotiate with insurance companies which could potentially drive down the costs of medical care. Along with that policy, another policy he is pushing is making Health Savings Accounts available for everyone, not just the individuals who have a high-deductible on their insurance policy.

The current status one must have before opening a Health Savings Account is obtaining a high-deductible on their insurance policy first. In this theoretical government regulation-free free market, there must be subsidiarity. Larger organizations and governments must gain their authority from the consent of smaller organizations, governments and individuals such as doctors themselves. No authority should be granted to a larger organization that can be governed by a smaller one.