PARKER: America needs to fix its broken health-care system

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The United States just went through the longest government shutdown in history over contention regarding the renewal of temporarily enacted government subsidies to Obamacare premiums. 

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This battle is not over. Eight Democrats threw in the towel and agreed to postpone the issue and cooperate with Republicans to get a continuing resolution passed to fund our government and get back to business. 

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But the subsidies still need to be dealt with, so rest assured that more rancour and division lie ahead. 

What troubles me is our refusal, or inability, as a nation, to deal with issues of policy in the most fundamental way, rather than piecemeal and according to interest group politics. 

Obamacare is but one slice of the American health-care pie, delivering health care to some 7% of Americans. 

The real issue is that there is something deeply and fundamentally wrong with health-care delivery in our nation. 

Per the Petersen-KFF Health Care Tracker, the U.S. is far and away the most expensive country among high-income countries regarding health-care costs. 

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In 2023, per capita health care expenditures in the U.S. were $13,432. 

The average among 12 similar high-income countries — such as Switzerland, Germany, the U.K., France, Japan, etc.— was $7,393. 

U.S. health-care expenditures as a percentage of gross domestic product (GDP) have increased from 6.9% in 1970 to 17.6% in 2023, an increase of 155%. 

According to economist Mark Perry, from January 2000 to December 2024, the overall price level in the U.S. — commonly referred to as inflation — increased by 87.3%.  

Over the same period, the cost of hospital services increased by 256%, and the cost of medical care services increased by 138.6%. 

All this while the cost of clothing increased just 1%, the cost of cellphone services declined 41.7% and the cost of computer software declined 74.2%. 

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Things that have increased less than inflation or declined operate in free markets. 

In 2023, almost half of health-care spending in the U.S. was by federal, state and local governments, per Petersen-KFF. 

We need to get away from endless battles over Obamacare, Medicaid, Medicare, etc., and start discussing how to get medical services into the marketplace, subject to competition and price transparency. 

Think about the last time a doctor suggested you take a test. Neither the doctor nor you has any idea what that test costs. Or consider a situation where you could shop around and look for the best deal. 

President Donald Trump floated the idea of Health Savings Accounts. This idea, in various forms, has been around for a while. But it has never received adequate, serious attention. 

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You, and possibly your employer, fund a tax-free account which you can use to pay for routine medical expenditures. Regarding coverage for major incidents, you pay for high-deductible insurance. 

A big problem with what we call health insurance is that it’s really not insurance. Insurance is not something that covers routine expenditures, which is what we do with health insurance. Insurance is something that should be used for extraordinary events. If health insurance were used properly, it would be much cheaper. 

Imagine what would happen to your car insurance costs if it covered oil changes and routine maintenance. 

There are also health-sharing plans. These are community, usually faith-based, plans in which members pay monthly dues and the overall fund is used toward health-care cost claims of the members. 

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Health-sharing plans are not insurance, although they share some characteristics of insurance in that there is a group dimension in which the pool is available to the periodic claims of members. And health-sharing plans are exempt from the restrictions of Obamacare. 

It’s time for unity in recognizing that America’s health-care system is sick and the disease is too much government. 

The cure needed is core values that have delivered great wealth to our nation over its 250-year history: free markets, competition and the initiative and creativity of free people.  

 
Star Parker is founder of the Center for Urban Renewal and Education  

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