- The Washington Times - Monday, November 1, 2010

Would you like a private plane, nicer car or more time to spend with your family? Most would. Although our desires are virtually unlimited, the unfortunate truth is that there is never enough of anything to fully satisfy all those who want it. One of the most difficult economic concepts to grasp is that we live in a world of limited resources. For better or for worse, scarcity forces us to choose from among our many wants.

As the popular economic saying goes, there’s no such thing as a free lunch. Every choice we make in life has a cost. When we choose more of something, scarcity forces us to have less of something else. If you did not choose to read this column, you might have spent your time sleeping, studying physics or volunteering in your community.

The Obama administration promises to “give” the American people more. But at what cost? No matter how hard it tries, the administration cannot repeal the basic laws of economics. Politicians are not Santa Claus. The truth of the matter is that we never get something for nothing. Politicians cannot give us anything without first forcibly taking something away.

President Obama promised that his health care law would give us more health care coverage. He claimed his health care overhaul would “bend the cost curve downward.” In some way or another, Obamacare was supposed to cover more people for less money. As the adage goes, if it seems too good to be true, it probably is. Seven months after the passage of Obamacare, the laws of economics have struck back.


Under the new Obamacare law, insurance companies are forced to provide “free” screenings and preventive care. But there’s nothing free about Obamacare. Government cannot simply give away free goodies with zero consequences. As P.J. O’Rourke said, “If you think health care is expensive now, wait until you see what it costs when it’s free.”

For every extra benefit Congress has required health insurers to provide, there is an extra cost. Ultimately, we all will pay the cost of these “free” services in the form of lower wages, higher taxes or higher health insurance premiums. Some popular insurance companies already have increased their premiums by an average of 20 percent to help pay for the extra benefits required under Obamacare. It has been reported that consumers may face total premium increases as much as 47 percent in the near future.

Under the new law, it is mandated that all employers who offer health insurance must spend at least 80 percent of their revenues on patient care. “Mini-med” policies offered to 2.5 million low-wage workers do not meet this requirement. Many businesses, including McDonald’s, have spoken out against this costly provision.

In the end, Health and Human Services’ (HHS) Secretary Kathleen Sebelius granted McDonald’s an exemption from the new regulation, claiming that she used her best discretion. It is troubling that the rule of law has now become the rule of the czar. As we’ve seen so far, these waivers have been handed out on a case-by-case basis to politically connected corporations and large unions.

Some small businesses that are harmed by these costly regulations will have to choose between ending health care coverage and going out of business. Surely, even the most ardent supporters of Obamacare would agree that mini-med coverage is better than no coverage at all. This is an example of a trade-off that the fact of scarcity requires.

No matter what politicians may promise, you cannot get something for nothing. Even if something appears free, there is always a cost that may be hidden. Just like anything else, medical care is a scarce good. In reality, no piece of legislation can make medical care any less scarce by force. As predicted, the cost of forcing companies to provide “free” services bent the cost curve upward. It may be impossible for politicians to repeal the law of scarcity. But they should repeal Obamacare immediately to prevent any further damage.

Matt Kibbe is president of FreedomWorks and the author of “Give Us Liberty: A Tea Party Manifesto” (William Morrow, 2010).