My article as originally published in American Thinker:
My family and I recently returned from a much-needed vacation in Cabo San Lucas, Mexico. We had a blast, but unfortunately, I was unable to completely escape being reminded of the disaster known as ObamaCare, despite being many hundreds of miles south of the U.S. border.
Feeding a family of four while on vacation can be a costly endeavor. My wife and I usually enroll in an all-inclusive meal plan because once the fixed price is paid, we can mostly order what we like without having to worry about keeping track of every minute expenditure. It may not be very cost effective, but it does help expedite the process of relaxation and ensure there are no multi-thousand-peso surprises at the end of the trip. But since it was the first time we had brought our kids to Cabo, we wanted them to experience a few of the off-resort restaurants that the city had to offer. Therefore, it made no economic sense for four people to be on a meal plan during the days when the most expensive meal of the day would be enjoyed elsewhere.
We settled for four days on the all-inclusive plan and three days off of it. The price for adults was $105 USD and for children it was $55 USD. But the cut-off age for kids was thirteen which meant our son was priced as a child and our daughter (who doesn’t eat very much) as an adult. We did inquire as to why teens cost as much as adults, after all, our daughter wouldn’t be consuming any adult beverages. We were told that experience had shown that teenagers in possession of all-inclusive bracelets tended to order a meal, take just a few bites, and then order something entirely different, i.e., they waste resources. Cabo economic lesson #1.
Our children clearly thought they were royalty for the first four days while the all-inclusive plan was in effect. We normally teach our children to be cost-conscience (as I write this, my son informed me that he needed to lick the maple syrup off his plate because it’s expensive and shouldn’t be wasted), so at first they were a little reluctant to splurge, but we reassured them that everything was already paid for and that they could order as much of anything as they wished within the limits of the plan. Human nature took over from there and we did our best to extract every penny of value we could from the plan. I’m fairly confident the resort actually lost money on our deceptively-thin eleven-year-old son.
To the great disappointment of our children, the meal plan eventually expired and we were forced to revert back to reality and once again be cost-conscience. It was at that point that I began thinking about ObamaCare and health insurance in general. I realized that the days we spent on the meal plan were somewhat like being enrolled in the typical third-party payer health plan before ObamaCare had taken effect. After a set price was paid, there was really no thought given to what was consumed. This is why while on the plan, we were determined to get all we could out of it and gave little thought toward overconsumption or waste. After all, we’d paid good money for the privilege of doing just that. Be it food, healthcare or anything else, there’s no real incentive to conserve resources under this type of arrangement. The predictable behavior that ensues is in part why the cost of health insurance and all-inclusive plans both continue to rise.
Our attitudes changed quite dramatically once we entered the pay-as-you-go phase of our trip. We were suddenly much more cautious about our spending habits. Those enormous plates of carne asada nachos could now be shared by two of us; multiple appetizers were no longer ordered with each dinner and extra bottled waters were no longer requested with each drink order. My wife and I had planned ahead for this phase of the trip and set aside a chunk of cash that we had hoped to make last for the remainder of the trip. It was almost like having a health savings account (HSA). And it worked pretty darn well. The cost of the typical extended day by the pool including drinks, snacks and lunch was averaging about $130 USD while on the meal plan but had dropped to about $60 USD once we were off of it. Full disclosure: the off-plan cost would have been slightly higher had we not hoarded “free” bottled waters while the meal plan was still in effect.
So how did ObamaCare fit into our all-inclusive Cabo experience? Fortunately, it didn’t, which is why there’s a very good chance we’ll be going back. While it’s true that third-party payer health insurance may not be the most efficient method of providing healthcare, any improvements are best left to the free market.
No, an ObamaCare-like experience would have required the Federales to show up at the resort and enforce a mandate that everyone purchase a government approved all-inclusive meal plan. Further, since not everyone around the pool could afford the expensive meal plan, the government would ensure that those who couldn’t pay for it would be subsidized by those who were already willing to pay for the plan, and by those who could afford it but choose not to enroll for various reasons of their own choosing.
After accounting for all of the mandates, subsidies (including for those who would purposefully earn less in order to qualify), failed website design and salaries consumed by bureaucrats, the bottom line would be that those vacationers who were once happy with going either all-inclusive or pay-as-you-go would find that they were now forced to buy an all-inclusive plan and then, in addition, pay sky-high “deductibles” before they could ever use it. So by the time any benefits actually kicked in, vacation would long be over with. Meanwhile, those being subsidized would have even less of an incentive to conserve resources than a fickle teenager in possession of an all-inclusive bracelet.
Back in the U.S., we’re stuck with ObamaCare because the president spends much, much more time vacationing than he does studying even the most rudimentary laws of economics.