The Three Big Expenses: Health Care

This article was originally published on GrasstopsUSA.com.

Previously, I discussed the ways in which government intervention in and aid to higher education dramatically raises the cost of college for most Americans. Health care constitutes the second area in which Americans pay tremendous amounts of money and an ever rising fraction of their incomes. Once again, government is responsible - and the consequences are even more disastrous.

While it is still possible for ambitious and talented college students to receive merit scholarships at some schools and thereby offset the costs of their education, health care costs are not always avoidable. One can, of course, reduce the likelihood of having to seek health care by taking diligent care of one's body. But even there, prophylactic medicine can help, and even the most conscientious among us can fall prey to bad luck or a rare disease. Thus, it is in everyone's interest to know why health care costs are so astronomically high and what institutional forces are responsible.

Health care was not always one of the biggest expenses. In fact, prior to World War II, the best health care of the day was quite affordable to the average American. It is true that the available medical technology was also at a much less advanced level, but in a functioning free market, technological improvements are typically accompanied by lower costs, not higher ones. So the dramatic rise in health care costs after World War II has been despite, not because of, phenomenal technological progress.