Designing Health Insurance

This priceless gem is from a New York Times editorial:

There is no easy solution short of increasing federal spending or finding a way to drive down the cost of drugs.

They're talking about the Medicare Part D drug benefit which has a "doughnut hole"- in which seniors are exposed for 100% of drug costs between $2,400 and $3,850.

Amazingly, more than 200 million nonelderly Americans – without government spending or any government price controls – have managed to find health insurance with no doughnut hole.

Comments (2)

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  1. Joe S. says:

    The doughnut hole exists because of the politics of medicine. Politicians do not want to create a catastrophic benefit that only “touches” a few people in any given year. Instead, they want a first-dollar benefit that touches almost everybody (read: all the voters).

    So to touch everybody and still provide catasthrophic protection with limited funds, they settled on a design that you never see in private insurance markets.

  2. Private Krankenversicherung says:

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