Thinking the Unthinkable
Given all the anecdotes from President Obama and the Congressional Democrats on the evils of health underwriting, how could anyone other than a callous, unfeeling, uncaring, anti-humanitarian curmudgeon defend the market for individual insurance?
Well, I did it. More precisely, Mark Pauly did it in his new book, Health Reform Without Side Effects, and I agreed with him in my post at the Health Affairs blog. Pauly shows that the market actually works pretty well — certainly better than health insurance exchanges ObamaCare would replace it with and better than the small group market that Obama would leave largely untouched.
Great article at Health Affairs. Much needed. Brilliantly reasoned.
Good post. And you are right. I can’t think of anyone esle who defends a real market for risk. Certainly not the insurance companies.
The article “Tragedy of the Commons,” published in the journal Science in 1968, is a great metaphor for health care. Our tax dollars, future tax dollars from our grandchildren, premiums and forgone cash wages all pay for various common pools of health care. I have little incentive to curtail my consumption of medical care from the common pool since I bear little of the cost directly, despite degradation to the health care commons.
Personal and portable health coverage – in the form of an HSA – helps to better align our incentives to be prudent consumers of medical care by assigning a form of property rights.
Health care resources are finite in the medical commons. There is nothing that ObamaCare can do by political fiat to alleviate that fact.
It’s a real statement about the culture when hardly anybody other than one or two academics believes there should be a real market for risk.
Excellent post. This should be xeroxed and sent to every one on the White House staff.
From the Health Affairs post:
I’d really like to know where the “1% to 4%” figure came from. Or at least what it means. It doesn’t sound plausible. Nor does the 4x range suggest a very precise estimate.
Are you saying that you believe 99% of the population would be accepted for mainstream underwritten coverage? Or that 96% could receive such coverage at something close to the lowest rates?
Guaranteed renewal is not much of an answer unless accompanied by the right to switch policies and insurance companies. Otherwise anyone who needs to use the renewability provision is stuck in a monopolistic relationship with his or her insurance company.