Saturday, May 06, 2006

 

Health Care Problem

No one denies that there is a problem. No one, that is, except a few ideologues like Grover Norquist who think the problem can be solved if the government gets completely out of the situation and lets people buy their own health care, just as they did in the days of Calvin Coolidge. Let’s start by trying to achieve agreement on the true nature of the problem. Here are some thoughts, not all of them mine:


If left to itself, the health care problem is going to get worse. Effective action by government is needed to remedy the problem. However, proposals to help solve the problem have become politicized. Republicans have one set of proposals, Democrats another. Neither side likes the other’s ideas. There’s a stand-off. At present, the only plan that has a chance of enactment is one that is acceptable to members of both major parties.

Massachusetts provides an example of a plan that was acceptable to both Democrats and Republicans in State Government. The State has a Republican Governor and a legislature with majority Democrats. The plan includes the following elements:


At present the State is running a surplus. Because of competition, insurance premiums are not excessive. There is money at present to fund the system so that it can get off to a good start. The whole country is watching the Massachusetts experiment.

I wish the experiment well. However, as a “lefty” (according to one of my friends), I foresee some problems. By allowing people choice of which insurance company to patronize, the State allows the insurance companies to “cherry pick” and insure the most healthy individuals at low premiums. Individuals with preexisting health problems will have to pay more for essentially the same insurance. Since the State provides a subsidy to those who can’t afford insurance, the State will be in effect subsidizing the sick. I doubt that this is a politically sustainable position. Insurance companies should be required to insure everyone at the same premium, regardless of any existing condition. The whole idea of insurance is to enlarge the pool and the risk, so that everyone contributes to the pool that covers the health care for those who need it.

At least, that is the classical excuse for insurance. Nowadays, insurance companies are in business strictly to make as much profit as possible. You make profit by selling policies that you are not likely to have to pay out on, that is, policies to the healthiest individuals you can find.

My recommendation is that a plan like the Massachusetts plan be based on a single insurance entity, a non-profit entity established by the government, one that insures everyone. That is, I favor the “single-payer” approach to health insurance. This single insurer would not have to pay for advertising costs and would provide insurance at a lower cost than any private for-profit could.

Anyway, it’s a good first step. I hope it turns out well.
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