Another Quick Note on Health Care “Reform”

Posted by Jeff Pruitt - 12/30/09 @ 4:33 pm - Filed Under National Politics

I thought this was a good post from Yves over at Naked Capitalism about the current state of health care “reform”. Echos what I’ve been saying for some time albeit using a more coherent argument:

Some readers were critical of my opposition to the health care reform charade under way, the argument being that the insurance program was a Good Thing, it would provide insurance to people who were formerly uninsured, with subsidies to those at and not far above the poverty line.

The key assumption is that the insurance purchased will actually provide meaningful, affordable coverage. That is likely to prove to be a questionable assumption.

From an economic standpoint, anyone of reasonable means should not want insurance, save catastrophic coverage. You are better off paying for your routine coverage yourself, and paying for insurance (whether public or private) only to cover serious ailments that require hospitalization or other expensive treatment. So to extend that principle, for lower income people, the government could subsidize the catastrophic coverage and provide support for routine and preventive treatments.
[POST CUTS AWAY TO PBS INTERVIEW WITH ROBERT KUTTNER]
ROBERT KUTTNER: Think about it, the difference between social insurance and an individual mandate is this. Social insurance everybody pays for it through their taxes, so you don’t think of Social Security as a compulsory individual mandate. You think of it as a benefit, as a protection that your government provides. But an individual mandate is an order to you to go out and buy some product from some private profit-making company, that in the case of a lot of moderate income people, you can’t afford to buy. And the shell game here is that the affordable policies are either very high deductibles and co-pays, so you can afford the monthly premiums but then when you get sick, you have to pay a small fortune out of pocket before the coverage kicks in. Or if the coverage is decent, the premiums are unaffordable. And so here’s the government doing the bidding of the private industry coercing people to buy profit-making products that maybe they can’t afford and they call it health reform.

Yves again. This is the key element that defenders of this program simply do not appreciate. The “plan” does nothing to fix the underlying problem of our health care system, which is bad incentives that lead to much higher costs than in other countries. This “reform” if anything reinforces the troublesome elements of the current system (by now making it official policy rather than design via official neglect) and worsen the cost equation by further enriching drug companies and extending the role of private insurers.

Read the whole thing. This is what happens when you try and “work within the system” to change things. You don’t change much at all and what you do change ultimately ends up hurting more people than you help. The reason this happens is the system itself is corrupt. Too frustrated to elaborate on this right now - I’ll save that for another day…