The Tragedy of Health Insurance

How the insurance industry has haplessly abetted the rise of a government-run health care system

Tragedy “resides in the solemnity of the remorseless working of things,” declared philosopher Alfred North Whitehead in Science and the Modern World (1925). And few things are more tragic in the policy world than the current spectacle of private health insurers destroying their industry, and along with it, hope for a future of dynamic and innovative medical care. In just a few short days, shortsighted actions by the health insurance industry and its lobbyists have resurrected congressional proposals for a government-run health insurance scheme, the so-called public option.

On Saturday, a front page article in the New York Times reported that small businesses are seeing their health insurance premiums go up an average of about 15 percent for the coming year—double the rate of previous year’s increases. Apparently, insurers are trying to revive their stock prices and top up their coffers before health care reform legislation passes later this fall. Opponents of private health insurance quickly seized on these reported price increases. “This underlines the urgent need for health insurance reform, including a public option,” said Speaker of the House Nancy Pelosi (D-Calif.).

Congressional Democrats provided the health insurers with another opportunity for public self-immolation by proposing to repeal the health insurance industry’s antitrust exemption under the McCarran-Ferguson Act. That Act also allows states to regulate the business of insurance without federal government interference. Congress passed the McCarran-Ferguson Act in 1945 in response to a Supreme Court ruling that insurance could be regulated by the federal government as interstate commerce under the Commerce Clause of the U.S. Constitution.

By conferring a regulatory monopoly on each state, the McCarran-Ferguson Act ends up protecting insurance companies from interstate competition—residents may not buy policies from insurers located outside their state. Because health insurers are insulated against out-of-state competition, state insurance commissions and legislatures feel free to impose coverage mandates that significantly drive up policy premiums.

The proliferation of hundreds of state health insurance mandates and regulations also serves as effective barriers to entry for potential competitors. An insurance company trying to enter a new market would have to meet all of a state’s mandates. At the same time, the company would have less negotiating clout with doctors and hospitals, which means it would have to pay providers more for their services. In addition, a new entrant trying to attract policyholders would have to charge lower premiums than the incumbent companies to gain a foothold. So a would-be competitor must pay more to health care providers while earning less from policyholders.

Given these mandated barriers, insurance companies have found that the easiest way to enter to a new state is to buy another company that is already operating in the market. It is this dynamic that is driving the trend toward consolidation in health insurance markets.

The American Medical Association (AMA) sponsored an analysis in 2007 that looked at the concentration of health insurance companies [PDF] in 313 metropolitan areas. To gauge the level of competition among insurers in the health insurance industry in each area, the AMA study used a Justice Department antitrust benchmark, the Herfindahl-Hirschman Index. A score above 1,000 shows "moderate" concentration. Those scoring above 1,800 yield a "high" concentration, suggesting that there is very little competition in the area. The analysis showed that 96 percent of the 313 HMO/PPO (health maintenance organizations/preferred provider organizations) metropolitan markets studied were above the 1,800 threshold.

The AMA is not exactly a disinterested party when it comes to health insurers, however. The medical credentialing board has a complicated relationship and a long history of conflict with health insurers. But others have found that fewer health insurance competitors in a market mean higher policy prices as well. A 2008 study by Kellogg School of Management professor Leemore Dafny found that local markets with fewer than six insurance carriers charged higher group health premiums. Dafny’s study also found that “markets with 6 or fewer carriers increased dramatically over time, from 7 percent in 1998 to 23 percent in 2005.” She added, “Concentration has only increased since.” 

In 38 states, the largest insurance company controlled one-third or more of the market and in 16 states the largest firm controlled more than half the market, according to a 2004 study by University of California-Berkeley health care economist James Robinson. Robinson also noted that during this period of increasing consolidation from 2000 through 2003 saw double digit growth in insurance company premiums, earnings, and equity share prices. Insurance premium prices annually grew 1.5 to 2 percent faster than their costs.

Last week, the House Judiciary Committee voted to narrow the McCarran-Ferguson antitrust exemption. However, many analysts think that action will have, at most, a minor effect on improving competition among insurers. In fact, National Underwriters newsletter reported that the Moody’s rating service does “not believe it would fundamentally change the way health insurers operate or lessen the barriers to entry and change the competitive landscape.”

Changing the competitive landscape, University of Illinois law professor David Hyman argues, requires amending the McCarran-Ferguson Act to allow for jurisdictional competition in health insurance regulation. Insurance companies would pick the state under which they want their policies to be regulated and then would be allowed to sell their policies in all other states. “The goal is to identify the ‘Delaware’ of health insurance regulation,” Hyman says. That is, to allow the market to find the state whose health insurance regulations are the most reasonable balance between protecting the interests of both shareholders and policyholders. This proposal would create a national market in health insurance coverage and help keep premiums low. Neither Congress nor the health insurance lobby favors such proposals. 

Which brings us back to the remorseless working of things. If the Democratic proposal to change the McCarran-Ferguson Act is just an empty populist gesture and would not really increase competition among health insurers nor reduce their profits, wouldn’t this be a good time for health insurance lobbyists to maintain decorous silence? That didn’t happen. The chief health insurance lobbying group, America’s Health Insurance Plans, opposes even this half-hearted repeal of the antitrust exemption. By kicking up a fuss, they have handed the Democratic leadership another occasion to demonize hapless health insurers for being anti-competitive and giving proponents of government run health insurance additional rhetorical ammunition for justifying the creation of a public option.

The truth is that companies don’t want competition; they want government guaranteed profits. Mesmerized by the prospect that an individual insurance mandate would provide them with tens of millions of new government-subsidized customers, private health insurers have allowed themselves to be maneuvered into an inexorable process that will lead to their destruction. In 2004, Berkeley economist Robinson warned that double digit growth in premiums and profits was unsustainable. “In the long term, health insurance will be either revitalized by the private sector, through product innovation and competitive entry,” wrote Robinson, “or disciplined by the public sector, through purchasing power and regulatory requirements.”

Five years later, health insurers are about to experience public sector discipline with a vengeance. Make no mistake about it: The government-run public insurance option will eventually out-compete private health insurers by means of the simple expedient of Medicare-style price controls on physicians and hospitals. Under the guise of advocating choice and competition, the Obama administration and congressional Democrats are, in reality, pushing the country inevitably toward a single payer government health insurance scheme. The result will be rationed patient care and drastically slowed medical innovation. Now that’s remorselessly tragic.

Ronald Bailey is Reason magazine's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.

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  • ||

    Still waiting on the free market solution. Where is it? The market is free to solve this. Get to it.

  • mark||

    Nice. Blame market impediments on the market itself.

  • ||

    Clearly you didn't read the article. The market *isn't* free to solve this. And that's precisely the problem.

  • Chad||

    No, Rod. Anyone who understands economics at all would know that health insurance, by its very nature, is riddled with market failures. Specifically, there are serious issues with moral hazards and asymmetric information that have absolutely NOTHING to do with who pays the insurance.

    I am sorry that your little theory is based on assumptions...assumptions that are often not true in the real world. But the facts are the facts.

  • Michael Ejercito||

    Would this not also be true of fire, auto, life, disability, and casualty insurance?

  • Chad||

    Not really. The moral hazards with respect to life and disability, as well as the major incidents with respect to home and auto, are fairly small. People might take a few more risks when insured, but they still won't take many serious risks either way. Therefore, any losses due to the minor moral hazard issues are dwarfed by the gain of being insured.

    Likewise, the asymmetric information problems are much smaller. Indeed, if anything, the insurance companies know more than their customers. How many people have any idea what the odds of their house burning down or being flooded is?

    In contrast, there are major moral hazard issues with respect to health care, much of which is some level of "optional". And the consumer has a massive information advantage over the insurer, due to their knowledge of their own health.

  • Paul||

    And the consumer has a massive information advantage over the insurer, due to their knowledge of their own health.

    What?!! My car insurance company *hopes* I'm a good driver. But they don't really know how good a driver I am. Only I do.

    But I don't know I have cancer yet.

  • Chad||

    People have no idea whether they are a good driver, either. Studies consistently show that >90% of drivers think they are better than the average.

  • ||

    Anyone who understands economics at all would know that health insurance, by its very nature, is riddled with market failures.

    Health insurance is riddled with market difficulties. They aren't market failures until you can demonstrate that the efficiency of the outcome of the market is negative or that a market doesn't exist that would provide a positive efficiency outcome. I don't think you can.

    The difficulty of asymmetric information is mitigated quite well by pricing up preexisting conditions and by having waiting periods before new conditions are covered. The difficulty of moral hazard is mitigated quite well by adding deductibles.

    Insurance companies are not incompetent at what they do for a living. They know how to price risks. If you want, say, lower deductibles, you will pay a premium on the premium.

    There is no market failure.

  • Isaac Bartram||

    Well of course there's a market failure.

    The definition of "market failure" being "something that Chad does not like".

    Simple really.

  • ||

    The facts are what you ignore. The reality is, and the data is readily available, that health care prices have become increasingly decoupled from overall inflation as the health care markets have become less free.

    Markets become more problematic as they suffer more intervention. Mortgage. Health Care. Education.

    Anyone who understands economics at all would know that health insurance, by its very nature, is riddled with market failures.

    Then as someone who pretends to this understanding perhaps you could explain these failures.

  • Paul||

    Don't hate, dregulate.

  • Isaac Bartram||

    Free market solution to health care.

    Step 1) You got to a doctor,

    Step 2) doctor treats you,

    Step 3) you pay doctor.

    Oh wait you're looking for a solution that eliminates step 3, aren't you?

  • ||

    Hehe nice one. I needed the chuckle.

  • ||

    First steps toward the free market solution:

    1. Allow purchase of insurance across state -- and national, for that matter -- borders.

    2. Give all health expenditures the same tax treatment. If that equal treatment is pre-tax -- as employer-based insurance is today -- require employers to give health care benefits to employees as a voucher that the employees can take elsewhere with the balance going into an HSA.

    3. Phase out Medicare. Make the richest age cohort in the country buy their own damn health care. Give vouchers to those who can't afford it based on poverty or preexisting condition.

    4. Make medical licensing advisory only. Open the borders to immigrant doctors.

    5. Make FDA drug approval advisory only. Allow sales of all drugs over the counter except those with actual public health consequences, such as last-line antibiotics.

  • Michael Ejercito||

    Allow purchase of insurance across state -- and national, for that matter -- borders.


    Will that work?

    How has allowing the purchase of automobiles, tropical fruits, and video games across state borders worked out?

  • ||

    "3. Phase out Medicare. Make the richest age cohort in the country buy their own damn health care. Give vouchers to those who can't afford it based on poverty or preexisting condition. "

    So, in other words, turn Medicare into Medicaid. Will that really do any good?

  • ||

    Yes it will.

    Medicaid is welfare. Medicare is welfare that pretends not to be welfare and, in the process, transfers money from 18-year-olds to millionaires.

    As welfare, Medicaid applies to fewer, poorer, and less politically powerful people so it is less in the thrall of election politics, it is fairer because it goes only to those who need it, and it can be an honest second-tier safety net that actually costs less.

    The bottom line is that 75% or better of the population can afford health care and health insurance in a free market. Those who need welfare should get welfare in ways that have minimum impact to that market. Medicare has proven to have massive impact on the health care market -- an impact that can only get worse. It needs to be eliminated.

  • Isaac Bartram||

    And having ended medicare as welfare for rich geezers we could then complete the job and make Social Security into a means tested income supplement for the elderly or infirm paid for out of general revenues thereby ending the payroll tax which is a revenue raising scheme masquerading as a social insurance premium.

    Oh, to dream.

  • Alice Bowie||

    I agree with most things MikeP.

    Except that if you get rid of medicare, who will insure seniors.

    The reason that Medicare exists is to give insurance companies a free pass of not having to insure old/disabled people.

    BTW...you'll be happy 2 hear that I purchase a High deductible plan. Now, instead of paying $615 per month thru my employer...I'm paying $135.

  • Chad||

    Until you get sick...

  • Alice Bowie||

    When I get sick and Insurance Drops me...I'll declare Bankruptcy.

    They drop you anyway whether you pay $615 per month or $135 per month.

  • Alice Bowie||

    And...when I declare bankruptcy...the doctors/hospital owners that get stiffed on the bill can go back and sue the insurance company that dropped me.

  • Anon||

    How is planning to go bankrupt a "free market" solution? You're going to avoid your debt by increasing the burden on taxpayers? (Which are the ones that end up paying to keep the hospital that YOU just stiffed open, by the way.)

    Also, you may want to check this out: http://en.wikipedia.org/wiki/B.....ection_Act

  • ||

    When he gets sick he'll go to a doctor and pay the doctor.

  • Alice Bowie||

    The vouchers will still be paid by the tax payer. Most senior citizens and disabled people on medicare are not rich cohorts.

  • Andrew||

    Which state can I buy affordable health insurance? I want to know badly. I will go across the stateline to purchase it. Do I have to go cross the stateline to see a doctor? I still like to see a doctor in my state if the plan allows it.

  • ||

    Going to ehealthinsurance.com and trying a 35-year-old male in California, I find a nice $3500 deductible 0% coinsurance plan from Anthem for $108 per month. There are 113 other choices that get you down toward $73 per month but cost you some coinsurance.

    Trying the same person in Albany, New York, a grand total of 3 plans show up. The cheapest of them that isn't hospitalization only is $425 per month.

    Now if you got the $108 per month California policy for a year and were unlucky enough to spend the whole deductible, it would cost you $4796 for the year. The New York policy, on the other hand, would cost you $5100 for the year even if you never saw a doctor.

    I don't know what "affordable" means to you or what state insurance regulations you are trapped under now, but you get the idea. And since the reasons insurance options vary so wildly are almost entirely state insurance commissions and the legislatures that feed them, the answer to your facetious questions about where you can get care is anywhere in the US.

    By the way, these are the first two states I tried. You are free to look for cheaper ones.

  • Andrew||

    MikeP, You got the fact wrong. California is not known for low healthcares cost. So the healthcare cost difference between California and New York could not be that big. As the insurers do not provide healthcare, and they merely spread the cost over a pool. The healthcare cost is driven by the delivery system, namely doctors and hospitals. Your example illustrates how difficult for an average consumer to compare shop health insurance. There are so many features that are designed to confues the consumers.

  • ||

    Huh?

    What "fact" did I get wrong? I went to an insurance reseller. That reseller gave me plans under $100 per month in California and no plans under $400 per month in New York. There's not many facts to get wrong there.

    The difference, if you had cared to repeat the experiment, is that the New York plans offered were $0 deductible only. Presumably New York is one of the many jurisdictions where high deductible insurance has been effectively outlawed.

    If you don't think that has an effect on the affordability of insurance, you are even less informed on this topic than you appear to be.

    Incidentally, California has many, many insurance suppliers including large respected nonprofits such as Kaiser Permanente. It is also, of course, the largest health insurance market in the country. It may not be known for low health care costs -- though I don't know where you get that impression -- but it certainly has opportunities for low health insurance costs.

  • Juan||

    Somewhere, probably someplace like Jekyll Island there is a group of elite robber barons conspiring to FED-eralize this lucrative insurance capital.

    All this outcry against the "public option" is orchestrated to land the public money into a few elite private accounts.

    The Socialists don't give a damn about healthcare, in fact their program works best if the population is sick and depressed. (and reduced significantly) They thrive on pandemics and disasters. Then they can sell a pill and/or shot (or an abortion) and the "public" option will pay them for it at an inflated.

  • :)||

    "they can sell a pill and/or shot ... at an inflated price"

    If this is the case, then why do other countries with socialist medical systems have significantly cheaper pharmaceuticals than the United States?

    As a side note, you may be confusing socialists with captain planet villains and/or the government of one or more fictional dystopias.

  • Juan||

    *inflated price.

    Not to mention they will get paid their "premiums" in advance... and whether or not they are actually paid out for service.

  • ||

    I think Mr. Bailey's article is an interesting spin on the topic, and one that we don't see on this website, either not enough or never. It highlights the rift between the left-leaning vs. right-leaning libertarians. While it reminds us our tent is large with many different opinions and facets, it also points out that it may be too big to unify and represent a viable third party.

  • ||

    "the Obama administration and congressional Democrats are, in reality, pushing the country inevitably toward a single payer government health insurance scheme."

    I'd like to know how they propose to pay for it. I mean I know that is their goal, but it's totally impossible. The money isn't there and never is going to be there. I guess it's easy to come up with all these programs if you can keep printing up imaginary money. But reality will come crashing down on this nonsense.

    And of course the insurance companies deserve this--as does every industry and group that has petitioned government to create monopolies and cartels. You can't feed the beast and expect that it's not going to grow up and eat you someday.

  • MikeS||

    MikeP is on to it. I'm down with each of his suggestions.

    Items 4 and 5 make especially good sense, yet receive almost no attention or analysis in the braindead "mainstream" media.

    And I say this as a physician myself. The public views healthcare as an entitlement they can extract by compulsion from the sweat of others' brows? Fine, motherfuckers. See anyone you want to see, pay out of your pocket, and godspeed.

    In practice, abolishing the trade-restraining, member-protecting state-licensing guilds will mean only that hospital medical staff credentialing and specialty-board certification--processes already well in place and established--will move to the fore in verifying that practitioners have some demonstrated level of training and expertise. Given a choice, I'd bet a surprising percentage of physicians would give up their state-sanctioned monopoly in return for significant malpractice reform---which I'd add to MikeP's list as the sine qua non of any healthcare "reform."

    A healthcare facility could then decide what practitioner mix they want, given the patient market segment they wish to serve. Patients can decide whom they want to see and accept the consequences of that choice. Only problem: patients will have to get off their coddled, lazy asses while they're still healthy, and do some due diligence before seeking care.

    Absolutely, anyone should be able to buy any drug s/he wants OTC. If you're stupid enough to swallow a pill you read about on the internet, then maybe the extirpation of your genes from the pool is to be desired.

  • ||

    As a fellow physician, I'd say that maybe we shouldn't get rid of state licensing boards. If a doc is too stupid or broke to maintain something as simple as state licensure, then maybe the extirpation of said doc from the pool of practicing physicians is to be desired.

  • Neu Mejican||

    QFT

  • ||

    The consumer can decide perfectly fine if he cares about credentials (heart surgery) or if he doesn't (sore throat).

  • Michael Ejercito||

    A commenter at the Huffington Post pointed this out.

    Why do we need health insurance to pay for health care, but not auto insurance to pay for auto care, homeowner's insurance to pay for home care, or hunger insurance to pay for food?

  • Chad||

    Odd. The government provides food insurance for anyone who might need it, and mandates auto and homeowner's insurance. What was your point again?

    In any case, health insurance is different than other forms of insurance, due to the pre-existing condition problem. Other forms of insurance are insurance versus one-off events, while health insurance is insurance vs both one-off events and chronic situations. It is the latter than creates problems that markets cannot solve.

  • ||

    No, Chad, it is you who are wrong. The government mandates "catastrophic" auto and home insurance.

    It doesn't mandate insurance to cover your inspection or change the oil in your car or fix the blown-out lightbulb or recarpet your living room.

    That's exactly what it wants to do in health care. In fact, it would eliminate the catostrophic-only care some of us prefer in our health care, doubling or tripling our costs while essentially covering yearly physicals. Yearly physicals that are essentially as expensive as your yearly car inspection.

  • ||

    In any case, health insurance is different than other forms of insurance, due to the pre-existing condition problem. Other forms of insurance are insurance versus one-off events, while health insurance is insurance vs both one-off events and chronic situations. It is the latter than creates problems that markets cannot solve.

    Yeah, sure, try getting your car repair paid for if you get into an accident before you purchase auto insurance. The same goes for those extended warranties offered by companies such as USFidelis- try getting them to pay your mechanic's bill for problems your car had before you bought the extended warranty.

  • Lee Cruz||

    How about we repeal all federal regulation and funding of Health Insurance? How's that for a Freemarket solution?

  • ||

    "Odd. The government provides food insurance for anyone who might need it, and mandates auto and homeowner's insurance. "

    First, homeowner's insurance is only mandatory for your mortgage company, not the government and auto liability insurance is all that is mandated by the government. If you want to insure your own car, it's up to you and/or your lien holder.

    Neither homeowner's insurance nor auto insurance pays for maintenance of the home/car (i.e. your transmission goes out, you're on your own). Health insurance is expected to pay for everything from checkups to office procedures to major surgery, and even afflictions related to lifestyle (e.g. drug rehab), which is a stupid. It's unsustainable by its very nature.

  • Chad||

    Excuse me. I meant that fire insurance with respect to your home is mandatory (via your taxes that pay the fire department).

    You are exactly right...the problems with health insurance are part of its very nature. The problems are not inflicted by government, and cannot be solved by markets.

    Indeed, the only "solution" to these problems posed by libertarians is to have lower levels of coverage, proving the point.

  • ||

    Yes they are caused by government, specifically with insurance, as pointed out many times by many people. As regards insurance government supported insurance cartels, government enforced specialty groups coverage mandates, and government enforced insurance deductible caps.

    And those are just some of the insurance market interventions. There are a lot of other government interventions to speak of.

    Why is the only markets with endemic problems are the ones that government has massively intervened in?

    Indeed, the only "solution" to these problems posed by libertarians is to have lower levels of coverage, proving the point.

    Really Chad? That's the 'only' solution you've seen, is it? Dude you undermine whatever credibility anyone might still afford you.

  • Andrew||

    Most insurance regulations that are in the books today were actual responses to acute failures of free market. You are having a fever not because you went to see a doctor, it is the other way around.

  • ||

    Got any examples?

  • ||

    Of course he doesn't.

  • ||

    is not the problem with high medical costs high medical costs? the problem is not the cost of medical insurance, it is the cost of medical care; which, paradoxically is lower with huge insurers that can negotiate with providers for better rates. the system needs more providers, and freeing up or restricting the insurance companies wll not significantly change the cost of care.

  • Neu Mejican||

    This is an important point. The problem is cost, but the way things get paid influence how much is paid. The debate needs to focus more on the concept of catastrophic insurance and lowering the cost of routine care. In the places where this has been done successfully, it has come about from changing the way healtcare providers are compensated.

    If doctors got a flat rate per patient to provide a service (keep me healthy) rather than getting paid to provide a particular procedure, then insurance could be focused on catastrophe rather than routine care coverage. Coops have moved towards something like this in some places and had good results.

  • Neu Mejican||

    The short version of this...pay doctors a salary, rather than fee per procedure.

  • ||

    The AMA monopoly staunchly opposed this. In fact they revoked licenses of anyone who worked on contract to stop the practice. (as well as anyone who undercut fees)

    But that's just a tiny part of the problem. Fee for service is not the problem, despite NPR propaganda.

  • ||

    That would be quite an accomplishment for the AMA, seeing as it is not a licensing body.

    And what exactly does the AMA monopolize?

  • ||

    Provider supply. Via the LCME and FSMB.

    Educate yourself

    http://www.ucpress.edu/books/p.....8.ch01.pdf

  • Andrea||

    One would think that more providers competing for insurance company dollars would drive the providers' prices down; however, more providers results in more services consumed (ex., supply drives demand).

    Seems there's an insatiable demand for providers' services from consumers. The only thing that stops them from consuming is the high cost of health care. Take that barrier away, and there's no limit to that demand.

    My guess is that after Obama's finished with insurance companies, he'll take on providers, then consumers. One piece at a time.

    Any mention of limiting access to providers now would just get everyone howling.

  • ||

    Seems there's an insatiable demand for providers' services from consumers.

    That's an absurdity.

    The only reason service consumption goes up is because their is no perceived cost to the consumer.

    This phenomena will only be greatly exaggerated by the current proposal and will continue to get worse as we approach single payer, universal, or socialized health care.

    The price mechanism has already been broken by massive government intrusion in the market.

    Put mathematically as perceived cost to the consumer approaches zero, consumer demand will naturally approach infinity.

    Simultaneously the the AMA/LCME/FSMB monopoly on providers does not allow supply to meet demand.

    Further reducing perceived cost, as this legislation will do, will just make the problem worse. It will result in ever increasing prices, and ultimately rationing, reduced quality and quantity.

  • Andrea||

    Yes, that demand is fueled by the perception that it is "covered".

  • ||

    There's nothing wrong with 'all you can eat' buffets, so long as they fairly compete with 'fee for service' restaurants.

    What we have is many government factors, subsidies, tax breaks, regulations, etc, forcing every one into 'all you can eat' restaurants.

    So feeling service is 'free' or else that they have 'already paid' of course they will tend to consume as much as they can.

  • ||

    A - Its hilarious that people argue price reductions ... while Massachusetts' & Canada's systems go broke and get more expensive.

    B - They argue cost savings, while the government already spends .50c of every $1 spent.

    C- They argue the greatness of Medicare, while Medicare is almost universally accepted as nearing bankrupt and unable to continue in its current form.

    D - They argue other types of insurance like home & auto, while making proposed health care insurance 100% different from those insurances.

    Meanwhile, nobody suggests that maybe allowing high deductable catostrophic policies purchased across state lines might solve most of the problems, with subsidies for the most poor who can't afford even that.

    I'd like, just once, someone to argue in favor of health insurance without making an illogical or error-filled reference to A through D. Of course, it won't happen.

    Chad and his types will just keep switching between errors. Its like the bop'em game. Knock down one error, and they pop up in another hole with a fresh one. Knock'em down there, and they resurface with a different error elsewhere.

  • ||

    The government spends $.50 of every $1.00 it spends? Amazing.

  • ||

    Um, No.

    He meant the government spends 50 cents of every dollar anyone spends. I.e., government at all levels spends 50% of the GDP of the US.

    He's a bit high. For 2009, the number is actually 45 cents. But when you add in private spending mandated by government, he's probably low.

  • Andrew||

    Medicare spends less per capita than private insurer because lower reimburse rate. So it is efficient. It is going broke for the same reason that larger employers private health plans are going broke. The real problems are fee for service payment by third party and demand that health plan pay for unrestricted access the health service. This arrangement won't work in any other sectors of the economy as well. One of these two has to go if free market is to work. Governent is not the problem here, through not a solution either.

  • ||

    Meanwhile, nobody suggests that maybe allowing high deductable catostrophic policies purchased across state lines might solve most of the problems, with subsidies for the most poor who can't afford even that.

    Everyone is suggesting that that isn't in DC and who doesn't have a (D) or (R) after their name.

  • ||

    So true. As long as "everyone" is limited to almost everyone who is commenting on this article.

  • ||

    Nope, practically everyone who's not a politician or a statist media mouthpiece has written something like that.

    Everyone who is honest and knowledgeable knows how to fix the problem. The solution is not the problem.

    There are enough economically savvy people in the GOP that knew how to fix it but they didn't when they could.

    Why? Because lots of money comes from insurance companies (don't want interstate competition), the AMA (don't want their monopoly broken up), trial lawyers (don't want loser pays), the AARP (don't want their cozy medigap biz interfered with), etc.

    Everyone in there will talk about fair competition.. so long as it's not them who has to fairly compete.

  • Copy+paste||

    how can regular people unironically defend "the poor insurance companies"?
    they literally make money from people's suffering by denying basic human rights.

  • ||

    Heath is both a lifestyle and a right and that *is* the problem. There are people who smoke 3 packs a day until their late 90's (albeit a very small number) that don't require expensive care and people who by no fault of their own, poor without insurance, tax the "system".

    All things considered, the dilemma here is not about who really deserves care, it is who pays for it.

    Given that medical maladies are mostly "equal opportunity" how does it make any sense to argue costs?

    We all will get sick at one point or another in our lifetimes and require care. Is the acquisition of wealth more important that life?

  • ||

    Wow. Enslaving other people is that simple for you.

    So you think the life you spend working to have something is actually the property of someone else.

    You only get one life. Whose is it?

    You think you may lay claim to the life of others.. and you think that others won't lay that claim on you.

    You really think you're the big dog? You really think government guns are pointed at the rich?

    Ever notice that the bigger government gets the greater the income disparity gets? The more the rich prey on the poor?

  • health on line||

    this sounds crazy to me! When people are so restricted as to where they can buy their health insurance, surely this just drives up the price of the premiums and makes it less affordable.

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    My only point is that if you take the Bible straight, as I'm sure many of Reasons readers do, you will see a lot of the Old Testament stuff as absolutely insane. Even some cursory knowledge of Hebrew and doing some mathematics and logic will tell you that you really won't get the full deal by just doing regular skill english reading for those books. In other words, there's more to the books of the Bible than most will ever grasp. I'm not concerned that Mr. Crumb will go to hell or anything crazy like that! It's just that he, like many types of religionists, seems to take it literally, take it straight...the Bible's books were not written by straight laced divinity students in 3 piece suits who white wash religious beliefs as if God made them with clothes on...the Bible's books were written by people with very different mindsets...

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  • Jun||

    Health care has been such a controversial and heated topic for quite a while now, and I've always enjoyed reading articles and blogs about it to get other people's view and opinions. So this was another interesting read.

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  • Jamie||

    Thank you for this interesting article. In the UK, health insurance has always been considered a privilege, not a necessity- a way of complementing the service provided by the NHS. However, with the NHS reforms on the horizon, more and more people are worrying that Britain will soon be left with a privatised healthcare system. People who are interested in medical insurance in Britain should compare health insurance online to find out more about their options.

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