You May Hate the Player, But the Game Deserves the Blame

Ezra Klein, noting the latest insurance industry study showing that insurance premiums are likely to increase if health-reform passes, writes:

This is the house they've built: an insurance market where plans are written for the healthy and all legal efforts are made to exclude the sick. That's meant premiums are somewhat lower than they'd otherwise be, but only because the people who most need health-care insurance aren't able to afford it, or in some cases, aren't able to convince anyone to sell it to them. Now that arrangement is ending and they're scared that they can't provide an affordable product to the people who need it. They may be right, but it's evidence of how deeply perverse their business has become, not of what's wrong with health-care reform.

That's one way to look at it. But Klein's conclusion rests on the assumption that the insurance industry exists to provide inexpensive protection and support to those deemed "in need" rather than a service business built to help provide a safety net against genuine catastrophe—you know, insurance—to those who want to pay for it. Essentially, this view entails seeing insurance as a social good rather than as a business, which explains why many reform advocates see a single payer system as their ultimate goal.

Now, that's par for the course for folks with a preexisting liberal worldview. And none of this is particularly surprising given that a) Americans tend to understand insurance as medical prepayment rather than actual insurance and b) the country has built its medical system around third-party payment.

To be clear, I'm no fan of how the insurers have conducted themselves in this debate, and I suspect certain industry policies are likely to irk people no matter how they're presented. But I'd say that concerns about rising premium costs (which seem legitimate to me, even if the insurance industry studies are somewhat dubious) are not primarily the fault of insurance company practices, but instead, should be seen largely as the consequence of our employer-based, third-party-payment medical payment system—a system that reform advocates want to expand rather than dismantle.