Friday, June 12, 2009

Health Care Reform

This here is an interesting piece about health care reform and the current state of affairs.

"...during World War II a tax break was extended to non-wage benefits such as health insurance premiums paid by employers. Over time, this effectively tied most American health insurance to employment. This forces patients to fire their employer before they can fire their insurance company. It is small wonder why we get such poor treatment from insurance companies. The key to returning true competition to health care is to make it possible for individuals to fire their insurance company, which requires eliminating the tax break on employer-provided health insurance by extending it to privately purchased policies."
The author also explains why just extending Medicare is a bad idea, no matter how happy people may be with it. Medicare does cost less, because the government refuses to pay higher prices. As a result, everyone not on Medicare gets charged more to subsidise those who are.

Artificially lower reimbursement rates don't cover the full cost of procedures, so health care providers shift costs to everyone else. In other words, the relative lack of competition in today's market leads to higher insurance costs for people who aren't old enough to qualify for Medicare. Extending Medicare-like insurance to everyone is a fallacy of composition: What works for some cannot work for all as a matter of logic.
Its a very thought provoking article. Go read the whole thing. I'd add that the author doesn't even address making it easier for people to buy differing levels of coverage (ie. let young single people buy bare bones coverage instead of the fancy plans on offer with most employers) or even buy them across state lines.


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