Legal Commentary

The "Reform" In The Health Bill: If Only It Were So

By Big Tent Democrat

I like that Ezra Klein wrote the post he just did. Because I think it illustrates precisely what is wrong with the analysis provided by the Village Wonks. Ezra writes:

Insurers seem evil because of the marketplace in which they operate. The healthy don't buy as much insurance as the sick. The sick aren't as profitable as the healthy. Insurers, like all private firms, are very simple: They pursue profit like a pig sniffing after truffles. It is up to society to train them, and we do that by setting rules.

Health-care reform will establish many, if not all, of those rules. The individual mandate will mean the healthy cannot hang back until they become the sick. Insurers, for their part, will not be able to discard the sick in favor of the healthy. Perhaps more importantly, risk adjustment -- which compensates insurers with sicker customers by taxing insurers who have cherrypicked healthier people -- will end the days when it is profitable to do so. As the exchanges open up -- if they open up, more to the point -- all of this will work better and more smoothly. This is how the Netherlands' health-care system looks, and few would accuse their insurers of being evil.

(Emphasis supplied.) We do not live in the Netherlands. If what Ezra prescribed actually worked, it would have worked in even one state in the US. Regulation would work. It has not. The Exchange has not worked in any state the way Ezra describes. The individual mandate has not worked in any state the way Ezra describes. The excise tax has not worked in any state the way that Ezra describes. Only one thing has worked to contain health care costs in the United States - government run insurance plans. Those are the facts. In ivory towers, you can build any Rube Goldberg contraption you want and claim it will work. In the real world, one program HAS worked. Only one. Medicare. Therein lies the problem with the Village Wonk. He lives in the Ivory Tower. The rest of us have to live in the real world. Right here in the good ole USA - where regulators do not effectively regulate health insurance; where exchanges do not work; where excise taxes will result in less health care for workers, not lower health care costs and increased wages.

Speaking for me only

Full post as published by TalkLeft on December 11, 2009 (boomark / email).