Saturday, March 18, 2006
MIchael Kinsley of Slate.com has a thought-provoking article on whether United States is ready for single payer health care program outlined by Krugman and Wells. He prefers more modest reforms and says,
. . . Much of it isn't insurance at all but a subsidy. The value of the subsidy is the difference between what the individual pays and what the insurance would cost in the free market. If people were buying health care or insurance with their own money, they might or might not spend too much—whatever "too much" is—but no one else would need to care if they did.
A subsidy has to take from someone and give to someone else. Everybody can't subsidize everybody. Or, to put it another way, society cannot give the average citizen better health care than the average citizen would choose to buy on his or her own. And this is what people want. Krugman and Wells believe that the average citizen will be sated by whatever bonus comes out of single-payer efficiencies. In this day of $100,000-a-year pills, I doubt it.
Even though we don't do it, most Americans surely think we ought to guarantee decent health care to everyone. In fact, most would probably be uncomfortable saying it's OK to have anything less than equal health care for everybody. Should a poor child die because her family can't afford a medicine that an insured, middle-class parent can pick up at the drugstore? Current government programs don't protect poor people very well against the cost of becoming sick. They do much better at protecting sick people against the risk of becoming poor. People who can afford insurance ought to protect themselves against a catastrophic health expense. But subsidizing this insurance for them is not only unnecessary, it is futile and unfair. No one is better able to afford health care for people of average means or above than they are themselves.
Krugman and Wells say that private insurance is flawed by "adverse selection": Insurance companies will avoid riskier customers. Only a single payer (that is, an insurance monopoly) can insure everybody and spread the risk. But anyone is insurable at some price—a price that reflects the cost they are likely to impose on the insurer. Adverse selection is only a problem to the extent that insurance is not really insurance, but rather a subsidy.
If you're not as hopeful as Krugman and Wells about being able to avoid rationing, you face the question: Should people be allowed to opt out of rationing if they can afford it? That is, if the system (private or single-payer) won't pay for the $100,000 pill, should you be able to pay for it yourself? Fear that this would not be allowed helped to kill the Clinton health-care reform 13 years ago. But explicitly granting some people life and health while denying these things to others is hard, even though this disparity has existed throughout history and is probably unavoidable. In fact, a serious defect of single-payer is that it makes all sorts of unbearable trade-offs explicit government policy, rather than obscuring them in complexities.