While I believe a healthy dose of the free market is necessary for a well functioning health care system support a system, Amanda Teresi’s arguments miss a fundamental point: the free market can never solve the health care crisis. This does rest upon some concern about health care as a special moral good, although that certainly holds as well. No just by its very nature free market health insurance does not work.
The central contention in Teresi’s argument is if people will be able to purchase portable insurance in a free market than many of the current problems including coverage of preexisting conditions would disappear. What would be a free market in health insurance? Given some of Teresi’s arguments it seems to fair to suppose that a government regulatory agency would ensure the solvency of the insurance company. In addition I doubt that she would argue against a regulatory system that requires rates to have some basis in fact. For instance if a carrier wants to charge more to women than men it must provide data to support this. No mandates in the type of benefits offered. No restrictions on underwriting methods used. No limits on the rates offered. In other words a basic set of regulation to make sure that a carrier can keep its promises and isn’t discriminate bases on non-economic factors.
Up until this week, I had been rather agnostic about the public option. Before looking at the philosophical issues: should the government set prices in the health care market place? What level of competition should there be in the health insurance marketplace? Should a massive government entity be involved in the health insurance marketplace? There was always a basic question: would it work?
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The circus is in town again and the most remarkable thing happened: one of the acrobats missed. While trying to jump rope on high wire above the stage one of the acrobats missed and barely caught himself before falling into the safety netting. Rather than spoil the show, catching and then pulling himself back up on the wire were an added treat and as impressive as the rest of performance.
But shouldn’t we expect perfection? Don’t the acrobats work eight shows a week and rehearse countless months before touring? This isn’t dancing with the stars, this is supposed to be a professional show.
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What has been lost in the outrage over Humana writing to Medicare Advantage members is that this type of dilema will happen more often if anything close to the current reform packages. One problem with public private partnerships is that corporations have not only the usual marketplace levers of competition prices, quality, and customer service, but also the levers of politics and lobbying as well. Will plans in the exchange need to sign gag orders to prevent them from informing members when subsidies are going to reduced?
Disclaimer: I am employed by Ingenix a subsidiary of United Health Group and these are my views and not the views of Ingenix or United Health.