So, how many lifeboats do we have?
Authored: September 8th, 2009 @ 10:51 PM
While the president is busy with his Congress rearranging the deck chairs on their Titanic health bill, conscientious listeners keep trying to raise the question … how much health care can we afford? As you listen to the empty promises tomorrow, remember that paying for health care can bankrupt an individual. An insurance company that fails to cover its outlays with premiums and returns on investment can also go bankrupt. Do we really want the government to re-invent itself as the payer of last resort so IT (we) can go bankrupt?
Why not make the insurance companies behave? You will hear (IF you listen between the lines) that we will not allow the insurance companies to look at the cost of risks. As for these unfunded mandates, have we learned NOTHING from the Fannie Mae and Freddie Mac disasters? Think of the crash in the housing market brought to us by years of good intentions with no attention to the attendant risks? Do we think that forcing insurance companies to cover risks for which they cannot charge (e.g., pre-existing conditions, no denying coverage, etc.) is going to somehow lead to a golden future where all medical charges are covered with magic money?
The hard but honest solution. No, the truth is that we have to decouple health care insurance from our employment, free up insurance companies to let them actually charge by risk and let consumers pick the coverage they want (so a non-smoker might actually cherry-pick insurance that rewards their good life style choices, other examples abound). Reinforce these market principles by taxing health care benefits as the income they are (recognizing that untaxed benefits punish the independent entrepreneur), and we might avoid that tens of trillions of dollars worth of iceberg.