Comments on: Andrew Samwick’s Good Point About Health Insurance

By: mikeikon

mikeikon — Thu, 08 Oct 2009 04:32:33 +0000

My 5-step plan:

1. Eliminate tax incentives that tie insurance to employment (reduce taxes to compensate).

2. Crack down on fraud.

3. Allow competition across state lines.

4. Lower barriers to entry.

5. Set up an online database of insurance companies and plans where the public can compare plans and rate their experiences.

By: mikeikon

mikeikon — Thu, 08 Oct 2009 04:14:28 +0000

#1. Greater value than WHAT free market? I don’t see one around here.

#2. Medicare is broke.

By: mikeikon

mikeikon — Thu, 08 Oct 2009 04:11:50 +0000

You and ROA both have great points.

But isn’t the problem here that–because tax incentives have tied insurance to employment–people lose their insurance when they lose their jobs and then can’t get covered if they have a pre-existing condition?

Wouldn’t the solution then be to decouple insurance from employment?

This should also increase competition and bring down prices.

By: Adverse Selection is Not the Problem « Hypothetical Mean

Adverse Selection is Not the Problem « Hypothetical Mean — Thu, 08 Oct 2009 03:33:49 +0000

[...] comment » I hate to say it, but I think the excellent bloggers/economists Andrew Samwick and Donald Marron are entirely wrong when they say that “The problems of adverse selection and moral hazard in [...]

By: TomB

TomB — Tue, 06 Oct 2009 20:11:01 +0000

What is interesting is that at least 93 million Americans, or roughly 1/3 of the total population, currently get their health insurance from a non-profit. http://www.nonprofithealthcare.org/resources/BasicFactsAndFigures-NonprofitHealthPlans8.6.08.pdf

This should demonstrate the problem is not pursuit of profit, but something else.

By: Michael Robinson

Michael Robinson — Sat, 03 Oct 2009 12:34:08 +0000

“All of this discussion of Medicare-for-all in a public option is at best premature, since we have not seen whether a competitive, private system can function under the right form of regulation.”

All this discussion is “premature” only if we are holding out for a market solution for the sake of a market solution, as a matter of ideology.

In the empirical bumblebees-can-fly world, Medicare-for-seniors has already established “greater value (i.e., better service and lower costs)” than the free market. Why cast about for some postulated jury-rigged regulatory concoction for decades in the hope of chancing upon something that works, when there’s a perfectly good, proven, time-tested, and popular solution right here in front of our noses?

Markets fail. Deal with it.

By: Donald Marron

Donald Marron — Fri, 02 Oct 2009 12:18:03 +0000

You are absolutely right. That’s why these proposals are usually paired with provisions to get people into the insurance pool. As an analytic matter, the most natural (and, judging by comments from readers, most controversial) way to do this is to include an individual mandate. One of the interestng political questions is whether Congress as the votes to both (a) reduce screening by insurance companies while (b) reducing selection by customers. We will see.

By: ROA

ROA — Fri, 02 Oct 2009 05:32:12 +0000

If you prohibit exclusions for pre-existing conditions, how do you prevent customers from milking the system? If there is no exclusion for pre-existing conditions, why should I purchase health insurance before my doctor uncovers a serious illness? If I am in reasonably good health, it would be much cheaper to pay for an annual checkup and infrequent office visits out of pocket until I discover I have a serious illness. Then I scurry down to my nearest insurance company office and sign up for a “Cadillac” plan that will cover me until my illness is cured, at which time i drop my insurance again.