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Friday, February 09, 2007

Paul Krugman: Edwards Gets It Right

Paul Krugman is relatively upbeat as he spots a flickering of light at the end of the long, long tunnel to health care reform:

Edwards Gets It Right, by Paul Krugman, Commentary, NY Times: What a difference two years makes! At this point in 2005, the only question seemed to be how much of America’s social insurance system — the triumvirate of Social Security, Medicare and Medicaid — the Bush administration would manage to dismantle. Now almost all prominent Democrats and quite a few Republicans pay at least lip service to calls for a major expansion of social insurance, in the form of universal health care.

But fine words, by themselves, mean nothing. Remember “compassionate conservatism?” I won’t trust presidential candidates on health care unless they provide ... specifics... And former Senator John Edwards has just set a fine example.

At first glance, the Edwards health care plan looks similar to several other proposals..., including one ... by Arnold Schwarzenegger in California. But ... extra features ... take it a lot closer to what the country really needs. ...

Right now, many people are uninsured because ... insurance companies “game the system to cover only healthy people.” So the Edwards plan, like Schwarzenegger’s, imposes “community rating” on insurers, basically requiring them to sell insurance to everyone at the same price.

Many other people are uninsured because they simply can’t afford the cost. So the Edwards plan, again like other proposals, offers ... help lower-income families... To pay for this aid, he proposes rolling back tax cuts for households with incomes over $200,000 a year.

Finally, some people try to save money by going without coverage, so if they get sick they end up in emergency rooms at public expense. Like other plans, the Edwards plan would “require all American residents to get insurance,” and would require that all employers either provide insurance ... or pay a percentage of their payrolls into a government fund used to buy insurance.

But Mr. Edwards goes two steps further. People who don’t get insurance from their employers would... purchase insurance through “Health Markets”: government-run bodies negotiating with insurance companies on the public’s behalf. ...

Why is this such a good idea? ...[M]arketing and underwriting — ... screening out high-risk clients — are responsible for two-thirds of insurance companies’ overhead. With insurers selling to government-run Health Markets, not directly to individuals, most of these expenses should go away, making insurance considerably cheaper.

Better still, “Health Markets,” ..., “...modeled after Medicare” ... offer a crucial degree of competition. The public insurance plan would almost certainly be cheaper ... — after all, Medicare has very low overhead. Private insurers would either have to match the public plan’s low premiums, or lose the competition. ...

So this is a smart, serious proposal. It addresses both ... the uninsured and the waste and inefficiency of our fragmented insurance system. And every candidate should be pressed to come up with something comparable.

Yes, that includes Barack Obama and Hillary Clinton. So far, all we have from Mr. Obama is inspiring rhetoric about universal care — that’s great, but how do we get there? And how do we know whether Mrs. Clinton, who says that she’s “not ready to be specific,” and that she wants to “build the consensus first,” will really be willing to take on this issue again?

To be fair, these are still early days. But America’s crumbling health care system is our most important domestic issue, and I think we have a right to know what those who would be president propose to do about it.

Previous (2/5) column: Paul Krugman: The Green-Zoning of America
Next (2/12) column: Paul Krugman: Scary Movie 2

    Posted by on Friday, February 9, 2007 at 12:15 AM in Economics, Health Care | Permalink  TrackBack (0)  Comments (117)


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