Saturday, February 6, 2016

Who Hates Obamacare?

Most of the people who buy insurance from the exchanges. (You've got to stop handing us straight lines, Professor Krugman.) At the low end, people are required to spend scarce cash on insurance; at the high end people are required to buy insurance and then pay for most of their care anyway. It's a miserly system and a much better deal for the insurance companies than for most of the people in the system.

The way I explain it is that a tent and and a place to pitch it is infinitely better than sleeping on the street, but most of us would really rather have a house with walls, heat, and insulation.  And then you get the supercilious misers who tell us that they themselves are wonderful for giving us a tent and we should be grateful for it!

If Clinton would campaign for, say, more regulation on health insurance companies and real price controls, she would probably have a case for preserving the privatized system. It would be a sensible market reform to outlaw the mergers that are making health insurance  a national oligopoly. But her funders would abandon her in a shot. I remember the process of the writing of the PPACA, and how any cost-control measures that might have cut into the profits of the health insurance industry were removed from the final bill.

There is a central contradiction in relying on private insurers to in the US system: insurers get a percentage of health care spending, so they have no incentive to reduce those expenses, and every incentive to encourage price rises.  There are reforms that could improve matters, but will they go anywhere in a political system so heavily influenced by the financial services industry?

[Minor changes 2016.02.16]

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