With congressional leaders hammering out a compromise between the House and Senate health-care reform bills, it might be nice to pause from the details and look at the big picture (though we'll be back to the details soon enough). James Surowiecki does a nice job summing up the health-care bill in this week's New Yorker; explaining why single-payer would be best but how this system works.
The truth is that we could do just fine without them: an insurance system with community rating and universal access [the two major regulatory improvements in the health care bills] has no need of private insurers. In fact, the U.S. already has such a system: it’s known as Medicare. ... Over the past decade, Medicare’s spending has risen more slowly than that of private insurers. A single-payer system also has the advantage of spreading risk across the biggest patient pool possible. So if you want to make health insurance available to everyone, regardless of risk, the most sensible solution would be to expand Medicare to everyone. That’s not going to happen. The fear of government-run health care, the power of vested interests, and the difficulty of completely overhauling the system have made the single-payer solution a bridge too far for Washington, and for much of the public as well. (Support for a single-payer system hovers around fifty per cent.) That’s why the current reform plans rely instead on a mishmash of regulations, national exchanges, and subsidies. Instead of replacing private insurance companies, the proposed reforms would, in theory, turn them into something like public utilities. That’s how it works in the Netherlands and Switzerland, with reasonably good results.
Quite so. And putting private insurance companies into a regulatory framework that essentially makes them public utilities may be the first step toward actually making them public utilities, even without a public insurance option that might drive that process. For another simplifying look at the mechanics of the bill, check out Alec MacGillis here.
-- Tim Fernholz
