Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

"A strong conviction that something must be done is the parent of many bad measures."
  -- Daniel Webster

Sunday, December 06, 2009 :::

On a snowy day in Washington, the Senate was in session to vote on amendments to Senate majority leader Harry Reid's health-care bill. Reid, predictably, resorted to histrionics in his floor remarks. "14,000 people lose their health insurance every day," said Reid. "The American people don't get weekends off from this injustice."
This is a bit disingenuous, of course, as it's an estimate based on a rising unemployment rate.

The American health-care system isn't as apocalyptically bad as the fear-mongers would have you believe, but it certainly has its flaws, one of which is the artificial tie between employment and health insurance. Tax laws favor employer-provided health insurance over equivalently-higher cash salaries with which the employee might purchase health insurance on his own, thereby decreasing consumer choice and causing most Americans to be overinsured, which leads to overconsumption. The bill Reid is promoting would increase the incentives which tie health insurance to employment.

Another problem with the American health care system is that in many states, minimum coverage mandates prohibits the cheap insurance policies which would be more appropriate for many people than the typical full coverage plans. These mandates also reduce competition by ensuring that competition is more exclusively based on price, thereby favoring bigger players. Reid's bill would add similar mandates at the federal level (Megan McArdle has comments).

Malpractice insurance costs are also excessive, in part due to lawsuits resulting in exorbitant awards. Such excessive awards are rare, but so high and eye-catching that they add to insurance costs and to costs in excessively defensive medicine. Reid's bill would punish states that cap such awards.

If Congress wants to make health insurance cheaper, they should prohibit employers from providing it, prohibit insurers from paying for routine care, and cap damage awards nationally. Death panels would help, too, whether they were along the lines of what Sarah Palin was complaining about or whether they were more hardcore.

I don't think I'd support that bill, either, but at least it would be consistent with the complaint that medical insurance is too expensive.


::: posted by Steven at 2:52 PM

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Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

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