Friday, August 8, 2008

Disputations: Is Single-Payer Health Care The Best Option?

Disputations: Is Single-Payer Health Care The Best Option?
"Superficially, the model seems to be a workable compromise between those who believe that markets should provide health care coverage through competing private health plans, giving more control to the individual, and those who believe that a government insurance program would be more efficient and effective in ensuring that everyone has adequate health care coverage. Those on the right can support the private plans, and those on the left can purchase the competing public, Medicare-like program. Those in the middle can decide which model would become more prevalent, so goes the theory.
Anyone who really believes in this model understands that the private insurance plans would have to be very tightly regulated to reduce the profound deficiencies in our current insurance markets. The current private insurance business model depends on selling the insurers' products to the large numbers of us who are healthy, especially the healthy workforce and their healthy families, while avoiding the need to contribute to the risk pools that cover those who have greater health care needs. Those costs are largely passed on to taxpayers through government programs.
Other nations that use private plans require effective pooling between plans through various regulatory mechanisms, reducing the problem of adverse selection and ensuring that premiums or taxes are adequate to pay for the care for those with greater needs. Even if the pools are nominally segregated, they function more like a universal risk pool through mechanisms such as risk adjustment and post-claims inter-insurance transfers.
The United States has a unique problem that would make it much more difficult to require private insurers to participate in a quasi-universal risk pool. On a per capita basis, we pay far more for health care than do other nations. Average-income individuals in other nations that use private plans can still afford premiums (or their tax equivalents). In those countries, only low-income individuals require some form of government subsidy for their care.
Compare that with the United States. For healthy risk pools, such as those of employer-sponsored plans, premiums are no longer affordable for average-income individuals and families, whether paid directly by the insured, or nominally by the employer. Imagine a tightly regulated insurance market that ended adverse selection and required benefits at a level that would prevent financial hardship for those with health care needs. The private insurers would find it absolutely impossible to provide us with compliant products that had affordable premiums."

No comments: