Monday, April 07, 2008

Paul Krugman and Health Care Costs

Paul Krugman, from last week, on John McCain's Voodoo Health Economics. Now I'm no McCain fan, nor am I am I intimately familiar with his health care plan, but as a general matter, I know for a fact that market competition is the best method for providing goods and services. Krugman attempts to refute this by pointing out that those with preexisting medical conditions (like Elizabeth Edwards or John McCain's cancer) would not be able to afford medical insurance even if market competition lowered insurance costs. To that I'd respond ... duhhhh.

To act as though the problem of high costs for those with preexisting medical conditions is an example of market failure is just plain ridiculous. If you have no insurance and you want to be covered, of course it's going to cost a hell of a lot if you have a preexisting condition. Insurance companies are in the business of selling insurance and making money, not taking on charity cases. To act as though people with preexisting medical conditions shouldn't have to pay for those conditions accordingly in a market system is to say that my car insurance company should insure me for the same cost as every other driver even though my car happens to be on fire. It's not an issue of the market failing, it's an issue of individuals being in situations where they can't afford to cover their own expenses.

The real issue here is the argument for mandated universal coverage that Krugman has been pushing since the primaries started. You don't have the problems of individuals seeking insurance with preexisting conditions in any system where health insurance coverage is mandated. In theory, the costs of insurance should be reduced if everyone is paying into the system. But whether you have a system of mandates or not, someone is being neglected. Without mandates, the neglected are the sick without medical insurance. With mandates, the neglected are the young and healthy, forced to pay costs they may not have otherwise chosen to pay.

Here's the difference- society can find ways to help with those who have fallen on hard times, whether through charity or the more liberal notion of government assistance programs. Forcing people to purchase health insurance they don't want? It's just not right man. It's government putting money in the pockets of the insurance industry and thinly veiled tax and government lifestyle mandate.


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