The Corner

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Market Failure?


A reader accuses me of lying — but I’ll overlook that as his letter raises a typical liberal plaint that should be answered:

You write “According to Census and HHS data, 10 million have incomes more than three hundred percent of the poverty line, meaning they could afford coverage but for some reason choose to forgo it.”   That “some reason” is:  If you’re a 29 year old software designer and you want to live in a one-bedroom apartment reasonably near where you work and you want a car and cable TV and a lifestyle that approaches normal for a college grad with a white collar job, you need to be making a lot more than 300% of the poverty level before you can shell out for health insurance.  There just isn’t enough money anymore in the pockets of anyone except the wealthy few.  This is a market-created condition.  Take it from me.
Health insurance policies are expensive. But this is not a “market-created condition.” Most state governments have larded on mandates — insisting that companies cover IVF and alcohol counseling, for example. Government has also forbidden interstate competition in health insurance. Further, private insurance policies are charged an extra premium to cover the shortfall in what Medicare and Medicaid pay providers. We should reform insurance laws to permit the sale of cheap, high-deductible, catastrophic-only coverage for the young, healthy population. If such products were available, most of the healthy uninsured would buy them. This is one reason the analogy to car insurance is inexact. There are high-deductible, catastrophic plans available.
As for the needy uninsured who would still not be able to afford health insurance, we could offer subsidies at a fraction of what it would cost to create Medicare for all, which is what the Democrats are aiming for. Tort reform would also bring down costs.