There are no coincidences, Part II

Dr Greenberg does, however, make one somewhat valid point (making him 1 for 5, not exactly Hall of Fame material): if all plans were individually owned, there�d be increased competition, and more efficient benefit usage. For more on this, see the posts on �Catastrophic vs Insular.�
Of course, he then goes on to break his one-point winning streak with this gem: �Individuals might belong to a health care plan for many years or decades.� Why? Oh, because plans would have an incentive to �invest in a person�s health.�
He�s kidding, right?
Carriers are impersonal, corporate entities which are designed to generate a profit for their shareholders. They do this by offering reasonable plans, at reasonable prices, for a reasonable time. Eventually, though, rates begin to climb (regardless of whether employer-based or individually owned), and adverse selection takes over. There�s also attrition due to age, family status, heck, where one lives. I would have expected to see this silliness from Paul Krugman, maybe, but a supposedly serious economist?!
Perhaps the most egregiously stupid idea put forth by Dr Greenberg is his Earned Income Credit Model of health care: in order to levelise the playing field for those with severe or chronic conditions, or advanced age, or maybe being pregnant, Dr G proposes a �risk-adjustment payment based on age, gender, disability, or prior hospitalizations.� In other words, government subsidized health insurance. Didn�t we already reject this idea?
So, his solution is to remove one 3rd party (the employer) and replace it with�wait for it�another 3rd party (the government). But it was the government�s tax policy that created the �problem� in the first place. So we�re back to square one, right?
Not exactly; now we�re actually behind the curve. That is, we�ve substituted one somewhat-inefficient 3rd party payor with a substantially-inefficient one. By putting the government in the position of subsidizing health plans, one guarantees that the cost of those plans will increase substantially (cf: college tuition).
Thanks to Dr Ford for bringing this interesting � if flawed � article to our attention.

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