Single Payer Coming?

It looks like we might be heading in the direction of a single payer health care system, but note in the way we wanted. Aetna is seeking to buy Humana. While this would not actually be single payer, it would further decrease competition in the insurance industry. There is also speculation that UnitedHealth is interested in purchasing Cigna and Aetna. Instead of a single=payer system modeled on Medicare, we could wind up with a more monopolistic system, which should please Republicans. These purchases would be subject to anti-trust review.

Aetna purchasing Humana would also give Aetna a much larger share in the Medicare Advantage market. So much for George Bush’s plan to supposedly increase competition and choice for Medicare patients. The plan has was more designed as a reward to the insurance industry for all the contributions they have made to the Republicans.

In related news, The New York Times repeated misleading information on health care rates which I previously discussed. Only plans desiring rates over ten percent are required to submit their requests. Insurance companies have multiple plans, and are only seeking increases on some plans, leaving less expensive choices for those who take advantage of the exchange to compare plans. Plus the requests for larger rate increases will not necessarily be granted.

However, should private insurance rates still be too high, single payer remains the most cost-effective means of providing health care coverage. This could turn into a major issue in Bernie Sanders’ favor.

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6 Comments

  1. 1
    David Duff says:

    This from a letter sent to the NYT by Don Boudreaux of 'Cafe Hayek':

    "“Health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected.”

    Wow!  Who’d a-guessed that when government arranges for Dick and Jane to buy widgets using Bob’s and Ann’s money that Dick and Jane would buy more widgets, and become less sensitive to the price of widgets, than when spending only their own money – and that, in consequence, the price of widgets would rise?  How surprising!"

    Sums it up, I think.

  2. 2
    Ron Chusid says:

    Doesn’t sum it up. This couldn’t be more wrong.

    In the case of health insurance on the individual market, insurance is less expensive for more people if comparable coverage is compared.

    Previously, without needed government regulations, the free market gave us a system in which many policies sold were crap, failing to provide comprehensive health care coverage. Rates typically went up by double digit amounts annually, and many people who had already had medical problems could not buy insurance at all.

    Now that the government added needed regulations, everyone can obtain coverage and prices are more reasonable.

  3. 3
    MostlyRight says:

    Ron,

    I'm curious why you think the most simple laws of economics don't apply to health care markets.  I'm also curious to know when you think health care and health insurance markets were last free markets, in the classic sense of the term.  These markets have been one of the most regulated, distorted, massive-government program influenced, monopolized, cost-controlled, price hidden from consumer, high barrier to entry markets for a very long time.

  4. 4
    Ron Chusid says:

    The rules of economics do apply to health care markets, but what conservatives think are the “rules of economics” are fallacies based upon ideology which often don’t apply in the real world.

    Insurance markets have never been unregulated free markets. That model does not work for insurance markets, or you lead to systems such as we had were insurance companies increase their profits by denying coverage. That is one reason why health care coverage is not left to an unregulated free market anywhere. This is something the free market is not able to handle without government regulations to make sure everyone plays fair.

  5. 5
    J Ryan says:

    Mr. Chusid,

    A third-party payment system is a distortion of a free-market, not something it gives us. Further, government regulations have led us down this road so to say that gov’t has to save us from something it created seems inconsistent. Finally, as a conservative, I would say that diminishing returns and opportunity costs have also been neglected, which is far from being fallacious or ideologically driven, no?

  6. 6
    Ron Chusid says:

    Risk sharing with a third party payment system is the only realistic way to handle health care costs. It is not a distortion of the free market. It is what markets will create in the real world–hopefully with the necessary regulations to prevent the types of abuses we have seen. The conservative ideas of a free-market is a fantasy which does not, and cannot exist in the real world.

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