Tuesday, January 16, 2007

Krugman Makes the Case for Single Payer ...

... and leaves me unconvinced.

In a recent column, Paul Krugman argues that Gov. Schwarzenegger's health care plan is flawed, and says that a government-run single payer system is the only solution to current problems. He describes the Governator's plan as follows:
The Schwarzenegger plan, by contrast, is a series of patches. It forces everyone to buy health insurance, whether they think they need it or not; it provides financial aid to low-income families, to help them bear the cost; and it imposes "community rating" on insurance companies, basically requiring them to sell insurance to everyone at the same price.
As much as I dislike regulation instinctively, this strikes me as a somewhat reasonable approach to today's health care mess. I especially like the last part about requiring insurance companies to sell to everyone at the same price. The current system discriminates against small businesses in a manner that is completely unfair.

But Krugman doesn't like the plan, for the following reasons. First, he says: "in the end health care should be a federal responsibility. State-level plans should be seen as pilot projects, not substitutes for a national system. Otherwise, some states just won't do the right thing." Hmm, because some states might make bad policy, we should make sure the federal government sets up one national policy. Because the federal government would never make bad policy that applied to the whole country, would it? No, of course not.

Then, he explains that he prefers a "single-payer health insurance system," which he describes as "similar to Medicare, under which residents would have paid fees into a state fund, which would then have provided insurance to everyone." He then explains that this would be less "intrusive" than Schwarzenegger's plan.

OK, first off, a government monopoly on health care insurance is less "intrusive" than a private system with government regulation? I don't think so. If I don't like the government plan, I have no other options! Second, let's think about some other areas where there is a government monopoly. How about, say, the postal system. How has that worked out for you Mr. Krugman? For me, it has been nothing but long lines and bad service. Is any industry really better off when competition is eliminated?

The good news is a single-payer system is not likely to happen any time soon. Americans understand socialism and they don't like it. But the bad news is that well-respected people like Paul Krugman are out there trying to convince people that this is a good idea, and at the margins he may actually garner support for it.

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