One of my favorite reads is the blog Carpe Diem by the economist Mark Perry. The posts are regular, clear, topical and always advance my understanding complex topics.
Over the past few months, Perry has been sharing observations and links about health care and economic demographics.
Regarding healthcare, he’s communicated his skepticism about the pending legislation by focusing on the market solutions that have developed to provide broad-based affordable health care. One phenomenon he’s looked at closely has been the emergence of stand-alone health clinics.
This weekend, Perry pointed to a loophole in the government plan: for many, the cost of paying a fine will be lower than buying health insurance. What about when you get very ill, you say? Well, the legislation forbids insurers from denying you coverage based on a pre-existing condition, so if you get sick, you’ll just go buy insurance.
In short, for those who are now privately insured through employers or by direct purchase, there would be substantial incentives to become uninsured until they become sick. The resulting rise in the cost to insurance companies as the insured population becomes sicker would raise the average premium, strengthening that incentive.
In the meantime, Perry points out, you’ll probably go to a stand-alone health clinic to get treated for your occassional illness.
The post is well worth reading, and the comments are even better. Proponents of the health plan rebut Perry’s observation by describing how this loophole can get closed.
At the core of Perry’s observations is the question of whether a comprehensive national solution that attempts to incorporate the embedded biases of existing industries can avoid the emergence of unintended consequences at the local level. His conclusion? It can’t.
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