It's a Health Insurance Subsidy, Not Health Care Reform

By Auerback, Marshall | CCPA Monitor, May 2010 | Go to article overview

It's a Health Insurance Subsidy, Not Health Care Reform


Auerback, Marshall, CCPA Monitor


OBAMACARE (1)

The health care legislation passed by Congress in March is important politically since President Obama now looks suddenly like a "winner." But will it actually achieve the objective of improving the nation's health care? More people will get insurance, yes, but will they actually get more health care paid for?

Not necessarily. We've had a bailout for bankers, and now the principle seems to be extended to the insurance industry. The health care bill entrenches the centrality of private health insurance companies and contains no serious proposals to limit costs. More people will get hit with deductions, co-pays, annual limits (for several more years), exclusions, and out-of-pocket expenses. This will ensure that health care remains too expensive for many Americans to actually take advantage of their new insurance. And premiums are bound to rise.

Health insurance remains the primary payment mechanism, not just for expenses that are unexpected and large, but also for nearly all health care expenses. The "reform" introduced by this bill largely promotes the status quo by pulling more people into an expensive health care system that is managed and funded by private insurers with no countervailing government option. Given that over half of all household bankruptcies are due to health care costs, forcing people to turn over an even larger portion of their income to insurance companies will further erode household finances. It's the Wall Street bailout principle extended to the health insurance industry.

Our progressive allies have criticized us for drawing attention to these uncomfortable truths and failing to celebrate the President's great social triumph. Yes, it may well have been catastrophic had the bill not passed, as it probably would have emboldened the radical forces of the right and torpedoed any hope of further significant reform legislation of any kind. But the "victory," such as it is, comes at the cost of a huge price subsidy to private health insurers.

Robert Prasch, a professor of economics at Middlebury College, notes that health insurers were losing premiums because employers were dropping coverage. This happened in part because they could not compete, since no other country in the Western world uses private insurance exclusively to provide health care. Healthy individuals were opting out because no reasonable calculation could show insurance to be good value for the money.

Why is this? Because the economics of private health insurance consists of marketing to people who are relatively unlikely to need health care, while avoiding selling it to those who are more prone to get sick. Of course, the opposite applies to a potential consumer of health care. Healthy individuals do not want to buy health insurance, and sick people pay too much on the basis of what the insurance industry considers to be actuarially sound principles. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

It's a Health Insurance Subsidy, Not Health Care Reform
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.