Government

And the answer is … pay more of the health insurance premium for more people

From a New York Times editorial August 16, 2016 related to insurers leaving Obamacare exchanges:

It is clear, however, that Congress should strengthen the marketplaces to ensure sufficient competition. For example, it could encourage more healthy people to buy insurance by extending tax credits to families that now earn too much to qualify. Many of those people find it cheaper to pay the tax penalty for not having insurance than to buy it. If more healthy people participated, more insurers would want to be on the exchanges. 

Congress and state governments could also consider offering a government insurance plan in rural areas and other places where there is little or no competition, as President Obama and Hillary Clinton have proposed.

There is that word again, “competition.” It is the most overused and misunderstood word around when it comes to health care. When you have a system that relies on negotiated fees and networks of participating health care providers, more competition is counterproductive. The more insurers seeking to enroll providers in a finite area, the less leverage each has to negotiate lower fees because they cannot deliver more patients. 

In addition, how far can competition go to affect premiums when the bulk (85-90%) of any premium represents the cost of health care used by the insured population and related expenses such as network maintenance. In addition, regulators oversee the setting of premiums thereby preventing price fixing even where there is limited choice of insurer. 

Competition among insurance companies is not the issue, but somehow the NYT makes the leap from sufficient competition to spending more taxpayer money to subsidize premiums for more and higher income Americans on the theory the tax penalty for not having coverage is an inadequate incentive (not to mention there are so many loopholes and the penalty can only be collected via tax refunds). 

Let me think about this🤔 Families currently earn too much to be subsidized to buy health insurance, so we encourage them to shirk this responsibility, not only under the law, but to themselves by giving them more of other peoples money to buy their own insurance, the use of which is entirely in their hands. Based on healthcare.gov, a family of four in my state earning up to $97,000 a year is eligible for a premium subsidy. 

We need to ask, if such families can’t spend their money on health insurance, what can they spend it on? The answer is not necessities, it’s on other stuff, stuff that provides more fun that buying insurance or paying medical bills. It’s not a matter of can or can’t, it’s a matter of choice and there is no reason other Americans should have to support those choices. 

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