How an insurance mandate could leave many worse off

Here is my NYT column this week and not surprisingly it covers health insurance.  Excerpt:

At this point, it seems more plausible that the cost of health
insurance will keep rising, just as the costs of health care services
have continued to climb. The upshot is that the burdens of mandatory
purchase, the subsidy costs and the associated implicit marginal tax
rates will all increase, eventually to the point of unsustainability.

A further problem is “mandate creep,” which we’ve seen at the state
level, as groups lobby for various types of coverage – whether for acupuncture, alcoholism and fertility treatments, for example, or for chiropractor services or marriage counseling.

There are now about 1,500 insurance mandates among the various states,
and hundreds of others are under consideration. The dynamic at work
here is that the affected groups have a big incentive to push for
mandates, while most other people are unaware of the specific issues
and don’t become involved.

Because mandates don’t stay modest
for long, health insurance would become all the more expensive. The
Obama administration’s cost estimates haven’t considered these
longer-run “political economy” issues.

There is more to the argument and I urge you to read the whole thing.  Do not forget my penultimate paragraph:

We’re often told that America should copy the health care institutions
of Western Europe. Yet we’re failing to copy the single most important
lesson from those systems – namely, to put cost control first. Instead,
we’re putting our foot on the gas pedal and ratcheting up the fiscal
pressures on the system, in the hope that someday, somehow, it will all
work out.

Of course much of this piece also can be taken as a plea for more government-supplied insurance; that debate didn't fit in the 900-word limit.  The more important lesson, for the time being, is that we're on the verging of passing a policy that simply cannot and will not work.


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