Paul Krugman’s NY Times Op-Ed today finally makes a correct observation, which is that the US health insurance industry is not presently competitive. His observation that we need to:
… bring some real competition to the health insurance market, which is currently a collection of local monopolies and cartels…
is exactly right. By regulating health insurers at the state level, we take our national consumer buying power and immediately divide it into 50 little autonomous units. We take that potential buying power and entrench relationships by assigning choice of insurers to a few corporate benefits managers, rather than let consumers flow to attractive plans.
Paul’s hysteria has overwhelmed him through this political cycle. But he gets this one right. My question is: When will the conservative movement ADMIT that we don’t have a competitive marketplace now? When will they TAKE THE LEAD and campaign that it’s broken? We may wind up with the kluge of a “public option” to “keep the insurers honest?” Perhaps we’ll need to call that a “kruge”. In the end, I’m left to wonder whether conservative legislators and commentators just don’t get this, or whether they’re tied to the insurance lobby.
Blasting away at state-by-state regulation is one part of the solution. Blasting the tie between employment and insurability is another part of the fix. Enforcing some standard contract terms and mandatory risk pool membership is yet another. I discuss it in detail here.