Paul Krugman's Dishonest Explanation for Why "One health care reform, indivisible" Paul Krugman's Dishonest Explanation for Why "One health care reform, indivisible" | Hot News of the World

Paul Krugman's Dishonest Explanation for Why "One health care reform, indivisible"

Obama is now proposing: "We know that we need insurance reform, that the health insurance companies are taking advantage of people."

I don't normally say that one has a choice between someone being dishonest or an idiot. Krugman isn't an idiot. Here is Krugman's explanation at the NY Times for why the health care bill shouldn't be broken down into parts:

Start with the proposition that we don’t want our fellow citizens denied coverage because of preexisting conditions — which is a very popular position, so much so that even conservatives generally share it, or at least pretend to.

So why not just impose community rating — no discrimination based on medical history?

Well, the answer, backed up by lots of real-world experience, is that this leads to an adverse-selection death spiral: healthy people choose to go uninsured until they get sick, leading to a poor risk pool, leading to high premiums, leading even more healthy people dropping out.

So you have to back community rating up with an individual mandate: people must be required to purchase insurance even if they don’t currently think they need it.

But what if they can’t afford insurance? Well, you have to have subsidies that cover part of premiums for lower-income Americans.

In short, you end up with the health care bill that’s about to get enacted. There’s hardly anything arbitrary about the structure: once the decision was made to rely on private insurers rather than a single-payer system — and look, single-payer wasn’t going to happen — it had to be more or less what we’re getting. It wasn’t about ideology, or greediness, it was about making the thing work.


The problem is this: Krugman's explanation is correct, but it also applies to the current bill as well. Yet, he has never raised this issue to argue against the entire health care bill. In 2008, the average price of an individual insurance policy was $4,704 and it was $12,682 for a family of four. If you don't get insurance, the fine in the Senate bill will eventually reach "$750 per adult in the household. This per adult penalty would also be phased in: For 2013, $0; $200 for 2014; $400 for 2015; $600 in 2016 and $750 in 2017." With these rules, the death spiral that Krugman is correctly concerned about will occur under the Congressional health care bill. With the above numbers and the inability to discriminate based on pre-existing conditions, it will pay for people to wait until they are sick before they get their insurance.

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