Fifth Wheel

by James Surowiecki
The New Yorker
January 4, 2010

The wayward, patchwork plan that we seem likely to end up with is probably a good reflection of the wayward, patchwork opinions that most legislators have on the subject.

So where’s the contradiction? Well, Congress’s support for community rating and universal access doesn’t fit well with its insistence that health-care reform must rely on private insurance companies. After all, measuring risk, and setting prices accordingly, is the raison d’être of a health-insurance company. The way individual insurance works now, risk and price are linked.

This kind of risk evaluation — what’s called “medical underwriting” — is fundamental to the insurance business. But it is precisely what all the new reform plans will ban. Congress is effectively making private insurers unnecessary, yet continuing to insist that we can’t do without them.

The truth is that we could do just fine without them: an insurance system with community rating and universal access has no need of private insurers. In fact, the U.S. already has such a system: it’s known as Medicare. In most areas, it’s true, private companies do a better job of managing costs and providing services than the government does. But not when it comes to health care: over the past decade, Medicare’s spending has risen more slowly than that of private insurers. A single-payer system also has the advantage of spreading risk across the biggest patient pool possible. So if you want to make health insurance available to everyone, regardless of risk, the most sensible solution would be to expand Medicare to everyone.

That’s not going to happen. The fear of government-run health care, the power of vested interests, and the difficulty of completely overhauling the system have made the single-payer solution a bridge too far for Washington.

http://www.newyorker.com/talk/financial/2010/01/04/100104ta_talk_surowiecki

So James Surowiecki joins the chorus of those of us who say that we have no need for private insurers and their unwanted service of segregating risk and setting prices accordingly, and that the most sensible solution would be to expand Medicare to everyone.

Yet he echoes the words of our progressive legislators when they first commend and then dismiss the Medicare for all model with the non sequitur, “That’s not going to happen.”

Time for our activism to reach a crescendo. We need to make it happen!