Map of life expectancy at birth from Global Education Project.

Monday, November 24, 2008

We are fools

ABC News reports the obvious: in the United States, when people lose their jobs, they also lose their health insurance. If they don't have major health care needs, they may be able to skate for a while. If they really need insurance, they can continue to buy into their employer's group plan for 18 months, if they pay the full cost, including what the employer used to contribute, plus 2%. But since they're out of work, that might not be possible. (This is because of a rider on a 1986 "Christmas tree" bill, the Consolidated Omnibus Budget Reconciliation Act, COBRA, in case you've run across the term.)

So, that's straightforward. A lot of lucky duckies doubly or triply shit outta luck. But because of our fragmented system of private health care plans, it gets worse. The people who have least need of insurance will stop paying premiums. The people who will take advantage of the COBRA option are the ones who have most need for health care. That means the insurance plans lose revenue faster than they shed costs, which means they have to raise premiums for everybody else. That means businesses will either be under greater financial strain, or they'll stop providing health insurance, or they'll raise the employer share and more people will opt out -- and the people who opt out will tend to be the healthiest people, which means -- you get the idea.

This is called the death spiral. And of course, it will just accelerate our economic collapse as the health care sector, about 17% of the economy, faces contraction. Now, consider a country whose people are smart enough to have established single payer national health care. None of the above happens. They weather the recession with much less human cost and shorter and shallower economic damage, because they have a huge automatic stabilizer built into their economies.

Uwe Reinhardt is a very prominent health economist. He has this to say about us:

As someone who grew up in Germany and lived for some years in Canada and got used to portable, life-cycle health insurance, I have always been amazed that Americans preferred the ephemeral health insurance that comes with the job at a particular firm and is lost with losing that job. Now, the foolishness of that preference is becoming clear to many middle-class Americans who spent their life denigrating 'government' health insurance.

Well, I don't know whether it's becoming clear to them or not, frankly. But maybe it will finally be clear enough, to enough people, that the Redistributionist in Chief will finally be able to usher the United States into the community of civilized nations.

We need universal, comprehensive, single payer national health care. Desperately. Now.

1 comment:

Anonymous said...

I am in that boat. Losing my job and health insurance (unless I can pay $391/month out-of-pocket) Dec. 1st. What a country. People don't matter, but property does.