Tag: health insurance premiums

Events This Week

Tuesday, March 31, 2009

POLICY FORUM - Can the Market Provide Choice and Secure Health Coverage Even for High-Cost Illnesses?

12:00 PM (Luncheon to Follow)

In a study recently published by the Cato Institute, economist John Cochrane argues that the market can solve a huge piece of the health care puzzle: providing secure, life-long health insurance and a choice of health plans to even the sickest patients. The key, Cochrane explains, is to eliminate government policies that force the healthy to subsidize the sick, such as the tax preference for employer-sponsored coverage and other attempts to impose price controls on health insurance premiums.

Featuring John H. Cochrane, Myron S. Scholes Professor of Finance, University of Chicago Booth School of Business Research Associate, National Bureau of Economic Research; Bradley Herring, Assistant Professor, Johns Hopkins Bloomberg School of Public Health; moderated by Michael F. Cannon, Director of Health Policy Studies, Cato Institute.

Please register to attend this event, or watch free online.


Friday, April 3, 2009

PglennOLICY FORUM - Drug Decriminalization in Portugal

12:00 PM (Luncheon to Follow)

In 2001, Portugal began a remarkable policy experiment, decriminalizing all drugs, including cocaine and heroin.

In a new paper for the Cato Institute, attorney and author Glenn Greenwald closely examines the Portugal experiment and concludes that the doomsayers were wrong. There is now a widespread consensus in Portugal that decriminalization has been a success. The debate in Portugal has shifted rather dramatically to minor adjustments in the existing arrangement. There is no real debate about whether drugs should once again be criminalized. Join us for a discussion about Glenn Greenwald’s field research in Portugal and what lessons his findings may hold for drug policies in other countries.

Featuring Glenn Greenwald, Attorney and Best-selling Author; with comments by Peter Reuter, Department of Criminology, University of Maryland; moderated by Tim Lynch, Director, Project on Criminal Justice, Cato Institute.

Please register to attend this event, or watch free online.

Topics:

There Ain’t No Such Thing as Market-Based Universal Coverage

Over at The Corner, Harvard Business School professor and Manhattan Institute scholar Regina Herzlinger urges conservatives to support universal coverage – but in a market-oriented way. That is an absurdity. Once the government adopts a policy of universal health insurance coverage, a free market is impossible and the casualties begin to mount.

As a model, Herzlinger points to Switzerland, “which enables universal coverage without any governmental insurance through this system.” Switzerland requires all residents to purchase “private” health insurance; dictates the content of that insurance; and dictates the price. As I explain in a recent Cato paper, once the government controls those decisions, you’ve got socialized medicine.

My colleague Mike Tanner observes that the Swiss government’s power to control the content of “private” health insurance allows special interests to lard up people’s health insurance with their services – whether Swiss consumers want them or not:

The expansion of benefits has driven up the cost of insurance…As Uwe Reinhardt has noted, “Over time, the growth in compulsory benefits has absorbed an increasing fraction of the consumers’ payment, thus compromising the consumer-driven aspects of the Swiss system.”

Tanner also reports that the government’s power to dictate health insurance premiums is harming the sickest Swiss:

Evidence shows that the community rating requirements are…leading to the over-provision of care to the healthy and the under-provision of care to the sick. In addition, the prohibition on risk management discourages the development of new and innovative products.

In this Cato paper, University of Chicago business school professor John Cochrane explains how such price controls harm sick patients and suppress innovative new products.

Herzlinger is an extremely passionate and knowledgeable advocate of market-based health care. But when it comes to universal coverage, readers of National Review are better counseled by the magazine’s editors, who write:

to achieve universal coverage would require either having the government provide it to everyone or forcing everyone to buy it. The first option, national health insurance in some form or other, would either bust the budget or cripple medical innovation, and possibly have both effects. Mandatory health insurance, meanwhile, would entail a governmental definition of a minimum package of benefits that insurance has to cover…

Republicans should go in a different direction, proposing market reforms that make insurance more affordable and portable. If such reforms are implemented, more people will have insurance.

Some people, especially young and healthy people, may choose not to buy health insurance even when it is cheaper. Contrary to popular belief, such people do not cause everyone else to pay much higher premiums. Forcing them to get insurance would, on the other hand, lead to a worse health-care system for everyone because it would necessitate so much more government intervention. So what should the government do about the holdouts? Leave them alone. It’s a free country.

Herzlinger is correct that “it is 2009, not 1992.” If we want America to remain a free country in 2009 and beyond, we must reject universal coverage.