the linchpin of the plan is the false assumption that uninsured people will be able to find affordable health plans. A typical group policy in Massachusetts costs about $4,500 annually for an individual and more than $11,000 for family coverage...The legislation promises that the uninsured will be offered comprehensive, affordable private health plans. But that's like promising chocolate chip cookies with no fat, sugar or calories. The only way to get cheaper plans is to strip down the coverage — boost copayments, deductibles, uncovered services, etc.
...Study after study — by the Congressional Budget Office, the Government Accountability Office and even the Massachusetts Medical Society — have confirmed that single payer is the only route to affordable universal coverage. But single-payer national health insurance threatens the multimillion-dollar paychecks of insurance executives and the outrageous profits of drug companies and medical entrepreneurs.
I agree with a lot of this. I do think that the new "plan" makes unrealistic promises about the health insurance that might be available to people on modest incomes. I also agree that single-payer health insurance would lead to lower incomes for health-care providers. Finally, I agree that the Massachusetts plan is probably worse than single-payer, in that it will produce profits for insurance companies without any of the benefit of market discipline.
However, my diagnosis of the health care policy problem is not that private providers make excess profits. No doubt there are excess rents earned by many in the industry, but I do not believe that is the core issue.
I believe that the problem is that there is a disconnect between costs and benefits in the mix of health care services consumed. Under our current system, where insurance coverage kicks in at relatively low levels of expenses (even first-dollar coverage is common), consumers only confront health care costs indirectly through insurance premiums and taxes.
Under single-payer, costs and benefits are brought into line by government budgeting and control. Under my preferred approach, catastrophic health insurance policies with high deductibles would cause consumers to confront the cost of most health care services directly.