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Universal Healthcare on the Cheap

December 19th, 2006 · 1 Comment

Interesting claim from U.S. News columnist Bonnie Erbe that only 15 million of the 45 million uninsured in America are in households earning less thant $25,000 annually. She suggests that the government could buy catastrophic health insurance for all of them at about $3,000 each, and leave the better off to attend to their own coverage. This obviously steals at least a couple bases. For one, presumably there are other people in that income range who do have insurance at present from one source or another, and any such plan would cover them too. For another, it strikes me as perhaps not an awesome idea to make coverage free if and only if you get really sick without provision for preventative care that would save on health expenditures in the long term. Still, this does seem like it might be the more relevant number to focus on: How many people are there who lack insurance and couldn’t realistically be expected to buy their own?

Tags: Economics



1 response so far ↓

  • 1 Grant Gould // Dec 20, 2006 at 7:35 am

    The major reason that high-deductible plans don’t also cover preventative care, even though that care would prevent exactly the sort of things they’d end up paying for, is that people switch insurers often enough that the insurer that pays for the prevention can’t internalize the benefit.

    It might well be the case that providing subsidized insurance, by making it more likely that every serious illness ended up covered by some insurance company, would make it more possible for insurance companies to bargain prevention-coverage among themselves and reduce the preventive-care externalities. Though that might have antitrust implications as well.