Tuesday, February 24, 2009

The President and The Republican Response

The President called for making health care affordable for all Americans. One thing that we should consider is whether this means the same price for all Americans. What is affordable for a person with a $150,000/year income will be much different from what is affordable for a person wit a $25,000/year income. Making the price the same for both may not be the best idea. The person with higher income can make a lot more purchases of a good at a given price. Most of us don’t like the idea of charging prices for medical care based on income. But it is important to note that right now if both the individuals above get the same insurance policy through their employer, the person making $150,000 will actually end up paying less because they get a bigger tax break on the insurance premium. The insurance premium is not taxed. We are already not charging the same price for all individuals getting insurance. Perhaps we should be willing to at least ponder a sliding scale of fees for the care itself.

After the President’s address, The Governor of Louisiana said that government running the health care system is not the answer. As far as I read the President’s agenda, having the government run everything was not part of his agenda. While there are many advantages to the free market, the Governor’s claim that a free market system can result in care hat is available to and affordable for all seems hard to imagine. While we do not have a perfect free market system at present, the system right now is closer to free market than totally government run. We certainly do not have a system that is affordable to all at present.

This is a time to avoid partisan politics (as even the Governor of Louisiana said that we should be interested in the quality of solution rather than the part of the person making the suggestion) and think very hard about the incentives that any plan sets up, whether they are any different from the incentives we have at present, and how the change in incentives will bring about any change in the results of the system—particularly controlling the level and growth of costs—over time.

No comments:

Post a Comment