What about the government option? The question is, do we really want even more government involvement when the plan already in place, Medicare, teeters on the brink of insolvency? It’s laudable to cry “care for all,” but smaller experiments in Tennessee and Massachusetts have been disasters, and turning a blind eye to this in a head-in-the-sand feel-good way is worse than naïve—it’s downright stupid. A brief, well stated argument against more government involvement can be found here. One alternative that seems attractive is the idea of health cooperatives. These are nonprofit groups, owned by the patients themselves, that would negotiate with the insurance companies. This would permit coverage to be divorced from a person’s employment, a major flaw in the current system.

The idea of health cooperative is an important one, and deserves special mention. If the patient’s health coverage could be divorced from the workplace, this would solve a fundamental problem of the care delivery system. Unfortunately, it’s tied to the principles of healthcare insurance in general. Large groups of workers by their nature diffuse the health risk both by their size and the fact that you are selecting out a healthier population that is younger and able to work. Therefore, they are able to negotiate less expensive rates. A health-care cooperative, to incorporate the more elderly and infirm, would have to be large, require a mix of the healthy and unhealthy, and must be done in conjunction with the imposition by the government of a mandate for individual insurance by all parties, excepting the very indigent (more about that later). Fees would be higher than in more “favorable” groups to insure, or benefits lower, or there would have to be government subsidies. Government assistance in this way would still be preferable, in my opinion, to a government run option. Health cooperative set up on a regional basis might also work, but unless organized in some grass-roots manner, could be a back door to a competing government insurer. Perhaps they could be overseen by nonprofit group such as Kiwanis or Rotary, or even organizations such as the AAA. Creative minds could probably devise a non-governmental solution.

Jonathan Gruber, Ph.D. has proposed eliminating or limiting the income-tax exclusion for employer-sponsored insurance expenditures. While he considers this a win-win approach, he admits it would drive individuals to a new universal coverage plan. This might work well in conjunction with health cooperatives, but I’m leery of a plan that, in essence, uses higher taxes to force a change in the marketplace. I’ll let others decide the relative merits of this approach.


NEXT: The Solutions, Part 3, The Doctors


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