Saturday, March 6, 2010

The Race to the Bottom

This is an excerpt from "Come Together," Hendrik Hertzberg's commentary
on the Health Care Summit, which appeared in the March 8 edition of The New Yorker.
The Democrats made it clear that they intend to cover the uninsured before another lifetime or two elapses; the Republicans made it equally clear that they do not. “We just can’t afford this,” Eric Cantor, the House Republican whip, said, adding dismissively, “In a perfect world, everyone would have everything they want.” But, even when the two sides seemed to agree on a particular goal, the similarities were irreconcilable, so to speak. For example, both sides say that they favor making it impossible for people with “preëexisting conditions” to be refused insurance. Obviously, this can’t be done by simply ordering insurance companies to accept such people. Too many of the young and healthy, knowing that they couldn’t be refused, would wait to buy insurance until they got sick; the ranks of the insured would grow thinner and sicker, and premiums would balloon. Without the universal or near-universal coverage that Democrats support, just telling insurance companies that they must accept everyone becomes another way of distributing health care by ability to pay. We have enough of that already. Segregating the sick into “high-risk pools”—the oxymoronic Republican solution—has generally flopped in states where it has been tried. A similar logic holds for allowing the purchase of insurance across state lines, another point of nominal bipartisan agreement. Without the sort of standards that Democrats want and Republicans don’t, those among the young, the healthy, and the poor who bought insurance at all would choose the cheapest, skimpiest policies from companies in the least regulated states, leaving people who need the kind of insurance many of us are lucky enough to have in shrinking pools with increasingly unaffordable premiums—the “race to the bottom” that the Democrats kept talking about.

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