12 January 2007

Krugman on Arnold's plan

Paul Krugman's column on Schwarzenegger's plan is at Smirking Chimp. He writes that he’s glad to see another Republican governor speaking out with a real plan to get more people covered, but that state projects should be pilots and we should have a federal system. Also, he compares the governor’s bill (to its detriment) with Senator Sheila Kuehl’s bill from last year — which she’s reintroducing this year, same number: SB840.

“There are three main reasons why many Americans lack health insurance,” Krugman writes. “Some healthy people decide to save money and take their chances (and end up being treated in emergency rooms, at the public’s expense, if their luck runs out); some people are too poor to afford coverage; some people can’t get coverage, at least without paying exorbitant rates, because of pre-existing conditions.”

Because Schwarzenegger's plan forces people to buy insurance, provides aid to those who can’t afford insurance, and forces insurance companies to adopt strictures on their business model, it "requires a much more intrusive government role than a single-payer system. Instead of reducing paperwork, the plan adds three new bureaucracies: one to police individuals to make sure they buy insurance, one to determine if they’re poor enough to receive aid, and one to police insurers to make sure they don’t discriminate against the unwell.”

RJ Eskow is slightly more positive about the proposal but writes that it's flawed in that it requires people to “buy insurance from private providers only, as with most ‘mandated coverage’ proposals. This leaves insurers with no incentive to perform better as an industry. The way to address that is by allowing people to buy into Medicare, then challenging private insurers to do better.”

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