Wooden Nickels

Pretty much everything indicates that health care reform is going to be a top priority for the Obama Administration, and health insurers are taking notice.

WASHINGTON — The health insurance industry said Wednesday that it would support a health care overhaul requiring insurers to accept all customers, regardless of illness or disability. But in return, the industry said, Congress should require all Americans to have coverage.

Ezra Klein notes that looks can be deceiving; this “deal” casually elides the key issue of any universal mandate: affordability. That is, “community rating”, which provides that services are rendered at uniform cost regardless of existing conditions is the linchpin of universal coverage. While AHIP has noted that creating a more affordable health care system is imperative, they are currently unwilling to combine a universal mandate with universal affordability, which as far as I can tell, defeats the entire purpose. The whole idea is that pooling risk drives individual rates lower, even if accompanied by a de facto subsidization of those seeking more care. A mandate through the individual market would be akin to a requirement that everyone purchase a car, but to do so directly from the dealer. Obviously, the more sensible way to ensure car access would be to pool resources and buy the cars in bulk. Some “concession” by the insurance industry.

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