Free Market Fantasies In The Health Insurance Industry

…Next year, the federal government expects to provide about $130 billion for Americans [sic] to buy health insurance. … the bill is expected to surpass $180 billion in 2010.

… The subsidy - supplemented by an additional $11 billion in deductions for medical expenses and billions more in similar tax breaks for health insurance from states and municipalities [channeled directly to private corporations] - helps to explain why 64 percent of Americans under 65 get health insurance through their employers.

…the fiscal incentive isn't helping many of the people who need it most.

…while the nation has the highest per-capita spending on health in the world - about $5,400 in 2002 - 18 percent of the population under 65 remains uninsured.

…Medicaid has lower administrative costs than private insurance,…. But the new regime could be run privately as well, to take advantage of the private sector's superior track record on innovation [subsidized by taxpayers].

…This health care revolution, however, is unlikely to catch on nationally anytime soon. For starters, losing the tax break on employer-provided health insurance would be tremendously disruptive for the millions of Americans who get their insurance through their jobs. Perhaps most important, it would force higher-income families to buy health care without the tax break; that idea is probably as politically suicidal as abolishing the mortgage tax deduction.

Eduardo Porter, “Health Care For All, Just a (Big) Step Away,” New York Times, 12/18/05.