Friday, January 25, 2008

Today's Short Health Insurance Lesson

It is about the words "universal coverage" and "single-payer coverage." The two are not identical. Note that a candidate could be for universal coverage but not for having a single source of funds. That would mean wanting everyone to have insurance but the insurance could be sold by many different firms, some for-profit, some not-for-profit, and by the government. A "single-payer" proposal is something different and greatly hated by the insurance industry, naturally.

Universal coverage helps with the problem of access, letting everyone see a physician without worrying about being able to afford it and reducing the pressure on emergency rooms at hospitals. It's unlikely to save any money, though, and most likely would cost more than the current system (at least in the short-run), because more people would use medical care when it's more available and because competition in health care tends not to work to lower prices (the reasons for that are something I can discuss if there is interest in it).

Single-payer coverage would directly affect the costs of health care, by giving the one buyer much more power in price setting and negotiations, as is done in Canada. But it would also make the system more bureaucratic, and the general opinion seems to be that Americans will not want it enough to vote for it.

Still, universal coverage without that control of the purse strings will not cut health care costs.