Thursday, September 23, 2010

Thinking and Acting Anew

I long ago observed that the United States was the first country in the history of the world to overspend for health care. One might fault the distribution of those expenditures, but it is generally accepted that the total amount being spent is excessive. That has never happened anywhere before.

From that, I concluded that none of the traditional remedies associated with health care issues could be assumed to be reliable. Beyond that, the implications were not clear.

I believe, however, that one implication has emerged. Contrary to expectations, the health care reform legislation sponsored by the Obama administration has not proved to be particularly popular. According to a front-page story in the September 21 issue of the New York Times, attempts to repeal that legislation, or frustrate its implementation, is being pledged by a number of Republican candidates in this fall’s congressional elections.

I believe that can be attributed, at least in part, to the unprecedented phenomenon of over-financing. Of the five-sixth of the population who have health insurance, the great majority enjoy generous benefits and are well satisfied with the health services they receive. Cost is high, but not a problem to the individuals since payment is in most cases the responsibility of the employer or of government. The result is that there is little government can do to improve their situations and there are many possibilities for making things less favorable. Of the various improvements included in the health reform legislation, the two most often cited are the ban against denying coverage for pre-existing conditions and raising the age to which insurance companies must allow dependents to be included in family plans. Attractive as these might be, they benefit only a small percentage of the insured population.

A key feature of the legislation is the provision for universal coverage. While this is morally important, it is not a burning issue to the insured and not necessarily popular among all of the uninsured it is designed to help, at least some of whom may prefer the risk associated with being without coverage to the burden of paying high insurance premiums.

In other words, the condition of over-financing seems to have negated the time-honored popularity of expanding benefits and coverage. As Abraham Lincoln said (and as the title of this blog implies), “As our case is new, so we must think anew and act anew.”

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