This One Goes to Eleven (Robert Wright & Mickey Kaus)

[DWAnderson]

Originally Posted by AemJeff

"Rationing" will effectivlye occur when health insurance becomes unattainable for people with lesser means - as the cost rises more quickly than the Ryan plans indexing allows for. The reason people believe that plans such as Ryan's won't move costs in a way that helps consumers is because the incentives don't work that way. Why would a rational provider take on millions of customers with fixed means who also represent huge potential liabilities with increasing probability over time? The only way markets solve problems like this is by making the benefits much more expensive - e.g. creating barriers to retirees getting access to healthcare. Defacto rationing. Which is why government mandates are required in the first place.

Q.E.D.

Some comments:

1. What is the scenario in which insurance benefits become unobtainable? Under the Ryan plan to be eligible for the $15K annual voucher plans must take all comers. I can see if health costs rise, the plans might cover less than previously, but that isn't rationing.

(IIn addition, the increase in health costs is also likely due to more expensive new treatment options, not existing ones becoming more expensive.)

2. Why would insurers create barriers and give up premiums? I can see how they would limit coverage available in various circumstances and in various ways so that costs match premiums. But that is what you want insurers to do, spread risk while staying in business. That isn't rationing either.

3. Do people really believe that a centrally controlled goverment entity immune to competition is better at controlling costs and encouraging innovation than multiple private insurers that would compete for voucher dollars?

4. The issue of mandates versus non-mandates isn't germane here as the Ryan plan operates under a mandate too: everyone must pay Medicare taxes and everyone to be insured gets a voucher to be used for insurance.