Tuesday, January 30, 2007

Healthcare Xbox Style

Remember all those riots over Xboxes and, I think originally, cabbage patch kids? I think "medicare for all" advocates could use that marketing model for their own policies. One idea my friend Raj mentioned seems particularly promising:

A number of states have great, cheap, efficient health insurance for state or municipal employees. Some have suggested allowing small businesses or self-employed folks to buy into these plans, since the regular insurance market is so expensive or skimpy for them. The problem with that is that those most likely to need care would buy-in, driving up prices, while others would buy cheaper private plans. The ideal solution, "medicare for all," forces everyone to buy-in, but we're working on making that politically feasible.

Raj's idea is to start with a pilot program. By limiting the number of businesses who could buy in, the adverse selection problem would be pretty minor and the overall premium rates would stay more or less the same. Perhaps more importantly, small businesses who didn't get picked for one of the coveted pilot slots would start clamoring (and lobbying) for the program to be expanded so they too could get the good insurance for reasonable prices that the state's low administrative costs make possible. The public clamor (though maybe absent the riots from the Xbox fights) would help change the debate and show how well public insurance works and that everyone wants in.

The legislature could respond to the lobbyists by saying "well, we can't scale this up too much more without diluting the pool . . . unless you want to put everyone in the pool by making it mandatory." And a lot of small business (not to mention Ford and GM and others with legacy costs) might be pretty happy at that point to take them up on it.

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