Health Care Reform Contradictions

More

James Surowiecki writes,

the public's skittishness about overhauling the system also reflects something else: the deep-seated psychological biases that make people resistant to change.

He goes on to list all of the irrational biases that lead people to want the status quo and resist real health care reform. He never mentions labor unions. Yet unions are a major political factor in the status-quo bias that Surowiecki laments.


Because of unions, the Democrats are in a love-hate relationship with private health insurance.  They hate private health insurance companies, but they love the employer-provided health insurance system, which is where private health insurance companies are entrenched.

I, too, hate private health insurance companies, but I have no labor union pressuring me to support the continuation of the tax deduction for employer-provided health benefits.  So I can support a policy of getting rid of that deduction, which might produce meaningful change.

The other contradiction concerns Medicare.  Medicare is in worse shape than private health insurance.  It faces trillions of dollars of unfunded liabilities.  Medicare is what President Obama is talking about when he says that America's health care system is unsustainable and something has to change.

But the status-quo bias in Medicare is enormous.  Seniors are happy with it, because the costs are borne by future generations. 

So, we have a Democratic Party that wants health care reform but at the same time wants to entrench Medicare and employer-provided health insurance.  In a way, the Democrats are lucky that they have political opposition.  Without it, they would have to face up to their own contradictions.

Jump to comments
Presented by

Arnold Kling

Arnold Kling earned his Ph.D in economics at MIT. He was an economist on the staff of the Federal Reserve Board. From 1986-1994 he worked at Freddie Mac. He started Homefair.com in 1994 and sold it in 1999. His fourth book, From Poverty to Prosperity, co-authored with Nick Schulz, is due out in April of 2009. He blogs regularly at Econlog.
Get Today's Top Stories in Your Inbox (preview)

The Remote Warehouse Where Confiscated Wildlife Ends Up

A government facility outside of Denver houses more than a million products of the illegal wildlife trade, from tigers and bears to bald eagles.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Is Wine Healthy?

James Hamblin prepares to impress his date with knowledge about the health benefits of wine.

Video

The World's Largest Balloon Festival

Nine days, more than 700 balloons, and a whole lot of hot air

Video

The Origins of Bungee Jumping

"We had this old potato sack and I filled it up with rocks and dropped it over the side. It just hit the water, split, dropping all the stones. And that was our test."

Video

Is Trading Stocks for Suckers?

If you think you’re smarter than the stock market, you’re probably either cheating or wrong

Video

I Spent Half My Life Making a Video Game

How a childhood hobby became a labor of love

Writers

Up
Down

More in Business

Just In