I wrote the original post over a year ago thinking that the bizarrely dated later I received would be the end of my involvement with Massachusett’s health insurance program. Ha, ha…
A few months later, I received a strange letter in the mail from the state. I’ve become accustomed to such correspondence over the past couple of years, particularly regarding unemployment or healthcare benefits, but this most recent letter surprised me – it was a check, and for more than an insignificant sum. Apparently, the state had reviewed some recent records and discovered that I had been overcharged for my health insurance coverage. The amount on the check was the exact amount I used to pay monthly for my premium.
There is a lot of talk about the future of health insurance and most of this talk involves how the government might increase its involvement. On the surface, you might think this experience would inform my view a little bit – who would want the government involved in health insurance when my experience with state-run insurance exposed me to hours of admin, inexplicable billing practices, and months of delays to return my money (even though I always paid ten days in advance of the coming month)? Well, I say – is that any different from life with a private insurer? I argue that state government is perfectly qualified to generate endless admin, develop nonsensical billing structures, and lose track of my money. They are, in short, more than prepared to take over these roles from private insurers because they already do it so well for everything else. Based on my refund check, I imagine applying this expertise to health insurance would be a breeze.
My serious argument for getting the government involved in health insurance isn’t that government would be good at it – it’s that our private insurers are clearly terrible at it. Or perhaps I should say, it seems like the market is working exactly as designed by private insurers – profit maximization is prioritized ahead of public good. Whether it’s the way our most vulnerable struggle to buy private coverage or how the average American pays far more for health insurance than our European counterparts, to me what I see when I dig into the workings of private insurance is a thinly veiled oligopoly. What other name is there for a group of firms that maintain an artificially high market price by restricting supply and erecting high barriers to entry?
The results are in – private insurance has failed all but the industry’s richest employees. The great thing is that this is a market failure and therefore easy to correct. We just need to drag the government into the industry and let it do what it does best – almost nothing, and very slowly. But its sheer size will help stabilize a floundering industry and drive all but the fittest private insurers into bankruptcy. This will buy time for us to determine the best way private insurers fit into the future of the uniquely challenging American health insurance market without forcing taxpayers to risk their health for what would otherwise be a rushed experiment.
