Saturday, February 20, 2010

Silver lining -- the good news about outrageously escalating health insurance prices

The outrageous individual health insurance price increases by Wellpoint subsidiary Anthem in California -- as high as 39% in some cases -- are shaking up the politics of healthcare reform. The free market seems to be demonstrating more effectively than it's critics ever could that it simply can't cope with providing a basic human right like healthcare.

Paul Krugman comments on the California mess, which is simply the same situation faced by the rest of America writ large.
Why the huge increase? It’s not profiteering, says WellPoint, which claims instead (without using the term) that it’s facing a classic insurance death spiral.
This may be good news. At the rate they're going with their outrageous price increases, the big insurance companies really are locking themselves into a classic death spiral -- the more they charge, the more people drop out, leaving only the sickest policyholders who can't afford to cancel no matter what the price, driving up costs further, raising prices more, in an endless feedback loop that is rapidly escalating. Soon there won't be anything left.

Hard to imagine what we can do when that happens except to start over with universal coverage and a public option -- at least if doctors, other medical providers and hospitals ever hope to get paid.

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