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An Escherian Dilemma: Health Insurance Access or Health Care Cost?

Access to health insurance is an important problem, as is evident from one insurer's recent announcement that it would raise premiums by up to 39 percent. Improving access to insurance seems to have been the main focus of most health care reform legislation to date, but there is more to the story. According to the insurer that is proposing to raise its rates, the cost of medical equipment and services is the reason behind its proposed premium hike.

Given the dramatic increase in health care expenditures over the last several years, there is no doubt that limiting the growth rate of medical expenditures is extremely important to do. To see why, just take a look at some of the scariest sites on the internet: The Congressional Budget Office's Health page, and the Centers for Medicare and Medicaid Services National Health Expenditure Data page.

If you are not familiar with the CBO, it does some impressive and eye-opening work. If you are at all interested in how the government is proposing to spend your money, take some time to review the CBO's site. The site includes a number of interesting documents relating to health reform efforts, and CBO (thankfully) has the freedom to demystify some of the more confusing language. For example, in one analysis, the CBO notes that the Senate's health reform bill would actually increase the deficit, while nominally preserving the solvency of the "Health Insurance" (that is, Medicare Part A) "trust fund" that has been projected to be bankrupt by 2017.

So, which should be addressed first, access to insurance or the cost of health care itself? Like almost everything involving paying for health care, the only clear and simple answer is that there is no clear and simple answer: This is a chicken that hatches out of its own egg. Are there any M.C. Escher devotees who want to try their hand at drawing that?

(On another note, here are some interesting additional perspectives on what it would mean to repeal the antitrust exemption for health insurers. Although most of the experts in that article suggest that repealing the exemption would have little, if any effect on the health insurance market, there is only one surefire way to find out what it would do....)

© 2010 Alex M. Hendler. All Rights Reserved.

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