Saturday, February 12, 2005

California Health Care Proposal

Also a bad idea:

• Require citizens and legal residents of California to purchase basic health insurance, maintaining at least a catastrophic policy with a maximum $5,000 deductible. Californians would be required to submit proof of coverage with their state tax returns.(emphasis added)

Putting the health care mandate on the consumer is pretty harsh. There would have to be some kind of enforcement mechanism, which means either fines or criminal sanctions. Is it really a good idea to punish someone who is too poor or incompetent to obtain health insurance? I'm a highly educated person, and I have a hard time buying an insurance policy. They're very complicated with different deductibles, services covered, policy limits, and premium levels.

However, increasing the knowledge and accountability of health care consumers is a good idea, since we could save quite a bit of money if people focused more on preventing illness and less on treating it. Threats of criminal prosecution or fines for individual failure to prove insurance would be less effective than an incentive program for savvy health care consumers.

Finally, and most seriously, the mandate will tend to force people into individual insurance policies. While the article makes some reference to "purchasing pools," such pools are usually subject to the adverse selection problem.


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