Few of us understand all our options when we shop for homeowners’ insurance.
The New York Times’s Paul Krugman riffed on this, arguing that “When people call for ‘consumer choice’ in health care, what this mainly comes down to isn’t comparison shopping on actual care . . . but rather comparison shopping on insurance policies. And that’s basically impossible even for home insurance, which is a lot simpler than medical insurance.”
Krugman calls a free market in medical insurance “fantasy.”
Yet the illusions involved in buying insurance also apply to non-market medical coverage.
Consider: Most people with low-price insurance like their coverage at least so long as they don’t have to make many claims against it. That’s because insurance is one of those things you buy hoping not to have an occasion to require it.
Something similar happens in single-payer medicine. Some Europeans (especially the young and healthy) praise their state systems that cost them next to nothing out of pocket, patching up their scrapes, mending their bones “for free.”
But wait till they are old and really sick, and on a multiple-month waiting list for an MRI or cancer treatment. Rationing-by-waiting can be a killer.
Bottom-line this: In a competitive insurance market, on learning of poor performance by your carrier, you can drop your insurer like a hot potato. In single-payer systems, you’re stuck. In line. Hoping not to get something too taxing on the system.
But you do have a choice in coffins.
This is Common Sense. I’m Paul Jacob.