Think Freely Media presents Common Sense with Paul Jacob

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.

By: Redactor


  1. Bronson says:

    What exactly can Krugman base that opinion on? We haven’t had a real free market in health insurance since the 1940s when government first started subsidizing premiums with tax deductions. Of course he is an advocate of Keynesian policy that was in full implementation at that time.

    We have a mixed market with lack of pricing information and distortions in buying decisions by the public, and continued expansion of governments role; increasing cost with the resulting demand for them to fix it.

    Some advocate tax reform with continued tax subsidies to health insurance/care. That leads right back to where we are. Those subsidies like all of them needs to end.

  2. Drik says:

    Being an expert in one area in no way qualifies one to make any useful assessments of any other area. Like George Clooney’s evaluation of the oil industry, or Rosie O’Donnell’s evaluation of political trends, or Joy Behar’s opinion of pretty much anything, Klugman is a supposed expert in a branch of economics. Not necessarily able to come up with anything useful on insurance or politics.

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  7. MoreFreedom says:

    I suspect Krugman is simply an opportunist that sees he can get a good paying job by catering to statist politicians, and generating columns/articles that push for more government and less freedom.

    Krugman refers to an article states that you can’t find out the details of a homeowner’s insurance policy prior to purchasing it. That’s not been my experience.

    Just wait until Obamacare is fully implemented. Then I doubt anyone will know what’s covered and what isn’t (and everyone will think everything is covered – if that’s the case, you can expect insurance rates to skyrocket).

    Krugman would recommend an Obamacare style solution. You will be FORCED to by insurance that is government approved and meets government requirements. And the insurance companies will help make sure that if you live on a mountain, you need to buy flood and hurricane insurance. And If you live in Maine, you need insurance that covers tornados.

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