By Robert
Reich
The best argument for a single-payer health plan is the recent
decision by giant health insurer Aetna to bail out next year from 11 of the 15
states where it sells Obamacare plans.
Aetna’s
decision follows similar moves by UnitedHealth Group, the nation’s largest
insurer, and Humana, one of the other giants.
All
claim they’re not making enough money because too many people with serious
health problems are using the Obamacare exchanges, and not enough healthy
people are signing up.
The
problem isn’t Obamacare per se.
It’s in the structure of private markets for health insurance – which creates
powerful incentives to avoid sick people and attract healthy ones. Obamacare is
just making the structural problem more obvious.
In
a nutshell, the more sick people and the fewer healthy people a private
for-profit insurer attracts, the less competitive that insurer becomes relative
to other insurers that don’t attract as high a percentage of the sick but a
higher percentage of the healthy.
Eventually, insurers that take in too many sick and too few healthy people are driven out of business.
If
insurers had no idea who’d be sick and who’d be healthy when they sign up for
insurance (and keep them insured at the same price even after they become
sick), this wouldn’t be a problem.
But they do know – and they’re developing more and more
sophisticated ways of finding out.
It’s
not just people with pre-existing conditions who have caused insurers to run
for the happy hills of healthy customers.
It’s also people with genetic predispositions toward
certain illnesses that are expensive to treat, like heart disease and cancer.
And people who don’t exercise enough, or have unhealthy habits, or live in
unhealthy places.
So
health insurers spend lots of time, effort, and money trying to attract people
who have high odds of staying healthy (the young and the fit) while doing
whatever they can to fend off those who have high odds of getting sick (the
older, infirm, and the unfit).
As
a result we end up with the most bizarre health-insurance system imaginable:
One ever more carefully designed to avoid sick people.
If
this weren’t enough to convince rational people to do what most other advanced
nations have done and create a single-payer system, consider that America’s
giant health insurers are now busily consolidating into ever-larger behemoths.
UnitedHealth is already humongous. Aetna, meanwhile, is trying to buy Humana.
Insurers
say they’re doing this in order to reap economies of scale, but there’s little
evidence that large size generates cost savings.
In
reality, they’re becoming very big to get more bargaining leverage over
everyone they do business with – hospitals, doctors, employers, the government,
and consumers. That way they make even bigger profits.
But
these bigger profits come at the expense of hospitals, doctors, employers, the
government, and, ultimately, taxpayers and consumers.
So
the real choice in the future is becoming clear. Obamacare is only smoking it
out. One alternative is a public single-payer system. The other is a
hugely-expensive for-profit oligopoly with the market power to charge high
prices even to healthy people – and to charge sick people (or those likely to
be sick) an arm and a leg.
ROBERT B. REICH is Chancellor's Professor of Public Policy at
the University of California at Berkeley and Senior Fellow at the Blum Center
for Developing Economies. He served as Secretary of Labor in the Clinton
administration, for which Time Magazine named him one of the ten most effective
cabinet secretaries of the twentieth century. He has written fourteen books,
including the best sellers "Aftershock", "The Work of
Nations," and"Beyond Outrage," and, his most recent,
"Saving Capitalism." He is also a founding editor of the American
Prospect magazine, chairman of Common Cause, a member of the American Academy
of Arts and Sciences, and co-creator of the award-winning documentary,
INEQUALITY FOR ALL.
