Paul Krugman offers a good run-down of the two major schools of thought on health care, and then concludes with his take on where Bush’s proposals are going:
Now here’s the thing: in the name of consumer-directed health care theory, Bush is proposing changes that would essentially encourage people to move into the individual market — which wastes a lot of money, and doesn’t and can’t work for those most in need — while undermining the employer-based system, which isn’t wonderful but is still essential. In particular, healthy high-income people would be encouraged to drop out of employment-based plans, leaving behind a sicker risk pool, driving up rates, and pushing employer-based care in the direction of an adverse selection death spiral. The plan we’re supposed to learn about tomorrow doesn’t sound big enough to have catastrophic effects, but it’s a step in the wrong direction.
I can’t get that worked up about Bush’s plans. I agree with Krugman and liberals everywhere that consumer-directed health care won’t work. But suppose it does? Well, that’d be a pleasant surprise. And if it doesn’t, it’ll be easier to build a rational universal system on the ashes of a wrecked employer-based system than it’ll be to cobble one together using employer-based health care as a foundation. On most topics, I think there’s very good reason to be skeptical of “things have to get worse before they get better” kind of thinking, but there are, I think, good reasons to make an exception on the health care front.