. . . Nugent should note something. He worries about [his niece] only in case [she] actually loses her job. If she voluntarily switches to another job, she’s fine. But that’s thanks to a regulation that allows people who maintain continuity of coverage to keep it notwithstanding adverse selection issues. And the only reason Nugent’s niece’s employer offers group health benefits at all is that large insurers receive massive tax subsidies to do so. The health insurance market mostly works for most people most of the time only because it already involves massive government intervention.Let's put this in perspective: The yearly cost of the employer tax subsidy is $177 billion. It is the single largest expenditure in the tax code.
A free market? Hardly. No more than the Veterans Administration, funded and run directly by the federal government. No more than Medicare, which insures millions. Employer provided health care would not exist without enormous government spending, supported by a thicket of regulations that make sure that you, working in your job, can't be denied coverage.
If you get health care in this country, you do so because the goverment has invested billions to pay for it. Want to see someone free riding on the federal dime? Look in the mirror. Look at a group of people who, having benefited from government subsidies of staggering size, work desperately to deny that right to others.
So what would a free market in health care look like? As Yglesias notes, it's just like insuring a car. You call up an insurer. They ask how sick you are. If you're unlucky enough to have a chronic conditions, your premiums skyrocket. If you're sick enough, they'll simply deny your coverage. That's it. No recourse, no subsidy. It's a nihilistic world out there.
But of course, if your auto insurer charges too much, you can take a bus. It's not so easy not to get sick. But then, thank God for Uncle Sam.
