With the election of Barack Obama, there is a lot of hope and optimism about the potential for health care reform.
There is also some nervousness.
The nervousness originates from those who think that the current economic crises will inhibit reform efforts. That somehow the price tag of reform will scare people away from health care reform. I am encouraged by an insightful article by Ezra Klein on Obama’s choice of Director of the Office of Management and Budget.
According to Klein, Peter Orszag believes that health care reform is the key to the fiscal future. Since it his office that will pin the price tag on any health care proposal, his biases matter.
Others are worried that Obama might be soft on insurance companies.
I am not a great friend of the insurance companies. I deal with them every day. But neither am I a knee-jerk opponent of insurance companies.
Insurance companies reflect the markets they operate in. And health insurance companies function in a market that brings out their worst qualites.
Unlike home insurance, or auto insurance, there is no legal or market mandate to have health insurance. This allows health insurance companies to avoid insuring the very people that need it the most – high risk (read sick) individuals.
Outside of the Medicare supplemental insurance market, there are very few limitations on what should be covered or not covered in a health insurance plan. This gives insurance companies the license to put restrictions and exclusions in their policies as they, or their customers, see fit.