And the ever-alert Don Boudreaux nails him on it. Read Don’s letter to the New York Times in response to the latest Krugman propaganda piece:
Editor, The New York Times
620 Eighth Avenue
New York, NY 10018
To the Editor:
Paul Krugman alleges that “private markets for health insurance, left to their
own devices, work very badly” (“Health Care Realities,” July 31). Apart from
anecdotes about patients with acne and broken hearts being denied coverage, his
only evidence for his claim is that “only around 70 cents of each premium dollar
actually goes to care.”
So what if unsubsidized private insurers spend 30 cents on the dollar to supply
coverage if that coverage is good? I offer here real-world evidence from family
friends that unsubsidized coverage is not only readily available but also is
better than the government-subsidized and regulated coverage.
My friends, a couple in their mid- and late 40s, own a small business and have
two young children. They purchase unsubsidized private health insurance ?
directly from the insurer ? for a monthly premium of $212. Their policy has an
annual deductible of $10,000. This means that their MAXIMUM annual
out-of-pocket medical expenses are $12,544.
Sounds like a lot? My family and I (about the same age as my friends, but with
only one young child) get our health insurance through my employer (so it’s
tax-deductible and subject to more government regulations of the sort that Mr.
Krugman asserts are necessary to make private insurance work). For coverage
with a $25 deductible per medical event, we pay out-of-pocket a monthly premium
of $144, while my employer kicks in monthly $974. So the MINIMUM amount spent
annually to supply my family with health coverage is $13,416 ? nearly $1,000
more than the purely private coverage that allegedly “works very badly” compared
to the government subsidized and regulated variety.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
