Thursday, May 22, 2008

Florida legalizes cheap healthcare

Both houses of the Florida legislature have passed a bill allowing for the creation of bare-bones healthcare plans, which begs the question: why in the hell wasn't this allowed before?? The key provision in the bill is one that allows insurance providers to make available plans that don't cover the whole battery of possible ailments: "To make the policies affordable, Florida will allow insurers to offer policies that do not include many of the 52 services that standard policies must currently cover, like acupuncture and podiatry." The goal is that these plans will sell for under $150/month.

Of course, that doesn't mean regulators and legislators sat on their hands and are going to let these insurance companies sell any plan they want to anyone who's willing to buy it. The plans will still have to cover "preventive services, office visits, screenings, surgery, prescription drugs, durable medical equipment and diabetes supplies," and companies are not allowed to discriminate in their offerings with regards to health and age. In addition, the plans will only be available to Floridians who have been uninsured for six months and are not eligible for public insurance – because, God forbid, we wouldn't want poor people voluntarily going off the public dole and engaging in voluntary commerce!

According to the NYT article, this idea has been tried in a handful of states, but the plans haven't proven very popular with consumers. Sherry Glied at Columbia says that people "are only somewhat responsive to the price of health insurance," but I think a more accurate statement would be that people are only somewhat responsive to price under current conditions. Health insurance – especially for things other than accidents and uncommon health problems – might very well not even exist if medicine and healthcare were left up to the market, given that healthcare isn't something that one would normally expect to be paid for through insurance. It's rarely totally unexpected, it's often recurring (diabetes medication, for example), and most interactions with healthcare professionals are for rather mundane and easily diagnosable and treatable ailments.

It's a wonder that pundits still claim that America has a free-market healthcare system when the government serves 45% of the market, with the rest still heavily regulated.

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