Thursday, 31 December 2009

Latest Public Option Concession Comes Into Focus
What do we lose with state-based exchanges?
1) buying power, to get costs down
2) government jobs, to run each state exchange
3) political patronage, appointing friends to state insurance commissions
       However, there is a compromise that solves all 3: have state-based exchanges but allow people to buy insurance out of state (on any state exchange). As people flock to the best value-for-money insurers, larger pools can spread risk better and bring costs down. Since no government or bureaucracy ever reduces staff just because work load goes down, state government jobs and patronage will be unchanged.

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