But it also still seems worth understanding the terms in which the thing has gone down. And in that respect, Princeton economics professor Uwe E. Reinhardt's discussion of "community rating" in a New York Times blog post casts an interesting light on the premises behind the "reform."
Reinhardt defines "community rating" --the system of setting premiums that the coming law will order insurance companies to practice for persons mandated to buy insurance outside the employer-based system -- as
That is, if the insurance companies had their profit-driven drothers, they'd charge people who weren't likely to get sick a small enough premium that these folks would still bother to buy insurance and charge people who were likely to get sick a vastly higher premium that deterred them from getting insurance at all, or at least covered most of what the insurers would have to pay out for them. Or maybe they just would refuse to insure people who were likely to get sick. That's a fair description of where we are now. By forcing everyone to buy insurance and forcing insurers to sell to people they'd rather deny outright, the "reform" throws those two populations in together (at least in the individual markets to be called exchanges).
Reinhardt points out, realistically, that young healthy people may very well think the new system "unfair" because they'll be ordered to buy policies whose cost includes a portion of the costs for sick people who wouldn't have insurance at all if insurers were allowed (as they are now, without much limit) to set premiums based on the expected health care costs of individuals. He offers a simplified mathematical model to illustrate how things will work under community rating:
Reinhardt is wonderfully clear and I urge readers to look at his post.
But all this is not really a question of economics, but of politics and values. The enormously complicated "reform" is only complicated because, as a society, we have failed to answer the question: is it the duty of a rich nation to ensure that people within its borders have access to health care? If we answer that "yes," as every wealthy nation except the United States does, then of course all citizens share the risk of the costs of illnesses -- through taxes. Taxes are the price of community. Complicated calculations of premiums don't ever come into the discussion.
If we have to build complex contraptions that pay off the greedy who profit from human misery, the United States is a sorry excuse for a community. The health care reform process so far has made it clear that we are, indeed, a broken society which has lost touch with human beings' essential interdependence.