Gov. Peter Shumlin launched his re-election campaign on a positive note, saying he would say nothing negative about his opponent, Republican Randy Brock.
But Shumlin was happy to trash Brock’s proposals on health care, which, according to the governor, would reverse the state’s considerable progress and hand over Vermonters’ well-being to the self-interested clutches of insurance companies.
Brock has unveiled a health care proposal that emphasizes the role of the marketplace in health care. In Brock’s view, introducing greater competitiveness into health care would force insurance companies to contain costs and try to outdo each other in winning over customers. One way he would do this would be to revise Vermont’s law on “community rating.”
Vermont enacted a community rating law in 1991 to prevent insurance companies from charging higher rates for those more likely to become sick, such as the elderly. Healthy young people, who are less likely to need health care, could be charged lower rates.
Brock asserts that one result of community rating is that young people are forced to subsidize the insurance of the elderly, who are often better off economically.
A better way to say it is that under community rating the healthy subsidize the sick. And that is precisely the purpose of any form of insurance system or public service. We have learned that illness, when it hits, is too expensive for individuals to afford, so it makes sense to pool our resources so that money is there for that small segment of the population that, at any given moment, needs health care.
Brock says health insurance should be subjected to competition, like Costco selling televisions. But health care is not like an ordinary consumer product. We buy a television because we choose to, and ordinarily, we have time to go from store to store to find the best price or to choose the model we prefer.
We don’t choose to have a heart attack, and when it happens we are not likely to shop around for the hospital with the cheapest rate or to give job interviews to cardiologists. Health care is less like a consumer purchase than a public service. It is like fire protection or public education. We subsidize the fire department through our taxes, though only a small percentage of us is ever going to need its services. We pay for it because we want it to be there in case we need it.
Eventually we all need health care, and it makes sense to establish a system that allows us to receive the care we need without bankrupting us. That is why President Obama’s program includes a mandate for purchasing health insurance. Young healthy people who might be inclined not to chip in to the system by foregoing insurance will be forced to chip in. That is the only way to make the system affordable for everyone. And even that young person might break his leg on the ski slope or become ill, unpredictably.
Another way ordinary marketplace economics don’t apply to health insurance is that insurance companies make their money not by providing a service, but by denying service. When we buy a television, there is no loophole that says that maybe the company won’t deliver the television after all. Yet loopholes and exclusions in health insurance allow companies to game the system, taking our premiums but finding ways not to cover our needs.
In advancing a market-oriented health care plan, Brock is running against history. Shumlin’s health care train has left the station, and it would be surprising if voters thought we ought to reverse course and try the market approach from which we have been trying to extricate ourselves for many years. Brock is offering an alternative to Shumlin’s approach, which is the purpose of political opposition. But it is an alternative the state of Vermont, through its Legislature and governor, has already rejected.