Charlotte McClure

TC 302

Professor Walker

March 24, 2011

Healthcare

In an infamously consumerist society, the surprising phenomenon of gaps in health

care coverage seems incongruous and ridiculous. Insurance companies, above all else, sell

a product. Why do they not treat their customers as what they are – paying, powerful

customers? When did the power shift from the health-conscious consumer to the

insurance company, and how do we get it back? (If we ever held the power at all) .

Perhaps the problem lies in our dedication to the idea of “moral hazard” as it

relates to health insurance. Princeton economist Uwe Reinhardt believes that “moral

hazard is overblown” because we do not consume health insurance in the same way that

we consume other goods.1 Moral hazard, the belief that having insurance “can change the

behavior of the person being insured,” cripples policy-makers by forcing assumptions

about insurance consumption that may not be true.2 In this age of information, these

hollow assumptions should not stand. Many, however, award the idea of moral hazard a

1
Gladwell, Malcolm. "The Moral-Hazard Myth." The New Yorker 29 Aug. 2005: 3.
2
Gladwell, 3.

1
legitimacy which it does not deserve. The consumer pool for health insurance differs from

other consumer groups in its vastness and universality – everyone needs healthcare .

Whether or not they know it by name, it seems that the moral hazard mindset

pervades common considerations of the healthcare challenge . Why are consumers so

charmed by an idea which ultimately hurts them? An even more fundamental question: do

the American people actually want universal healthcare? And if not, why? What are the

economic fears attached to the creation of a universal healthcare system in America?

Although millions are currently uninsured, millions more who do have coverage would

rather maintain the status quo because of their own economic fears . Many conservatives

rail against a public option, but would this be such a bad thing? There are many possible

solutions for ensuring universal healthcare, and several models exist for examination .

What are the benefits and disadvantages of a public option, what does the health care

reform currently provide for, and, perhaps of equal importance, what does the public

think about it all?

There seems to be a general backlash against a public option, especially coming

from the political right. Those who advocate a government-run insurance option may be

viewed as socialist, idealistic, or just plain naïve. Why the resistance? In countries where

universal healthcare exists, such as France and Germany, the government provides for

varying degrees of controls, as well as for insurance products themselves . A public option

may not be the socialist devil many imagine it to be. With that said, universal healthcare

in itself cannot avoid the socialist label. But does that matter?

2
 There are over 50 million Americans without health insurance .3 Relatively healthy

people still have quotidian health care issues; left untreated, these minor problems can

escalate into major problems which not only lead to unnecessary loss of life and lower

quality of life, but also result in economic losses . A person without health insurance who

seeks treatment for a chronic illness puts a burden on the healthcare industry by not

being able to pay. Sick workers earn less by putting in fewer hours and at lower

productivity, detracting from potential GDP. Granted, the cost of a public option (and of

existing provisions in health care reform) would most likely exceed the money saved by

reducing these burdens, but it does help lessen the sting . What lies behind resistance to a

public option? For some, it is the fear that such a provision would increase current costs .

For others, the fear alone of “big government” is enough to hamper support . Whatever the

reason, those opposed to a public healthcare option have succeeded – for now .

In the days leading up to its inception, many speculated over the possibility of a

public option. The passing of the bill, however, proved to be a loss for public option

proponents. Several systems exist in which such an option works to provide universal

healthcare. France and Germany are notable examples. In France, “everyone has access to

the same basic coverage through national insurance funds, to which every employer and

3
Galewitz, Phil, and Andrew Villegas. "Number of Uninsured Americans Hits
Record High - Health - Health Care - Msnbc.com." Breaking News, Weather,
Business, Health, Entertainment, Sports, Politics, Travel, Science, Technology,
Local, US & World News- Msnbc.com. Web. 30 Mar. 2011.
<http://www.msnbc.msn.com/id/39215770/ns/health-health_care/>.

3
employee contributes.”4 When a person cannot get coverage due to unemployment, the

French government foots the bill. The system is similar to our Medicare, only expanded to

include the entire population, and it seems to work pretty well . Interestingly, “Americans

with Medicare report themselves to be happier with virtually every aspect of their

insurance coverage than people with private insurance .”5 So why the stigma attached to

such a system? Again, people fear rising costs. A fundamental difference exists between

France and America. In France, there is a “widely held value that the healthy should pay

for care of the sick,” while in America, we have a much less socialist worldview .6 There,

cost is secondary to social obligations; here, personal cost is of primary concern.

In observing the differences between the public option in France and our lack of a

public option, one thing becomes clear: it all comes down to a question of whether

healthcare is a privilege or a right. French culture dictates that citizens take care of one

another. Healthcare is a right, not a privilege. Here, however, the opposite mindset

prevails. With a public option shot down by politicians who perhaps have put too much

faith in the concept of moral hazard, healthcare reform, despite many useful provisions,

remains incomplete.

4
"The French Lesson In Health Care." Businessweek - Business News, Stock Market
& Financial Advice. Web. 30 Mar. 2011.
<http://www.businessweek.com/magazine/content/07_28/b4042070.htm>.
5
Gladwell, 5.
6
"The French Lesson In Health Care."