Professor Jacobsen on Son of Healthcare, the Latest Obama Plan

by Little Miss Attila on February 23, 2010

“Balloon mortgage.” Yes. Dr. Jacobsen explains:

There are no market mechanisms to encourage consumers to price shop or to introduce price competition into the health care industry.

To the contrary, the plan continues the trend towards divorcing consumers from price decisions as to services and products; there also is no incentive to decrease demand because a large percentage of the population will receive government subsidies.

Yet because of the new insurance price control mechanism, the private insurance system will not be allowed to recoup the costs of such coverage.

This is a balloon which must burst, and it will several years down the road.

That’s it. Except, of course, for the “which” that should be a “that”—but a lot of people have problems with it. Lawyers in particular seem vulnerable to that particular difficulty.

Via Glenn Reynolds, whose grammar is generally top-notch.

{ 1 comment… read it below or add one }

John February 23, 2010 at 2:19 pm

It is stunning how clear the road forward becomes when the principles of supply, demand, and price are applied to the problem.

All government-driven solutions–ours, Canada’s, Britain’s, and Cuba’s–operate by increasing demand (ie., giving patients more ability to pay), reducing supply (not intentionally, but government-managed health care does make life suck for the provider).

The same applies to oil prices as well. Right now zoning laws make it very expensive to live close to work, so people have to economize with ever-longer commutes, resulting in increased demand for gasoline. Nobody to the left of the Tea Party wants to expand supply in any meaningful way, so that is driving prices up as well.

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