Analysis: Why the free market should not be relied upon to deliver HC in the same way that it is relied upon to deliver most goods and services

".....the fact is that the free market doesn't work for health insurance, and never did. All we ever had was a patchwork, semiprivate system supported by large government subsidies. That system is now failing."

From covertheuninsuredweek.com :

In one of an ongoing series of columns about the nation's health care crisis, New York Times columnist Paul Krugman explains why the free market should not be relied upon to deliver health care in the same way that it is relied upon to deliver most goods and services. He offers three reasons: risk, selection and social justice.

He points out that 5 percent of Americans were responsible for almost half of U.S. health care costs, meaning their expenses without good insurance would be "crushing."

To avoid insuring those who are going to cost them this much, insurance companies spend a lot of administrative costs on "adverse selection"—insuring those who are good risks for the companies, rather than providing a standard policy to all comers.

"Private insurance companies spend large sums not on providing medical care, but on denying insurance to those who need it most," Krugman writes. But because Americans believe in social justice, some of those unable to get private coverage are eligible for Medicaid, while others receive costly "uncompensated" care in emergency rooms and hospitals. This is a cost passed back to taxpayers.

Krugman concludes by noting that he is hardly an opponent of markets, but "the fact is that the free market doesn't work for health insurance, and never did. All we ever had was a patchwork, semiprivate system supported by large government subsidies. That system is now failing."