A good first step in health care reform

Marketplace Staff Jan 15, 2010
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A good first step in health care reform

Marketplace Staff Jan 15, 2010
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Chris Farrell: Reform was never going to be easy. Not with health care amounting to 15 percent of the U.S. economy.

TESS VIGELAND: Marketplace Money economics editor Chris Farrell.


Farrell: There are too many competing interests and too much money at stake. The odds makers didn’t give it a chance. The U.S. has flirted with some kind of national health policy six previous times over the past 100 years, only to see the reform impulse wither each time.

So, here’s why I’m cheering the health care bill that’s emerged so far. It’s much better than the existing system. Period.

The private insurance industry will abandon the practice of imposing preexisting conditions on customers. Sure, they’ll get millions of new customers and billions in new revenue in return. But if you have health insurance now you don’t need to worry about losing it, and if you don’t have health insurance, you’ll get covered.

Health care reform would mark the end of a long erosion in America’s social safety net. Think about it: Our pensions — those lucky enough to have one — are less secure than they used to be. Our unemployment insurance system is strained. I can go on, but you get the point.

That’s why if the president has the opportunity to sign health care reform into law it will be the most significant improvement in America’s safety net since Social Security in 1935 and Medicare in 1965.

But I’m going to go out even farther on a forecasting limb. It’s underappreciated by most commentators, but universal coverage could end up boosting entrepreneurship in America. Thanks to health care reform we could see a supply side revolution in new business creation over time.

Up till now, health insurance has been much too costly while offering far too little coverage for anyone who can’t get insurance through an employer. Health reform will remove this major obstacle. Health care legislation could also get rid of “job lock.” That’s when folks stay at a job they can’t stand, because they need to keep their family insured.

Yes, the reform effort could still falter. So I can’t break out the champagne. But I’ve got it chilling in the ‘fridge.

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