July 31, 2009
— Ace The government has an easy, direct way to limit health care costs.
Price controls, Harry Waxman thinks.
What could go wrong? Price controls work so well as regards rents in the city. There are zero negative consequences, such as disincentives for anyone to build new units in order to meet demand. Nor an incentive for landlords to let their properties fall into disrepair.
Paul Krugman had a column, long ago. The point was that no one asks economists about things they actually know about. They ask them about sort of speculative things where they only have guesses, but they never ask about things economists know to be true.
His example of something economists know to be true? Rent price controls make housing scarcer and less affordable.
Don't expect him to revisit that essay any time soon.
Democrats sought to limit increases in the cost of insurance sold under a sweeping health care bill Friday as they labored to clear the final obstacle to a September showdown on President Barack Obama's top domestic priority.
Several officials said a last-minute agreement among Democrats on the Energy and Commerce Committee also included authority for the federal government to negotiate directly with pharmaceutical companies for lower drug prices under Medicare.
The changes were part of an intensive effort Democrats have made in recent days to satisfy the conflicting demands of liberals and conservatives on the panel. "We have agreed we need to pull together," said Rep. Henry Waxman, D-Calif., the committee chairman. He said he hoped for a vote by early evening.
Several officials said the cost of insurance to be sold widely under the bill could not rise by more than 4 percent a year unless the government approves.
The White House declined to state a position on the changes.
Rationing, again. If insurance costs a lot of money, you can reduce that cost by government fiat, but have no illusions: Service provided will be cut too.
Again I note the phatasmagorical strangeness of all this: People's primary beef with health insurance is that health insurance doesn't cover enough. People go bananas with their insurer or HMO denies them coverage for this or that.
With good reason-- unfair surprise, in many cases.
And the Democrats' response to this state of affairs is to reduce covered services still further.
Thanks to AHFF Geoff again.
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