Mark Thoma (Economist's View) and Andrew Samwick (Vox Baby) square off in the latest Wall Street Journal Online Econoblog.
Key quotes... Thoma:
Globalization will continue to motivate firms to eliminate these costs in any case. As social insurance is separated from the worker-firm relationship, government and individuals will be left to pick up the slack. Where I believe Andrew and I may differ is the degree to which this insurance ought to be provided by government rather than through individuals interacting in the private marketplace. There are substantial problems -- market failures -- in the private-sector provision of health and retirement insurance that are not easily overcome with market-based regulatory schemes.
Samwick...
...We do several things wrong in the way we provide health insurance to non-retirees, and our first tasks should be to undo these mistakes.
The first mistake is to make insurance voluntary when we don't subsequently exclude those who need care from getting it at the public's expense. We should make health insurance mandatory, but we should do so by putting the mandate on the individual, not the employer. Those who cannot provide proof of insurance on their tax returns should be charged an amount that corresponds to an insurance policy in their area. Implementing this on the tax form allows for family resources to be taken into consideration.
Curious about what the other mistakes are? You know what to do.
I really enjoyed reading this Econoblog, and I'll tell you why. Mark Thoma and Andrew Samwick do an outstanding job of showing the Wall Street Journal readers how economists can have a debate on a controversial subject like this. The reader can clearly identify the points of agreement and disagreement. Mark nails the question: How much social insurance should be provided by the government and how much should be provided by markets. They both note the market failures in health insurance. Samwick calls attention to the way the tax code distorts the private insurance market. By identifying the questions and highlighting specific economic issues of incentives, efficiency, and equity, they generate a lot of light and surprisingly little heat.
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