Healthcare Reform: The Day After

October 27, 2009

Paul Krugman takes a look at the impact of  healthcare reform:

Like the bill that will probably emerge from Congress, the Massachusetts reform mainly relies on a combination of regulation and subsidies to chivy a mostly private system into providing near-universal coverage. It is, to be frank, a bit of a Rube Goldberg device — a complicated way of achieving something that could have been done much more simply with a Medicare-type program. Yet it has gone a long way toward achieving the goal of health insurance for all, although it’s not quite there: according to state estimates, only 2.6 percent of residents remain uninsured.

There are, of course, major problems remaining in Massachusetts. In particular, while employers are required to provide a minimum standard of coverage, in a number of cases this standard seems to be too low, with lower-income workers still unable to afford necessary care. And the Massachusetts plan hasn’t yet done anything significant to contain costs.

Me: What? What was that last part? Oh, right. ObamaCare probably won’t do much to stop the explosive rise in healthcare costs. Indeed, the Massachusetts plan didn’t really try to reign in healthcare costs, putting the carrot in front of the stick. So now the system is running out of money, forcing service cuts. Some might even call that rationing. ObamaCare creates the illusion of cost control, but likely will be more carrot than stick in practice.

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CBO reports that the House health reform bill will reduce the budget deficit by $100 billion over the next ten years. That sounds like cost containment to me.

Posted by Kirk | Report as abusive