January 16, 2006

#197: The ever inventive Krugster...

P. Krugman

KRUGMAN TRUTH SQUAD

In First, Do More Harm (01/16/06) Paul Krugman makes another broadside attack on what is becoming the most successful part of the Bush health care initiative–Heath Savings Accounts “HSAs”. No wonder! As we have pointed out previously this at-first modest “under the radar” proposal has now snowballed into a system of financial accounts large enough to make grown liberals cry.

By letting people save, tax-free, in HSAs consumers can take more and more responsibility for their own health care decisions including how much to spend on what type of service or insurance. In time HSAs could wean the nation off our irrational employer-based health care system in which everyone is led to believe someone else is paying when, all the while, it is the employee, personally, paying through lower wages.

Krugman’s usual spiele on this is twofold: that 1) HSAs are only for the rich and 2) they drive the wealthy out of company insurance programs thereby weakening these programs for everyone else. Squad readers will not be surprised to hear (since we have said it before) that there is no evidence to support either of these claims.

So why are we bothering to write this report? Because the ever inventive Krugster has come up with a third reason to oppose HSAs:

“But the case of diabetes and other evidence suggest that a third problem with health savings accounts may be even more important: in practice, people who are forced to pay for medical care out of pocket don't have the ability to make good decisions about what care to purchase. "Consumer driven" is a nice slogan, but it turns out that buying health care isn't at all like buying clothing.”

This is really quite choice. It could go down as one version of “the liberal’s last words”:

We tried to help those fools, but they were too dumb to listen to us!

[The Truth Squad is a group of economists who have long marveled at the writings of Paul Krugman. The Squad Reports are synopses of their discussions. ]

Posted by John Weidner at January 16, 2006 10:47 AM
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