Conko letter in FT: “Nationalising healthcare flaws”

In today’s Financial Times, CEI Senior Fellow Gregory Conko responds to Clive Crook’s criticism of employer-sponsored health insurance.  Read the original here or see below.

Nationalising healthcare flaws

Published: July 17 2009 03:00 | Last updated: July 17 2009 03:00

From Mr Gregory Conko.

Sir, It is ironic that Clive Crook condemns employer-sponsored health insurance for encouraging over-consumption of medical services while simultaneously touting publicly provided or publicly subsidised universal healthcare coverage (“Two cheers for US health reform”, July 13).

It is true that the “link between consumer and cost is broken” when healthcare services are subsidised by one’s co-workers and when insurance premiums are paid largely by one’s employer. But why does Mr Crook imagine that link will be repaired when costs are subsidised by taxpayers and insurance “premiums” paid largely by government?

Of course there are flaws with a tax code that subsidises the purchase of health insurance and, worse still, only that purchased by employers. Among these is the incentive for over-consumption of arguably unnecessary health services. But, nationalising these flaws of subsidisation will exacerbate that problem, not correct it.

Gregory Conko,
Senior Fellow,
Competitive Enterprise Institute,
Washington, DC, US