Keeping the Bribe Reasonable

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I guess I thought this was fairly obvious, but maybe not.  Here’s libertarian Alex Tabarrok offering a defense of including a public option as part of any healthcare reform:

If insurance companies must take all customers regardless of pre-existing conditions it is obvious that sooner or later and probably sooner the government will require that everyone purchase health insurance.

In short, insurance reform will mean that everyone will be required to buy a product that will be tightly regulated and more homogeneous.  Both of these factors will increase the market power of insurance firms.  Since escape via non-purchase will no longer be a potential response to higher prices, mandatory purchase will reduce the elasticity of demand giving firms an incentive to increase prices.

….It’s true that mandatory purchase doesn’t necessarily lead to market power, auto insurance is quite competitive.  Nevertheless, given the potential of insurance reform to increase the market power of insurance firms the search for some disciplining device like the public option is reasonable.

The healthcare bills currently on the table are huge windfalls for insurance companies.  That’s why the industry supports them.  It gives them more power and it ensures them more customers.  Liberals who back this approach are basically doing it because we figure that’s just the way the world works: if you want the support of a big, powerful player, you have to bribe them.  And that’s what we’re doing.

But yes: if we’re doing this, a “disciplining device” that gives customers a greater choice of insurance options is indeed reasonable.  Even from a conservative point of view, it’s reasonable.  There’s a limit to just how big the bribe should be.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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