The cost of health coverage

Ezra Klein speaks for me, particularly the final paragraph ...

The first is that it's fractured among thousands of plans and competitors and business arrangements, and that fracturing is inefficient. Medicare negotiates better rates because Medicare has a large customer base, giving it power in those negotiations. An insurer covering a bunch of small businesses in Iowa does not.

The second is that the insurance market is broadly parasitic on the employer-based market, which as I've argued before, allows everyone to pass costs onto someone else and tricks individuals into thinking they're getting a good deal when they're really getting a terrible deal.

The answer to these problems, at least to my way of thinking, is not so much the public plan (though I think it would be a good inclusion) but the health insurance exchanges. And I do talk about them. Often. Loudly. In all different ways.

Expanding the exchanges is where insurers — both public and private — get the size for administrative efficiency and negotiated discounts. Expanding the exchanges moves us towards a system where people see how much of their money is being spent on health care and thus understand the need for cost control and the damage being done by the status quo. Expanding the exchange is even the key to a strong public plan, because the public plan is nothing without a large customer base to give it strength.

Obviously, I can't do much about how this post will be read. Marci wrote earlier that I'm engaged in "a struggle to talk about how cool insurance companies are," and my hunch is this will be filed in that category. For what it's worth, I don't think the private insurance industry should exist. But I don't think that fight will be won anytime soon, and at this point, I don't think assaulting the industry is the key to getting health-care reform right.