Paul Krugman accuses Republicans of “intellectual bankruptcy” for wanting to make tax-breaks on insurance available to everyone, not just businesses who provide insurance to their employees. Krugman writes:
It’s always helpful here to keep your eye on the problem of Americans with preexisting conditions. That’s the best starting point for understanding why Obamacare has to look the way it does; it’s also often the best way to see what’s wrong with alleged Republican solutions.
So, ask the following question: how is it that many Americans with preexisting conditions have health insurance now? The immediate answer is, they get it from their employers. But why do employers do that? Well, employment-based health insurance is tax-advantaged: it’s a benefit employers can provide that isn’t counted as taxable income, which makes it better, in some cases, than offering higher wages instead.
His argument goes on from there, but we don’t need to look at it, since it is premised on a fallacy. He asks the wrong question. The question is not “how is it that many Americans with preexisting conditions have health insurance now?” The question is, “How is it that so many Americans with preexisting conditions don’t have health insurance”? And the answer to that illustrates Krugman’s own intellectual bankruptcy, since what has greatly exacerbated this problem in the first place is the government’s policy of subsidizing employer-provided insurance.
But instead of just ending the perverse incentive that has made this such a massive problem, Krugman would have the government just pass even new legislation to ostensibly “solve” the problems created by the old legislation, which was passed in order to “solve” the problems created by even older legislation, and so on.
