Lunchtime Must-Read: Richard Mayhew: Brad Delong Smackdown Watch

Richard Mayhew: Brad Delong Smackdown Watch “Brad Delong… is getting one thing significantly wrong…. Recently, I wrote about AIDS medications and Gresham’s Law applying to health insurance… the first salvo of the ‘brainpower health insurance companies devoted to gaming the system’ as it is the most obvious target to create policies that are amazingly ugly to people with chronic, expensive conditions…. We’re seeing this with AIDS/HIV patients for two reasons. The first is that this is a population with known high costs that insurers really want to avoid. Secondly, there is a significant network of very effective advocates who are able to identify this as a business strategy of some insurers and scream about it. I would be shocked if other very high cost but very small population diseases are not being ‘top-tiered/specialty tier for generics’ as a risk avoidance strategies, but I have not heard about them. The policy solution is simple, engage in a regulatory arms race to force insurance companies to compete on providing health coverage and health improvement instead of cherry picking good risk and off-loading bad risk to competitors and/or government programs. This will work in most Blue states and some Red states…”