Paul Krugman’s Health Care Fantasies

Conn Carroll / July 31, 2009

Paul Krugman just can’t stop spreading misinformation about Medicare and health insurance. Today he writes:

In the individual insurance market, where people buy insurance directly rather than getting it through their employers, so much money goes into underwriting and other expenses that only around 70 cents of each premium dollar actually goes to care.

This is just plain deceptive. The latest government figures available, from 2007 (see Table 12), show that 87.8 cents of every private health insurance premium dollar went to personal health care bills. And that remaining 12.2 cents? In addition to underwriting, administration, advertising, and (gasp!) profit, that 12.2 figure also includes some patient care that insurance companies provided themselves, like disease management and on-call toll-free nurse consultations. Krugman continues: (more…)