Paul Krugman: Keeping Them Honest

"I appreciate your efforts, and look forward to working with you so that the Congress can complete health care reform by October.” So declared President Obama in a letter this week to Senators Max Baucus and Edward Kennedy. The big health care push is officially on.

But the devil is in the details. Health reform will fail unless we get serious cost control — and we won’t get that kind of control unless we fundamentally change the way the insurance industry, in particular, behaves. So let me offer Congress two pieces of advice:
1) Don’t trust the insurance industry.
2) Don’t trust the insurance industry.

But how can we have fundamental reform of what Mr. Obama calls a “broken system” if the current players stay in place? The answer is supposed to lie in a combination of regulation and competition. [the same query can be asked for the bank bailouts ~~t]

And here’s the thing. Without an effective public option, the Obama health care reform will be simply a national version of the health care reform in Massachusetts: a system that is a lot better than nothing but has done little to address the fundamental problem of a fragmented system, and as a result has done little to control rising health care costs.
Right now the health insurers are promising to deliver major cost savings. But history shows that such promises can’t be trusted. As President Obama said in his letter, we need a serious, real public option to keep the insurance companies honest.