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Baylor University Economists Call for Different Tack on Health Care Insurance
Date:8/24/2009

WACO, Texas, Aug. 24 /PRNewswire-USNewswire/ -- Two professors at Baylor University's Hankamer School of Business lay out a universal health care plan in their new book Health Care for Us All: Getting More for Our Investment, published by Cambridge University Press, that does not create a government entitlement program or threaten in any way the insurance coverage or health care of Americans who currently have coverage.

First and foremost, say the professors, public health care arrangements should respect the features of American health care that are the best in the world.

"Health care and health insurance are best provided through robust competition in private markets," said Dr. Earl Grinols, Distinguished Professor of Economics at Baylor and co-author of the book. "To keep costs down, the only known reliable self-regulating mechanism requires competition, such as requiring health care providers to publicly post their prices and charge all consumers who buy the same service on the same terms at the same price, so consumers could shop for services."

Most people who are uninsured do not purchase coverage because of high premiums. Homogeneous risk pooling with premiums based on age and sex would lower the price of health insurance to the group with the highest rate of uninsurance - the young and healthy. The authors say that current Congressional proposals are counterproductive because they ignore economic principles and have already been shown in many places they have been tried not to work.

The economists recommend an intervention plan that includes income subsidies that would be available to everyone, but would primarily go to the hard to insure -- the five to 10 million who don't have insurance due to low earnings or previous medical conditions.

"Rather than redesigning the nation's entire health care industry," said co-author Dr. James Henderson, The B
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