Half a fix may be worse than no fix at all
There are two major problems with the U.S. health care system today: It’s very expensive, and there are many people who don’t have insurance. The two are ultimately tied together, both financially — I would imagine many of the 26.9% of Texans who don’t have insurance would buy it if it was cheap enough — and politically.
The solution is to get everyone into the risk pool, where the uninsured well people can help pay for the uninsured sick people. With universal health care off the table, that leaves politicians requiring everyone to get insurance through private insurers such as UnitedHealth Group (NYSE: UNH), WellPoint (NYSE: WLP), and Aetna (NYSE: AET). Without mandated health insurance, insurers can’t afford to insure people with preexisting conditions.
But the government would have to subsidize insurance for many poor people, which means extracting concessions from other areas of health care: drugmakers like Pfizer (NYSE: PFE) and Merck (NYSE: MRK), medical-device makers like Boston Scientific (NYSE: BSX) and Medtronic (NYSE: MDT), and even doctors who cover Medicare patients. Unless we’d like to bloat the deficit even more, we need those concessions.