Paul Krugman's embarrassingly weak analysis on the Supreme Court debate over health care

Krugman's piece on Friday, "Broccoli and Bad Faith," continues his trend for polemics over accuracy or analysis.

Let's start with the already famous exchange in which Justice Antonin Scalia compared the purchase of health insurance to the purchase of broccoli, with the implication that if the government can compel you to do the former, it can also compel you to do the latter. That comparison horrified health care experts all across America because health insurance is nothing like broccoli. Why? When people choose not to buy broccoli, they don't make broccoli unavailable to those who want it. But when people don't buy health insurance until they get sick -- which is what happens in the absence of a mandate -- the resulting worsening of the risk pool makes insurance more expensive, and often unaffordable, for those who remain. As a result, unregulated health insurance basically doesn't work, and never has. . . .

OK, so if you wait until you are sick before you buy health insurance, you drive up the price of insurance for others. But the exact same argument exists for broccoli. If broccoli makes you healthier and you don't eat it, you are more likely to get sick and you will shift up the demand curve for health care, raising the price of insurance.

unregulated health insurance basically doesn't work, and never has. . . .

Krugman is well-known for his assertions. If you got rid of insurance regulations, prices would be set according to risk.

I was struck, in particular, by the argument over whether requiring that state governments participate in an expansion of Medicaid -- an expansion, by the way, for which they would foot only a small fraction of the bill -- constituted unacceptable "coercion." One would have thought that this claim was self-evidently absurd. After all, states are free to opt out of Medicaid if they choose; Medicaid's "coercive" power comes only from the fact that the federal government provides aid to states that are willing to follow the program's guidelines. If you offer to give me a lot of money, but only if I perform certain tasks, is that servitude? . . .

The discussion before the Supreme Court was over "coercion," not "servitude." "Coercion" means to impose a cost on others. As any economist knows, costs are always opportunity costs. Giving up money represents an opportunity cost. But let me make it simple for Krugman: You take money from me by force and give it back only if I do want what you want me to do. That sure seems like coercion.