Health Care

Well, it's been a while since I posted. I have decided to look at Health Care today, and what we should do about it.

One thing that I think almost all people would agree on in the United States is that our health care situation is not good, and something should be done. But what? The left want universal health coverage, but what will that cost? The right want free market solutions, but doesn't that leave the poor even worse off?

Let's talk about both situations. First, free market solutions.

While the libertarian in me wants the government out of the picture, is this really a good idea? The answer I will always give.... it depends.

What would happen if we completely got rid of government oversite, and even insurance companies. If I have to go to the doctor, it's just like anything else. I shop around, and find the best deal for me. The problem is that if something really bad happens (cancer for instance), most of us do not have the hundreds of thousands of dollars to pay for it. My son was born with heart problems, and he has racked up $250k of medical bills. I can't afford that, so my son would have died. Anyone want that to happen to them?

What about universal health care? Everyone gets covered, no matter what. That sounds great! The problem is in the details. Because it is "free", I can go to the doctor whenever I want, which costs more. Instead of deciding to wait a day, to see if I feel better, I can go as often as I want. And, what does the health care cover? As politically incorrect as it is to say, there is a price for a human life. There is a finite amount of resources, and we can't do everything for everyone. What if the time and money spent on my son could have saved 10 other people. Well, it's cold hearted to save my son rather than the 10 others, isn't it? And what about non-life threatening problems. I've mentioned before "The Undercover Economist". Great book. The author has a chapter about health care, which is interesting. He talks about the British health care. They have a finite amount of money to spend, so they have to decide what procedures to cover. How can you decide which is better, getting cataract surgery so that someone can see, vs getting a prostetic arm. Neither is life threatening, but will make the quality of life better for the recipient. What about spending millions of dollars to save someone who is 98 years old. Is it worth it???

In a free market, people can make individual choices on what is important to them. Sure, it's not really fair.... The rich can do what they want, while the poor suffer. But, on the whole, more people get what they want because they have to pay for it.

So, what do we have now? The worst of both worlds? The government has highly regulated the insurance industry. Insurance can only be sold at the state level, not federal. Because most insurance is given through someone's employement, you don't get to choose the best plan for you. You don't really have much of an incentive not to use the insurance (you only have a $25 co-pay). On the other hand, many poor people don't have access to the same quality of care that those with good insurance do. The government is already subsidizing lots of people, and spending lots of our money doing it...

So, what is to be done? Here's my solution to our health care problems in the US. I have taken a lot from "The Undercover Economist", so I can't claim most of these ideas as my own.

First, I think insurance is a good thing, but we need to drastically change how that happens. Currently, most people get insurance from their companies because it is tax free. The company would have to give you much more for you to buy the same health insurance, because you have to pay taxes on all your income. So, the first thing I would do is make the first, say $10k of money you spend on health insurance tax deductable. That way it doesn't cost any more for you to get your own health insurance plan. Just tell your employer you would rather have the money to make your own insurance decisions.

This will allow there to be much greater competition in the insurance business. No more catering to large companies. It will have to be more like car insurance, where you can shop around for the best deal. That way an insurance company can taylor a plan for you.

The next thing I would do, which is not what libertarians would like to hear, is get the government involved. I would have the government sponser all catastrophic health insurance. And catastrophic means catastrophic. If your bill is over, say $250k a year, the government picks up the rest. That way normal health insurance would have upper limits, and the premiums would go way down.

I would get rid of medicaid and medicare, and have the government help those people by helping them get normal health insurance.

How does that sound? Any comments? What else would we do to make the system better? I will try and post more frequently, and maybe come back to this subject, but I have to run now.




He points out that health care will not follow the normal economic models that would make free market solutions work. The problem is information. If I am healthy, it shouldn't cost too much to insure me. If I have cancer, than it will cost a lot to take care of me. I have information about myself, that the insurance company doesn't have, ie if I am sick or not.