Reminder

Every single time I write about health insurance, commenters and emailers flock to tell me that I wouldn't feel this way if I, or anyone I know, had been sick and uninsured.

I'm afraid the empirical evidence indicates that you're wrong. I was uninsured, with asthma and an autoimmune disease, for years as a freelancer. I was then, if anything, more opposed to national health insurance than I am now. If I were blocked from knowing, through a Rawlsian veil of ignorance, whether or not I would be uninsured for the rest of my life, I would still be opposed to nationalizing health care. 95% of the time when this accusation is made, I know a lot more about being sick and uninsured than my accuser. Don't criticize until you've walked a mile in my Medicaid mill . . .

Comments

Do you think everyone that gives you flack has been healthy and insured all this time? Why do you think people are so passionate about it? Why not increase America's competitiveness? Our present healthcare system hurts our global competitiveness. Did you go into debt because of your medical bills while uninsured? Do you like fighting with companies because they won't cover certain costs they say aren't necessary? Or try and deny coverage because you have a major health event at 9pm on a Sunday night and only one surgeon is on call. And then the HMO tries to say the surgeon overcharged by almost $10,000. In a life or death situation. Face it, the system we have now in the US sucks. it puts profits ahead of care and what's right.

Posted by Joe Klein's conscience | October 31, 2007 2:39 PM

You wouldn't feel that way if you were continuously insured for the last 44 years and hardly had any medical costs at all!

Hah!

Posted by Njorl | October 31, 2007 2:40 PM

Aren't these commenters claiming, in effect, that "You would support my policy if you thought it would benefit you/ your friends"?

Don't they have any reasons to support their policy, other than a belief that they personally would benefit?

Posted by ad | October 31, 2007 2:45 PM

I have had experiences in both the US and the Canadian system. I have been poor and uninsured in the US and needing health care badly. I have been healthy, well off and sitting on an extremely long waiting list in Canada for a surgery.

I found both experiences unpleasant.

My major objection to US health care is that I am concerned that we have not properly aligned the insurance incentives. That doesn't mean that I am defending the Canadian system as perfect (this system also has serious issues). But it does mean that I question the ability of efficiency gains to operate in the current system. Ironically, the areas that I'd like to reform involve contract law and regulation to remove "commons dilemmas" from the health care system.

I think it is also fair to admit, in any discussion of this topic, that the "best way to administer" health care is an unsolved problem and involves weighting values (universal coverage vs. quality of care) that are tricky to balance.

Posted by Joseph Delaney | October 31, 2007 4:10 PM

You need to put this in a FAQ so you don't have to post it every couple of months...

EI

Posted by Earnest Iconoclast | October 31, 2007 5:34 PM

Tried to post twice and the spam filter ate it both times.

Shorter liberalrob: I find your lack of empathy disturbing...

Posted by liberalrob | October 31, 2007 5:46 PM

I can't comment on how Megan's feelings would change under various circumstances.

But what I know for sure is that Megan, like all Americans, never was truly uninsured: if she would have showed up at an emergency room, she would have received care. We already have universal health insurance in the United States. I believe it is poorly designed, unfair, inefficient, but we have it.

Posted by Jeff Goldman | October 31, 2007 11:20 PM

a Rawlsian veil of ignorance

Is this like a Roman wilderness of pain?

Posted by FGFM | November 1, 2007 11:55 AM

The basis of this charge, whenever it is raised, is essentially "You don't have the right feelings about this."

There's no end of foolishness down that road, because sensible people necessarily recognize that feelings must be governed by restraint and counterbalanced by logic, not indulged to their fullest until such a time as one "feels" differently.

Posted by anony-mouse | November 1, 2007 2:04 PM

You should put this beneath the title of your blog: I'm a hypochondriac, feel sorry for me, waaaah, waaaah, waaah.

And until you tell people where you got the money for your health care during that period -- which you not-so-cleverly fail to state each time you repeat yourself -- no one's going to fall for the uninsured freelancer bit. Not all your readers are as stupid as you hope.

Posted by Yawn | November 1, 2007 3:35 PM

Yawn wrote: Not all your readers are as stupid as you hope.

Some of them are, however, remarkably self-unaware.

Posted by anony-mouse | November 1, 2007 5:52 PM

In every government run (or nationalized) system I've seen, entrepreneurial research pretty much stops (it's the first thing cut when things get tight, and there's an assumption that what we have today is adequate – where a Cuba-like solution is more important – first serve everyone with the minimum and if the money runs out, too bad for advancing the state-of-the-art).

The level of (medical, bio, etc.) research funding in the nationalized systems seems to me to be almost zero (when looking at research papers, citations, post-graduate work, etc.). With the socialized medicine part of the world free-riding on those that countries that are not (w/ the U.S. for all of its problems still being the clear leader – imagine what it could be if we got out of the way of a direct market between consumer and the provider – I suspect we'd each have another 10 years of comfortable living). I for one am not willing to settle for government specified research priorities, or worse, pressure and special-interest-group specified priorities. Though either of these would be better than the likely result, of us expecting to be a free-rider on someone else's success.

Posted by Ari Tai | November 1, 2007 10:15 PM

Ari, so we should abolish NSF, NASA, ONR, DARPA, NIH, NOAA, and all those other useless funding agencies?

Posted by Stan | November 2, 2007 7:10 AM

There are just, unfortunately, some people who think that it is the duty of other people to pay their bills so that they can afford LUXURIES instead of having to pay for their health care.

For example: If you say you can't afford health care, and I see you driving around in a new car and with a satellite TV? Not even the slightest smidgen of a bit sorry for you. You eating out at restaurants? Why, if you can't afford health care? In the US

More over, you want to steal money from people so you can buy BAD health care.

Posted by RYan | November 2, 2007 7:31 AM

Yawn,

"Uninsured" seems pretty unequivocal. Maybe in Bizarro World "uninsured" means "insured by the government" but last I checked it actually means "uninsured."

Posted by chaos | November 2, 2007 7:46 AM

Shorter liberalrob: I find your lack of empathy disturbing...

It's not a "lack of empathy". Some of us think that delivering someone into the tender mercies of The State (any state) is not an act of kindness. Governments are good at one thing - compulsion. Sooner or later, anything and everything they do turns into compulsion.

The State is not your friend.

Posted by Dishman | November 2, 2007 8:09 AM

The argument in favor of government involvement in health care is usually that it is the right thing to do. This may be so, but that's a moral judgement, a religious basis if you will. Since this involves taking money from opponents of such programs for the benefit of morally based programs, how does this not violate the establishment clause of the first amendment?

Why is it that those most vocal about separation of church and state demand that nonbelievers contribute to their moral and religious programs? Unless you can argue governmental health care from a morally neutral position, you are imposing your belief system on me and violating the Constitution.

Posted by Ken Hahn | November 2, 2007 8:12 AM

Why do nationalized health care advocates assume they would get everything they want, for everybody, under that system?

The evidence from Canada, England, France, etc. shows there are more losers than winners: rationing occurs, there are dealy long waits for surgury or advanced care and decisions are taken out of the hands of the patient and instead made by unaccountable government bureacrats.

Yes, a socialist paradise, all right.

Posted by Greg Toombs | November 2, 2007 8:28 AM

We focus on insurance, but the whole system is remarkably bad. Thorough government control and regulation is melded with the AMA monopoly on health service delivery. This is a system that seems deliberately designed to be unAmerican and hopelessly inefficient and corrupt.

Give me a couple of free-lance neighborhood nurses and a less-regulated access to medicines, and I will no longer be a burden on anyone's health care system. For pennies from my pocket, I gain more freedom, and you all gain less taxes and less government control.

But the doctors will NEVER give up their monopoly, and the lawyers love the cashflow from their lawsuits, and the government exists to overregulate. Nothing significant is going to change until the whole house of cards collapses completely. We're too rich for that happen anytime soon.

Posted by Mike Devx | November 2, 2007 8:29 AM

From what I've seen, the US Health Care system is pretty broken. The biggest issue appears to be price distortions caused by the HMO's Walmart-style payment practices.

The Canadian system is broken worse. As someone who has several close relatives with severe chronic conditions, wathcing them wait for procedures that would take days in the US is hard. And the Canadian system (Which is provincial, not federal btw, HillaryCare is NOT Canadian-style, it's UK-style.) is one of the better ones out there, despite being rather stalinist (The only other systems to enforce single-payer government health care ONLY are the NK and Cuban systems)

Posted by Adam Maas | November 2, 2007 8:32 AM

"In a life or death situation. Face it, the system we have now in the US sucks. it puts profits ahead of care and what's right."

Yes, because all my experiences with government-run offices have gone absolutely smoothly, with no hitches. They've never denied me anything I thought I needed or deserved and were SO caring about my situation. They didn't care AT ALL about overrunning somebody's budget and didn't suck AT ALL.

Heh.

Posted by Dan | November 2, 2007 8:35 AM

It seems like the discussion of US health care is analogous to the discussion of democracy: it's the worst option in the world, except for all the other ones.

Posted by Math_Mage | November 2, 2007 8:38 AM

I wonder how much of the rising prices for everything medical related is due to pricing guidelines promulgated by Medicare, specifically Medicare will pay only >

Posted by Mark | November 2, 2007 8:45 AM

Most of the threads on this subject include at least one post bemoaning the sad state of Canada's health system. If it's not Canada, it's France or Germany or you name it. These countries are democracies. They all have at least one conservative political party. The Canadians, the French, and the rest of them furriners follow American news and know about our health system. And yet, mirabile dictu, none of these countries show any inclination to scrap their medical system and go over to ours. Why is this? Should we worry about their mental powers? Are they inflicted with some socialist bug? Why can't they see the superiority of the American way of life? Please enlighten me.

Posted by Stan | November 2, 2007 8:56 AM

There are plenty of ways to improve health financing without going through nationalization whether like the UK or Canada. Stop barring cross-state plans, for instance (Pres. Bush called it associational health care).

And lets stop kidding ourselves that we're only getting necessary health care. Doctors know a lot earlier what's going on in most patients but they don't dare provide a diagnosis early because if they do, they know that a lawsuit is inevitable and the opposing lawyer will crucify them. All diagnosis and treatment has an error rate. If you provide all the gold-plated tests, it's lawyersbane, you've followed the standard of care. Save the system millions of dollars and skip a bunch of painful, useless tests and that 1 in 10,000 patient who couldn't have been helped in any case has a few missed tests to hang his multi-million dollar lawsuit on. Bad doctors do exist and deserve to get sued and lose their licenses but unreasonable lawyers have turned *all* doctors paranoid. And when paranoia strikes deep in the medical profession it's extremely expensive. The official figures miss the bulk of the problem.

The entire system is riddled with unnecessary overhead, some of it due to government pressure, other parts because medicine has incompletely taken part in the technological revolution. The political part can only be solved politically but the rest, this can be influenced even on an individual basis. If your doctor still has paper charts, he's wasting money and part of that ends up in your bill, part of that ends up in reduced patient care. Let him know that you understand that and consider taking your business elsewhere if he continues being a wastrel.

Posted by TMLutas | November 2, 2007 8:58 AM

The insurance deal is from hallucinating about an unlikely situation, that you will get very very very sick but won't die from it quickly, and so will have to pay more money than you ever have seen.

In that unlikely situation, just choose to die, and you're free from that worry. Convert it to the much more probable case of getting very very very sick and dying.

For the rest of the cases, just pay what you have to. That will cover you nicely.

Doctors can't stay in business charging more than people are willing to pay, if insurance simply stops. Just to point the way out of the fly bottle, in case anybody is still looking for it.

Posted by Ron Hardin | November 2, 2007 9:05 AM

On one hand Stan is right, it won't be the end of the world. But I've had HMOs, and no way in hell do I want to go back to managed care, especially run by the government.

But you are ignoring the effect of the US on those systems. As Ari Tai points out above, most of the cutting edge medical research is done here. Without countries like the US with the money and technology to conduct research, and also the incentives given to companies to perform research, it won't get done, or will slow down drastically. All government spending on research, just like grants now, gets hijacked to political jockeying. I read an article a few years ago in a French newspaper decrying the fact that top cancer researchers keep leaving France to come to the US. Companies here have the facilities and the money and are willing to get it done. And no, it's not out of the good of their hearts, but it gets done.

Look at vaccines. Only 2 decades ago we had 25 producers of vaccines. Now we have 5, constant shortages, and few new ones. Even HIV vaccine research is starting to try up anticipating government money to fund it. What happened? Hillary's Vaccines for Children program is one major problem. The thing is if you make it impossible to make a profit, if you have lawyers sueing everyone for even the profit they make then companies simply get out of the business. And if the government says they'll hand out money, then companies will stop spending their own.

Sure I suppose cutting edge research might move to other countries, but I imagine the world would get set back for a time, and some former 3rd world country would become the new place for the top research.

Posted by plutosdad | November 2, 2007 9:20 AM

I think that people don't believe they can afford medical insurance because that don't yet intuitively think of medical care as a fundamental budget item on par with food, clothing and shelter. People still conceptualize medical spending as part of their disposable income to which they only allocate money after they have paid for the "necessities." We still haven't learned that we need to make tradeoffs in our level of consumption in housing, transportation, luxury food and other consumable in order to pay for medical care.

I have had to pay medical insurance for a family of four out of my own pocket and it did hurt. It was the major cost in my budget after housing. Yet I did pay it. I sacrificed spending on housing, transportation and consumer goods in order to make the payments. I did so because I understood the fundamental importance of such insurance.

It is only been about two generations since access to medical care has come to make a huge difference in the quality and lengths of peoples lives. Having most of medical spending decisions made for us by the State of employers has psychologically shielded us from adapting to our need to adjust our budgets to include medical care a major and basic outlay.

Posted by Shannon Love | November 2, 2007 9:34 AM

Stan, those Canadians who can afford it travel to the USA for their medical or surgical needs. If it wasn't for the American safety valve, then the Canadian system would have to change; there wouldn't be any other choice, and not even bureaucratic inertia could stop such a change.

Posted by Ed Minchau | November 2, 2007 9:48 AM

>And yet, mirabile dictu, none of these countries show any inclination to scrap their medical system and go over to ours.

Don't assume a rational explanation. In Canada, the reason is envy - fear that someone else might get more of something. It doesn't take long in any discussion of health care in Canada for the facade of reason to be stripped away and the ugly truth laid bare: many people are genuinely angry that wealthier people can, in effect, buy a healthier and longer life. With the Canada Health Act effectively acting as at least a partial obstruction, those people are adamant that there be not one step backward and work to close the door further.

Have you read about any psychological experiments (financial games) in which people would rather pay a sum to drag down a dominant leader in the game than pocket it to their own benefit? That's Canada.

Posted by lrC | November 2, 2007 9:48 AM

I live in a state with "universal" health care (the UK). I also do a health-critical job, whereby when I was self-employed I could earn no money when I had back problems.

Of course I went to private practitioners, and was working again within a week, fully fit in a few more. The problem was I had paid. In my taxes I had also paid for everyone else, but been unable to take the benefit because of waiting times, which would have lost me far more money than the cost of my treatment.

I was in a job that earned significantly less than average wage. Why did the government force me under threat of prosecution to pay twice for my healthcare?

Posted by Richard | November 2, 2007 9:48 AM

Ari, so we should abolish NSF, NASA, ONR, DARPA, NIH, NOAA, and all those other useless funding agencies?

Those are all fine, but they don't bring technologies to market. A technology that hasn't been brought to market is a technology that nobody is using.

In order for research to make the leap from the lab to the street, you need a market that makes financing that leap look attractive to investors. That market becomes increasingly unlikely the more the state is involved in healthcare.

Posted by R C Dean | November 2, 2007 10:09 AM

I'm always surprised that people are surprised at the cost of their health insurance. If oil changes and car washes were part of your auto insurance, your rates would skyrocket. If you took your car in every time you felt a funny knock or saw a puff of smoke you didnt like, your insurance would skyrocket. And if our auto insurance was built into our salaries so we didnt see the bills, we wouldnt care very much until we were asked to pony up for it.

The anti-nationalization argument should be REAL clear- if the government becomes responsible for our health care, the government will take responsibility for our health. That is a fact. Enjoy McDonalds and menthols while you can, because the nannystate is bad enough now when they just care about you. When they are paying your medical bills, expect a whole new level of 'caring'.

Posted by Mark Buehner | November 2, 2007 10:14 AM

All of the theoretical name-calling about fascists and stalinists aren't really very helpful, either. The provision of health insurance is chock-a-bock full of opportunities to get ourselves into situations where everyone acting in their own best interest results in everyone getting screwed.

Classic example: health insurance used to be non-portable. Which meant that if you or a family member developed an expensive, chronic condition while employed at a particular job, and then you changed jobs, then coverage for that condition would be excluded as a pre-existing condition in the health insurance at the new job. So the upshot was that people stayed in jobs were they were no longer a particularly good "fit" as an employee, and if you were an employer who really wanted to attract one of those employees you had to come up with a lot of cash to compensate them for the medical bills.

Now if you were an individual insurance company and you wanted to say, "Hey, if you come into our plan then we will cover anything that was covered under your old plan," then you would be providing a valuable product for your customers (employers). But what would happen is that the other insurance companies would "free ride" off of you -- people would transfer into your plan, but sick people would never transfer out.

On the other hand, if ALL insurance companies at once allowed portable coverage, then the expensive people moving into an individual company's risk pool would be, on average, balanced out by expensive people moving out into other companies' risk pools. Which would mean that ALL companies could offer an insurance product that is significantly more valuable without being any more expensive to provide.

So, insurance companies lobbied the government, and they got the government to pass a law which made everyone better off -- the employers, the employees and their families, AND the insurance companies. (Vocabulary word of the day: Pareto optimality)

Insurance is by nature a common pool, and full of common-pool problems. Frothing about fascism isn't going to cut it -- if you can explain why something makes people worse off (and with government health care there are lots of strong arguments that it does) then make the argument. Don't just think that after the name calling the argument is over. Because 99.99% of us will happily sacrifice and live with a "fascist" or "stalinist" aspect in health care if it results in ourselves, our families, our neighbors being better off.

Posted by cathyf | November 2, 2007 10:15 AM

Of course we do have issues in our Canadian
system and fine tuning is necessary but a
huge majority of Canadians are very proud of
our universal healthcare system.I recently
had a total hip replacement,cost 68,000
dollars and untold meds, physio,home care etc.
Cost to my family?...0.The care was beyond
excellent. Oh and by the way in regards to
world class research, anyone ever hear of
Toronto's Sick Childrens Hospital or
Montreal's Mgill?I love America and the time
has come for the greatest country on earth
to insure all its people.

Posted by Bill Buckham | November 2, 2007 10:24 AM

Shannon is right that people need to include money for medical care in the monthly budget. I know several famlies who do not have health insurance, but they are in the middle or upper middle class income level. They don't buy insurance because it is a huge expense, and they don't need a lot of health care. When they do need health care, they pay for it out of pocket- office visits are expensive, but they don't put you into bankruptcy. A serious illness or injury however would be a disaster.

I do find it a bit odd that those who choose not to buy health care support the government choosing to buy health care for them. That's one reason why I like Romney's approach- you are REQUIRED to buy insurance. If you can't afford it, it will be subsidized, but you don't get "free" health care.

Our health care system is great, but we haven't yet figured out a good way to pay for it, and part of the problem is that that new technology and medications that provide life saving care are very expensive. While I am willing to wait for the cost of an iphone to drop to a level I can comfortably afford, I am not willing to wait for the cost of medical care to drop before I purchase it. I'm going to buy it when I need it, and my doctor is going to recommend whatever tests and procedures he thinks are best, not just the ones that are low cost. While we work to figure out how to pay for all this, we should keep in mind Hippocrates injunction to his students- Above all, do no harm.

Posted by JeanE | November 2, 2007 10:26 AM

"I recently
had a total hip replacement,cost 68,000
dollars and untold meds, physio,home care etc.
Cost to my family?...0."

Do you really believe that? How much did your familiy pay in taxes last year?

Posted by Mark Buehner | November 2, 2007 10:44 AM

"you wouldn't feel this way if you, or anyone you know, had been sick and uninsured ..."

I hear people make this type of argument all the time, and it's fallacious. If this were a court case, potential jurors who had personal experience of the matter being tried would be disqualified. And rightly so. They would be too emotionally involved to render an impartial verdict.

Posted by John S. | November 2, 2007 10:47 AM

In Canada, the argument goes the other way. Those who are vehement in opposing the slightest change to the system always tell us how cheap it is to society, better for us all to suffer a little for the common good. Maybe the Democrats should try that line during the next election.

My employer was initially suspected of some heart problem in October last year. In March he finally got diagnosed and started treatment.

Our former Prime Minister, in an election campaign said that anyone who wanted quicker care can go to the US.

It's not a private/public of debate. It really should be do I trust politicians and the political system with my health? That is what it comes down to. Easy answer.

Derek

Posted by D Kite | November 2, 2007 10:58 AM

"Stan, those Canadians who can afford it travel to the USA for their medical or surgical needs. If it wasn't for the American safety valve, then the Canadian system would have to change; there wouldn't be any other choice, and not even bureaucratic inertia could stop such a change."

Pardon me, Ed, but this is truly lame. Where do the French go for their medical treatment? And the Dutch, and the Germans, and the Swiss, and the Finns? For that matter, where do the Hawaiians go? And the Massachusettsians? Can't you come up with a better argument?

Posted by Stan | November 2, 2007 11:00 AM

Mark,To be honest about the same as you
and gdp wise, a lot less than America.Just
wanted to clear that up.

Posted by Bill Buckham | November 2, 2007 11:05 AM

I was hit in the eye with a softball in my mid-20's. (15 years ago) I had just quit paying for my own insurance because I felt invincible, as do many of our young and uninsured. I went to the emergency room, because it was on Sunday. I told them upfront I had no insurance and my job did not pay well. They told me not to worry. They said that because of the broken/shattered orbit bone they needed to call a plastic surgeon right away. I told him about my lack of insurance etc...he said his main concern was my eyesight. He scheduled me for surgery that Wed. The entire bill was $7,000. I worked out payment plans at 0% interest with every party, hospital, surgeon, X-Ray techs, anethesiologists, etc... And even though I was not making much I made may payments on time and I only paid what was owed. In fact my bill was slightly higher, but each party agreed to knock down some of the costs if I paid ontime and never missed a payment. I had the best care, never have had a problem with the eye or the orbit bone 15 years later. Many of the uninsured, choose as I did, not to have insurance. However from that point on I have made it a priority to make sure my job, my wifes job or COBRA (when laid off) provides insurance so I do not have bills. Insurance even at $400 a month is a priority compared to having to buy all of the latest gadgets etc...Considering many people's credit cards or new car payments exceed $400 a month - where are their priorities? When I hear of retirees complaining about not being able to take their 3rd cruise of the year because of having to pay for medicines or insurance - hey they are alive. There is nothing in the constitiuion that says we all deserve free health care or have to so many items to by (plasma tvs, $50,000 cars, cruises etc...) Considering what we all have compared to what our folks had in goods, only 1 generation ago, it is amazing what is considered to be expected for people to have 2,000 sq foot house, 3+ bathrooms, every kid has their own bedroom, tvs in every room, new cars -when in reality do we really need all of those items or our health. Americans have it good all over with more money to spend on unnecessary items, very good healthcare (no lines) and longer lives than just 1 generation ago. Since the government has not proven to be able to run any program, I want the choice to choose my provider, doctor, etc...instead of the government choosing where I go, and when they will let me in for care.

Posted by Tim | November 2, 2007 11:56 AM

Bill: Really? In income tax terms, yes, the rates are pretty similar in Canada as in the US. (Maybe a couple percentage points higher, but not a huge difference.) But nowhere in the United States will you find the equivalent of a combined federal and provincial sales tax in the 13-14% range. GST alone is higher than many American state sales taxes (6%), and then you add 7-10% PST on top of it. Property tax rates aren't too dissimilar, but then you have significantly higher gasoline taxes, and Canadian "sin" taxes are also steeper than they are south of the border.

"Free" has to get paid for somehow, after all.

Posted by Brian | November 2, 2007 11:58 AM

Tim, I disagree about the government not being able to run any program. I was the intermediary between my mother and Social Security for many years, and never had any trouble. I've had the same experience since my wife and I went on Social Security. Ditto for Medicare. And don't talk about FEMA or the VA in this connection. They worked excellently before Bush got his hands on them.

I agree with your complaint about people squandering their money while not providing for their health needs. I don't see how the medical plans proposed by Clinton and Edwards favor free loaders. The essence of these plans is a) if you get medical benefits through your employer, you keep them, b) if you don't and if you're a legal resident, you're required to buy private insurance and you receive a subsidy to do so if your income is low enough. How is this a giveaway? Yes, some low income people get a subsidy, but the savings in terms of lightening the load on emergency rooms and in providing preventive medicine are enormous.

Posted by Stan | November 2, 2007 12:23 PM

My dogs have neither insurance or nor government paid coverage and yet they get excellent medical care at a reasonable price. I would be happy to receive care in their system if I could just add insurance for truly catastrophic events.

Posted by Al McAlister | November 2, 2007 12:25 PM

Pardon me, Ed, but this is truly lame. Where do the French go for their medical treatment? And the Dutch, and the Germans, and the Swiss, and the Finns? For that matter, where do the Hawaiians go? And the Massachusettsians? Can't you come up with a better argument?

I've never seen someone respond to an argument that they can't refute by demanding that the *other side* come up with something "better".

The right answer to that is this: we opponents of socialized health care will come up with "better arguments" when you guys stop pushing the same old bad ideas.

Why don't YOU come up with something better than "the government should run it" (the Left's one-size-fits-all "solution" to nearly everything).

And yet, mirabile dictu, none of these countries show any inclination to scrap their medical system and go over to ours. Why is this?

Ken Hahn answered that one; the argument in favor of socialized health care is a "moral argument, a religious one if you will." When morality is opposed to "practicality", the practical arguments will always lose until disaster is hard by the door.

The subsidization of foreign medicare systems by the American health industry is a big factor enabling such pretenses -- not to mention other effective subsidies (America's military prowess enables Canada to divert spending from its now pitiful armed forces to its health care system.) If America simply stopped foreign aid, for instance, a lot of this pretending and posturing would stop dead.

I have long said that Canadians politicians should oppose socialized medicine in America, because that would wipe out our backup.

Posted by Seerak | November 2, 2007 12:34 PM

Which meant that if you or a family member developed an expensive, chronic condition while employed at a particular job, and then you changed jobs, then coverage for that condition would be excluded as a pre-existing condition in the health insurance at the new job. So the upshot was that people stayed in jobs were they were no longer...

Cathy, does it occur to you that the portability problem is because employers are buying health insurance for you? You don't have this problem with, say, auto insurance, because you go buy your own policy. If you bought your own health insurance, then you could change jobs all you want without worrying about pre-existing conditions.

A huge portion of the problms with the US health care system come from the bulk of private insurance being provided by employers. This happens because of government tax policy. Before Washington DC trys to provide government insurance, it ought to stop warping the private insurance market.

Posted by JMHawkins | November 2, 2007 12:39 PM

Because our government schools do such a universally good job of educating students, government-run medical systems would do an equally good job of keeping people healthy... heh, yeah right.

Posted by Tom | November 2, 2007 1:12 PM

The healthcare debate is stifled because most people are totally ignorant of how the system was created. Almost every problem we have is due to the government. They created HMOs, they created price controls, they've allowed the legal system to go haywire, they created the system whereby you need a job to get insurance.

The fact that people believe universal care has no costs shows how ignorant they are. Medicare and Medicaid spending is already equal to the public spending in nationalized systems. The government could declare universal care tomorrow, and we wouldn't need to increase spending or taxes 1 cent. Yet people believe doing this will result in the same care, same wait times, etc. It's absolutely nuts.

There is one caveat, however. If they believe that a lot of spending is wasteful then I could take their argument seriously. But I haven't heard any universal care supporter say that we need universal care so that we can force people to accept 50% less healthcare.

Posted by 8 | November 2, 2007 1:16 PM

Great, so maybe you've proven that you're not a self-serving hypocrite. For your next trick, try proving you're not a small-minded dink!

Posted by Glenn Kenny | November 2, 2007 1:24 PM

A huge portion of the problms with the US health care system come from the bulk of private insurance being provided by employers. This happens because of government tax policy.

The reason that health insurance through employers works is that it polices the moral hazard and adverse selection problems. In the study of collective action, the trick is to find an externality which brings people into the group so that they are forced to pay the premiums for the insurance coverage that they receive. (Because they will receive health care whether or not they have insurance and whether or not they can pay the bills because people will not allow other people to die or be seriously crippled just from lack of money.) The way it works in the US is that the job is the "carrot" that forces you to pay the insurance premiums -- you have to be self-employed, or work at a low-wage job to escape the insurance mandate. The "stick" is involved in rating a company's entire workforce in a single risk pool and a single per-capita premium. This addresses the adverse selection problems of healthier people getting individually cherry-picked out of a company's risk pool. They are allowed to buy rated insurance as individuals, but only by giving up the group subsidy of the company risk pool.

You can't have an insurance system that works unless it solves both the moral hazard and adverse selection problems. You can argue that putting people in jail if they don't buy health insurance might work as well. Or fining them. Or taking the money away from them and buying the insurance for them. But in our system the employer is already deeply involved in doing bookkeeping for its employees -- paying them, withholding taxes, setting up and administering retirement plans. Since the employer-employee financial relationship is already there, the health-insurance addition to it is reasonably efficient.

The bottom line is that not everyone can be a free rider, and any system that you have must be protected from free riders or they will destroy the system. People will not allow others to suffer the full consequences of their bad decisions -- if a family decides that they want to buy frivolous things rather than health insurance, and then their cute little child needs medical care and the family can't pay for it, then it is politically impossible to allow the cute little child to die as the natural consequences of the parents' free choice not to pay insurance premiums. We have to find some real actual politically possible way so that people who don't buy health insurance suffer an adequate level of bad consequences for their bad decision. Letting children die or our neighbors be crippled isn't going to happen (maybe you are willing to let it happen, but your friends and neighbors aren't so cruel and heartless.)

So if you are going to propose getting rid of the give-up-insurance-lose-your-job system of protecting people from insurance free riders, then you have to have some alternative system that has some at least equally-effective system of carrots and/or sticks to protect the pool of insured people from the parasites.

Posted by cathyf | November 2, 2007 3:41 PM

The idea that government support of the medical system is a "moral argument, a religious one if you will" is absurd. Universal medical insurance is standard in western Europe, a Godless place by American standards, and the most vocally religious Americans, the so-called values voters, are firm supporters of the more conservative of our major parties. The idea that "if America simply stopped foreign aid, for instance, a lot of this pretending and posturing would stop dead" is even dumber. Our per capita foreign aid (http://tinyurl.com/26q6v2) is one fifth the per capita foreign aid given by Denmark and Sweden and one eighth the per capita foreign aid given by Norway. Believe it or not, folks, we are a stingy nation. And finally, the idea that "government run health systems" are bad is equally ridiculous. Medicare is highly efficient, and the VA and the armed forces medical systems provided more than adequate care before the advent of the present administration.

Posted by Stan | November 2, 2007 4:16 PM

DARPA has paid for itself many times over by inventing the Internet. The DOE has not educated a single student.

Posted by David Govett | November 2, 2007 5:17 PM

I love how on Planet Cathy, letting people suffer the full consequences of their own bad decisions is "cruel" and "heartless".

It's precisely that kind of mentality that's warped the market for healthcare to the point where additional warping, in the form of single-payer or some other socialized system, has begun to look like a politically-attractive alternative.

If one is concerned about poor little Timmy, who faces suffering and death as the result of his parents' idiotic decision to blow their income on frivolities rather than health insurance, then one is perfectly free to pony up as much of one's own wealth as one wants as a charitable donation. But stay the hell out of my pockets, you goddamn thieves.

Posted by BC | November 2, 2007 5:56 PM

Medicare is highly efficient, and the VA and the armed forces medical systems provided more than adequate care before the advent of the present administration.

Another true believer. Care to provide some evidence?

Posted by Jordan Keith | November 2, 2007 6:09 PM

The problem with U.S. health care is that it is already too socialized, not that it is too private.

I'll use my situation as an example. My first child had open heart surgery at 6 weeks old in 1991. My second rode a helicopter 100 miles to a neo-natal ICU when she was born in 1993. My third also rode a helicopter, and had abdominal surgery at the other end -- she was 6 months old. This was 1996. The total bills for the three were around $250,000. More recently, my wife needed a tonsilectomy (nasty business as an adult) and a hysterectomy.

Yes I had insurance. Due to whacky birthdays and the magic of January 1, I still had about $30,000 in out-of-pocket expenses. I'll always remember the day I received over $50,000 in medical bills in one day's mail, looked at them, grunted, and put them on the coffee table. :-)

My experiences showed me we have superb health care. The financial side of the system, however, is a total train wreck.

1) There is no real price for a given service. A recent ER visit in my family was billed at $550ish, and was paid by insurance at a previously contracted rate of $72. No, I was not responsible for the difference, just for my copay.

What is the actual price of an ER visit at that facility? They didn't sign a contract for $72 visits knowing they would lose money. Volume discounts are not 85% in any other market I know of. The price clearly is not cost + markup. Rather, the price is "whatever we can get, above a certain minimum."

How can this be? Because I, as a consumer, didn't really care, or even think about, what the facility would charge for the service. After all, my out-of-pocket cost was $50. The fact that higher prices mean higher insurance premiums for my employer and ultimately a smaller paycheck? It's just not something we human beings deal with terribly well.

Now, suppose the tax code is changed, so that medical costs are deductible whether I pay for my own or my employer does. So I choose to purchase on my own. I go out and buy catastrophic health insurance -- 100% coverage with a $5000 deductible. I bank the difference, and use it when and as needed.

Now do I care how much the ER visit costs? Of course I do. I'm paying for it directly now. Since the visit was not for a dangerous situation, I would probably have called around a bit, or already done my homework, so I knew who offered the best mix of price and service.

If they were competing in an actual market, if a significant portion of their customers were price-conscious, that ER facility would NOT have had a sticker price of $550 on a service that cost them under $100 to provide.

Here's the kicker -- my out-of-pocket costs for 3 very expensive medical situations would have been roughly the same under my fictional future as it was with 80/20 PPO coverage with a stop-loss. But I can just about guarantee the total cost would have been lower. Fewer paperwork jockeys. Fewer difficulties billing for and collecting on $25 charges for Tylenol tablets. More efficient.

Dennis

Posted by Dennis R | November 2, 2007 6:10 PM

Medicare is highly efficient, and the VA and the armed forces medical systems provided more than adequate care before the advent of the present administration.

I about spit coffee all over the screen when I read that one!

Here's some inconvenient facts:

1) Medicare is plagued with fraud. Its unionized federal employees are paid well above market rates. It bullies providers on pricing in ways that would make any private insurer blush. The fact it exists creates companies that advertise to seniors, "Call us up; we'll get you a motorized easy chair for free." After all, it's free when the gov't pays, right?

Hillary says she's going to rein in the insurance companies' unwillingness to pay adequate prices? If she starts with Medicare, by far the worst offender in the entire system, she'll break the bank before she adds one more person to the federal health care dole.

2) The VA has always been known for providing expensive and substandard care. I personally watched a man die after the hacks at his VA hospital couldn't figure out bone cancer. He finally went to a different hospital for a second opinion. They found it immediately, but it was too late to matter. He went back to the VA hospital to die.

His case is not unusual. Any veteran with a choice and a brain goes elsewhere for health care. (Don't even get me started on the "VA vs. Agent Orange" nonsense.)

Hope the Kool-Aid Was Tasty,
Dennis

Posted by Dennis R | November 2, 2007 6:25 PM

Here's my source concerning the quality of medical care provided by the VA:

http://tinyurl.com/2cvue9

This is from the Washington Post. I realize Fox News has a different viewpoint.

Posted by Stan | November 2, 2007 7:08 PM

"AMA monopoly"

Anyone who writes that obviously knows nothing about the AMA's lack of control. It can't even keep the government from cutting primary care reimbursement year after year. Doctor's have pretty much no control over the cost of health care anymore. Most don't even know how much anything costs, because everything is paid for by insurers and the government, who decide what they are willing to pay with little or no input from physicians.

Posted by Med Student | November 2, 2007 7:17 PM

I certainly agree with you, Megan. I've spent some time uninsured, and my own mother has something like $35,000 in medical bills and no money to pay them.

I'm also married to a Canadian. He prefers the Canadian system, but he does admit it has flaws, too. My brother-in-law was born with an eye defect. If left untreated, the defect could have led to blindness in that eye. The key word is "could." That bit of uncertainty was enough for the powers-that-be in Quebec to say "no" to any surgery.

So my in-laws took their son to Children's Hospital in Boston. The specialist there took one look at the boy's eye, and scheduled the surgery for the next day. My in-laws had to pay out of pocket, of course. But it was more than worth it for them to have this problem eliminated, to no longer have to fight the provincial bean counters back in Montreal. And my brother-in-law, who is now 27 and has no trouble with his eyes at all, certainly is thankful that his parents took him to the States for treatment. Where are people like him going to go if our care is also socialized?

Then again, I spent a month uninsured last year here in the U.S., because my husband switched jobs. I was 5 months pregnant at the time, and it was scary. Because of lawsuits, obstetric care is just insanely expensive, and had even the slightest thing gone wrong, hubby and I would have been sailing up shit creek.

So I can hardly argue with those who say our system is perfect, either. The tax structure that ties employment to health insurance needs to end. It's asinine. Every little ache doesn't need to be tended by an expensive specialist. Nurses can handle most of the routine care that most of us need. Midwives can handle most normal childbirths. When I take my son for a "well baby visit," I get 10 minutes of my pediatrician's distracted time, after waiting 40 minutes in the lobby with people spreading germs, so that he can tell me the boy is healthy. The nurses administer the vaccines, weigh him, etc. I like that my local grocery store has an "express care" clinic in it now so that I don't have to waste half a day on a doctor visit when I have a minor complaint. I hope this kind of care keeps growing.

Posted by sally | November 2, 2007 10:24 PM

Friend, please at least recognize the increasingly
deadly and ferocious contribution of our'way
fighting above our weight'contribution in AF
ops.To do otherwise is a diservice to a loyal and true friend.

Posted by bill buckham | November 3, 2007 2:58 AM

DennisR: "There is no real price for a given service."

Yes, I second that. I have also dealt with paying for stuff not covered by insurance, and billed at about 4 times higher rate than those who are covered. Eventually, I threatened to sue the hospital for extortion, whereupon they agreed to let me pay at "only" the most expensive rate for any insurance plan - still about twice lower than the original bill.

Their excuse/explanation was that they are guaranteed to get paid from insurance but not from uninsured patients, hence the discount. Question, is the likelihood that someone who is not insured doesn't pay 75%? Because that is the probability implied by their pricing. Hmm...

I would offer a simple fix to this: everyone pays the same price for the same thing, no discounts or surcharges based on what the source of payment is. I can't exactly couch it in legal terms, but I have a strong feeling that this type of price-fixing between HMOs/insurers and hospitals pretty much has to run afoul of some anti-monopoly law.

Posted by ObsidianOrder | November 3, 2007 3:25 AM

My two cents... I put medical in priority somewhere just below food and above shelter, transportation or just about anything else. If someone in my family needs something, they get it, immediately and at the best quality available, period. If that takes a few $thousand out of pocket, so be it. What am I gonna spend that on instead, an expensive car or a big TV? Well you can if you want, but not me.

Perhaps not everyone can do that (although I think most people could, if they were more frugal), and it is good to have some kind of government or charity or whatever backup plan for the critical care needs of those who can't. But it is only that, a backup. I am not willing to have the ability to provide the best care for me and mine taken away, for any reason. I don't want everyone brought down to the same lowest common denominator. I don't want anyone else to make decisions about what I can and can't get. This stuff is important, sometimes life-and-death important. I want the best, I'm willing to pay for it, so get the hell out of my way.

P.S. Strategically, the fact that people like me are willing to spend big piles of cash on health care does result in improving the state of the art for everyone else. That's an important long-term consideration, although it is not as important to me personally. As others here have said, you'd really miss that factor a few decades down the road if it was gone.

Posted by ObsidianOrder | November 3, 2007 3:44 AM

cathyf: "The reason that health insurance through employers works is that it polices the moral hazard and adverse selection problems. In the study of collective action, the trick is to find an externality which brings people into the group so that they are forced to pay the premiums for the insurance coverage that they receive. (Because they will receive health care whether or not they have insurance and whether or not they can pay the bills because people will not allow other people to die or be seriously crippled just from lack of money.) The way it works in the US is that the job is the "carrot" that forces you to pay the insurance premiums -- you have to be self-employed, or work at a low-wage job to escape the insurance mandate. The "stick" is involved in rating a company's entire workforce in a single risk pool and a single per-capita premium. This addresses the adverse selection problems of healthier people getting individually cherry-picked out of a company's risk pool." - thank you for an enlightening analysis. I never really understood why the US system is set up the way it is until I read this.

I will propose, however, that there is an alternative: suppose you decided not to get insurance, but you really really need care. Fine, you get a loan that covers the full cost of the care (let's say government-subsidized, same as educational loans, but still a loan), and then you pay it back. What is so hard about that? The family in your example that spent money on luxuries instead of insurance will just damn well have to sell those luxuries, and then work extra hard for a while and not buy any more luxuries in order to repay that loan.

Posted by ObsidianOrder | November 3, 2007 3:57 AM

Stan,

"Our per capita foreign aid (http://tinyurl.com/26q6v2) is one fifth the per capita foreign aid given by Denmark and Sweden and one eighth the per capita foreign aid given by Norway."

First of all, this calculation does not include America's biggest contribution to foreign aid. It's called the US Department of Defense and it costs hundreds of billions of dollars per year. Through the DoD, we allow Europe, Canada and Japan to have minimal armed forces so they can afford their "free health care" (imagine what it would be like if they had to pay their fair share of defense), we bring relief supplies to tsunami and hurricane and famine victims, and, what is often ignored, we keep the sea lanes free, allowing global trade and avoiding an economic dark age.

Second of all, if we go by the narrow definition of foreign aid, developed nation governments "giving money" to developing nation governments, they're at best colossal wastes of money and at worst props to cruel dictatorships. I've spent 6 years in Africa and have seen these programs up close. Almost all the money goes into the pockets of administrators, contractors, consultants and the local country's ruling oligarchy. Less foreign aid and fewer trade barriers would do wonders for the developing nations. Certainly more than Norway's foreign aid contribution (paid for by North Sea oil), much of which goes down the World Bank/UN ratholes.

Third of all, I did see alot of good being done in Africa, work that actually helped the destitute and starving. Work done by private charities such as Save the Children, Christian Children's Fund, various Church groups and so on. And which country gives the most to charity by far, Stan?

"Believe it or not, we're a stingy country" says Stan. I say you don't know what you're talking about.

Posted by marsta | November 3, 2007 11:17 AM

A couple more comments to Stan

Stan asked: Ari, so we should abolish NSF, NASA, ONR, DARPA, NIH, NOAA, and all those other useless funding agencies?

Yes, absolutely.

About "foreign aid". First, statistics can prove anything. Yes, Stan, you are correct that our per capita government funded foreign aid is lower than other countries. On a per capita basis. Now, multiply that times 300 million people. Find out which country gives more foreign aid in absolute terms. There's one, and only one, answer to that question.

Next, do a little research on who gives the most voluntary charitable aid to foreign countries. I'll leave that one to you to figure out, I already know the answer.

Take your stingy theory, fold it up until it is all sharp corners ..... you probably know the rest of that.

Next, cathyf is partially correct about our health insurance system, but only partially so. The origin was during WWII. FDR's government had frozen wages, imposed wage and price controls and generally nationalized the private employment market. Much of that had been attempted in the 1930's and declared unconstitutional by the Supreme Court.

Then a war came along and FDR was able to achieve his goals. And then, with 12 million American men in the Armed Forces, there was a little problem called a labor shortage. Supply and demand kicked in and the manufacturers couldn't find enough workers. So, they asked the feds to allow them to offer "free" health insurance as an incentive in lieu of higher pay. The feds agreed AND gave those manufacturers a tax break at the same time. After WWII ended, health insurance as an employment benefit was viewed as a standard and enshrined in a tax system that is designed to bring about socialist outcomes.

A few more notes. Medical Student, the AMA monopoly being discussed is not on pricing and services, it is a monopoly on who can be a doctor. The AMA alone decides who can be a doctor and how many doctors we have. This has led to ridiculous glut/shortage cycles in doctors, among other things. And has ensured that market forces do not play a part in determining how many doctors we have. By the way, a shortage of doctors is what has made being a doctor lucrative. Perhaps there's a bit of conflict of interest there?

Stan's comment about how good VA and Military healthcare was prior to the current administration. What the heck are you smoking? I would love some, it must be really good. I served in the military in the 80's and 90's and I'm here to tell you that you have no clue what you're talking about. Oh, and the VA has been known for decades for having horrific medical care and hospitals. Try again, okay?

The points made about the US medical R&D market subsidizing socialized systems is absolutely correct. If we completely socialize the US system, we will eventually break everything. US wealth is underwriting Canadian, English, German, French, etc. socialized systems. A bit of research on where new treatments, equipment, drugs and tests are created and who spends the money to create them reveals this to be true.

One of the reasons that the US appears to spend more for healthcare per capita is the subsidy in the above paragraph.

Another reason is that socialized systems allow other governments to hide their true costs.

Our healthcare system in the US is broken because of too MUCH government involvement. More will make it worse, not better. I could go into that for a long time, but most of you won't believe it anyway.

On the topic of caring about others. I advocate a free market for healthcare BECAUSE I care, not because I'm heartless and cruel. It is heartless and cruel to socialize medicine and condemn people to the tender mercies of government bureaucrats and their decision making.

Something to think about. There is absolutely no proof that the government can do things better than individuals and free markets can. There is a huge amount of evidence that the opposite is true. If you think the government can do better, you do so based on faith, not evidence. I know another group of folks that takes things on faith that are unprovable. Secular leftists often make fun of them too. Hmmmmmmmm.

On a side note, for those who love FDR and wish for the good ole New Deal days, did you know that FDR greatly admired Mussolini and the Italian Fascists? It's in the record, look for the speeches extolling their virtues and advocating similar approaches in the US. Think about the implications.

Posted by Eric | November 3, 2007 4:31 PM

I will propose, however, that there is an alternative: suppose you decided not to get insurance, but you really really need care. Fine, you get a loan that covers the full cost of the care (let's say government-subsidized, same as educational loans, but still a loan), and then you pay it back. What is so hard about that? The family in your example that spent money on luxuries instead of insurance will just damn well have to sell those luxuries, and then work extra hard for a while and not buy any more luxuries in order to repay that loan.

No, there is still the problem of time and paying for your insurance before the casualty rather than after. To put it in terms that people understand better -- everybody understands that the decision to buy homeowners insurance is different after your house is already on fire.

Risk is best described by game theory, so I'll try to explain it in terms of a game with simple rules. Ok, here are the rules of the game:

1) The people in the game go into a spaceship, and the spaceship blasts off into space.

2) Tickets are for sale, which each have a number between 1 and 10 printed on the ticket. The tickets come in 2 colors, red and blue.

3) The blue tickets cost $10 apiece. The red tickets are free.

4) Everyone MUST take exactly one ticket, although they have a completely free choice as to whether to buy a blue ticket or to get a red ticket for free.

5) There is one of those lottery air thingys and it has 10 ping-pong balls in it, which have the numbers between 1 and 10 printed on them. (In other words, completely equal chance of 1/10th of getting any ball.)

6) Ok, the air machine gets run, and a ball pops into the chute. For the purposes of the example, imagine that the ball in the chute is the 6 ball.

7) So, here is how the scoring of the game works:

a) everyone who has a ticket, either red or blue, which is NOT the number selected by the machine is allowed to stay on the ship; (for example if the machine picked 6, everyone with 1,2,3,4,5,7,8,9,&10 stays.)

b) everyone who has a BLUE ticket (that cost $10) which has the selected number pays $100 and is allowed to stay on the ship;

c) everyone who has a RED ticket (the "free" one) with the selected number is executed by pushing them out the airlock with no spacesuit.

Ok, to review, there are 4 possible outcomes:

1) Pay $10, your number doesn't come up, you survive;

2) Take a free ticket, your number doesn't come up, you survive;

3) Pay $10, your number does come up, you pay $100 more, you survive;

4) Take a free ticket, your number does come up, you die;

The money collected from the blue-ticket buyers is used to buy oxygen so that the people still on the spaceship can breathe. A lifetime supply of oxygen costs $15/person, and it costs $5 to create each blue ticket. (It's a game -- we'll have to imagine that there are air filling stations out in space, and that there is something inherently expensive about tickets in space.)

And further assume that everyody on the spaceship has enough money that even the $110 is possible.

Ok, let's analyze the game... I hope everyone agrees that every rational player in this game with these rules will buy a blue ticket. I mean, a 1-in-10 chance of DYING that you can eliminate for just $10? Of COURSE you will take it. Which means the 9/10ths of the people remaining in the spaceship paid $10, and 1/10th of the people paid $110, and you have your $20/player and everyone survives.

Ok, let's slightly adjust the rules and see how that changes things.

Variation #1: every rule the same, except for 7c. In the new 7c, people who have red tickets with the losing number are allowed to stay on the ship if they buy a blue ticket after the number is picked and then pay $100. As ObsidianOrder describes this variation: suppose you decided not to get insurance, but you really really need care. Fine, you get a loan that covers the full cost of the care (let's say government-subsidized, same as educational loans, but still a loan), and then you pay it back. What is so hard about that? The family in your example that spent money on luxuries instead of insurance will just damn well have to sell those luxuries, and then work extra hard for a while and not buy any more luxuries in order to repay that loan. I hope everybody understands that in this variation NO rational person will buy a blue ticket. After all, if your number comes up you are no worse off (you pay $110 either way) and if it doesn't, you have an extra $10. So in this version, you only collect $10.50/player, and the air runs out, and everyone dies. My main point: before the ball is drawn, the value of a blue ticket is much lower in this variation than in the original game. Letting people pay after the uncertainty is gone is a HUGE change to the way that the game is played. It's not some "fair alternative."

The part which is so hard for people to get their brains around is that it's not just the red-ticket holders whose number comes up who are free riders in the alternative game, ALL the red-ticket holders are free riders. Before the ball is chosen, every one of those red-ticket holders has an equal chance of needing a blue ticket to survive, and every blue ticket has the same value.

Ok, take another variation. In this variation, the red ticket holders are allowed to buy blue tickets after the ball is chosen, but they'll have to pay more than $10 for them. If you raise the price of post-pick blue tickets high enough, you can make it rational again for people to buy their tickets before the drawing. Make it high enough, and you'll get everyone to buy before the drawing. This is like forcing uninsured people to pay $550 for an ER visit when the insurance company only pays $85 for an insured person -- it creates new incentives which make the plan viable.

If the free riders are allowed to escape death, then the value of the blue ticket goes down, for some people below $10. Then the total amount of ticket money (insurance premiums) collected isn't enough to buy air for the winners. So then the price of blue tickets has to go up. Which means that fewer people will buy the tickets before the ball is drawn, and so the tickets go up in price again, and ultimately goes into a death spiral and collapses.

This is the ultimate problem with free riders. If there is only one free rider, and he needs something he hasn't paid the premiums for, then you can always charge him a higher price. But if everyone is a free rider, and the drug was never discovered, or the surgeon never went to medical school, or the device needed to live was never invented, then NO price, no matter how high, will buy something that doesn't exist, and the person who needs that thing dies. So no price charged to the uninsured after the casualty is high enough -- because any price you could charge him would still be a better deal than dying. So no matter what the price, he's still at least partially free riding on others, and if it is not rational to be anything other than a free rider, then there are no others.

The big problem with insurance compared to the game is that the probabilities of getting sick are much lower than 1/10 like the game, the costs are much higher. It is a fact of human nature that people undervalue protection against a very low probability very high cost casualty. And every system that allows free riders to survive at all will collapse. BC presents this as if it were some sort of better scenario:

If one is concerned about poor little Timmy, who faces suffering and death as the result of his parents' idiotic decision to blow their income on frivolities rather than health insurance, then one is perfectly free to pony up as much of one's own wealth as one wants as a charitable donation. But stay the hell out of my pockets, you goddamn thieves.

No, the point is that in the game of health insurance, the "goddam theives" with their hands in my pockets are not just little Timmy's parents. Everyone who ponies up their own wealth as a charitable donation to Timmy, and everyone who, like BC, allows people to be free to donate to Timmy is ALSO a goddam thief with his hands in my pocket!

Posted by cathyf | November 3, 2007 5:36 PM

Something to think about. There is absolutely no proof that the government can do things better than individuals and free markets can. There is a huge amount of evidence that the opposite is true. If you think the government can do better, you do so based on faith, not evidence. I know another group of folks that takes things on faith that are unprovable. Secular leftists often make fun of them too. Hmmmmmmmm.

This is not true. I've already given a real-life real example above (forcing insurance companies to cover without exclusion conditions that the insured's previous insurance company covered when a person changes insurance) where taking away a very specific free right from insurance companies made insured people and insurance companies better off than the totally free system.

Because of the rules of game theory, there are very specific very narrow ways of restricting an otherwise free-market approach which will make everyone better off. Each one needs to be dealt with, and either rigorously proven or disproven. Categorically ruling ALL of them out without examination is based on faith, contrary to evidence.

Posted by cathyf | November 3, 2007 5:48 PM