A Government Healthcare Alternative

A few years ago I began to find the hard-core libertarian anarcho-capitalist advocacy to be getting sterile.  I would sit in some local discussion groups and the things we would argue about were so far outside of reality or what was realistically politically possible that they seemed pointless to talk about.  Taking a simplified example, baseball purists can argue all day the designated hitter rule should go away but it is never going to happen (players support it because it creates another starting roster spot and owners like it because it juices offensive numbers which drive ratings).  So I embarked on suggesting some left-right compromise positions on certain issues.

One result was my proposed climate compromise, which fit the classic definition of a good compromise (both sides don't like it) as many skeptics disowned me for writing it and the environmental Left campaigned hard against a similar proposal in Washington State.

I tried something similar with a proposal for restructuring the government role in health care.  First, I defined what I think are the two most important problems a government health care proposal has to address.  Most current and proposed plans fail to address at least one of these:

The first is a problem largely of the government's own creation, that incentives (non-tax-ability of health care benefits) and programs (e.g. Medicare) have been created for first dollar third-party payment of medical expenses.  This growth of third-party payment has eliminated the incentives for consumers to shop and make tradeoffs for health care purchases, the very activities that impose price and quality discipline on most other markets.

The second problem that likely dominates everyone's fears is getting a bankrupting medical expense whose costs are multiples of one's income, and having that care be either uninsured or leading to cancellation of one's insurance or future years.

I think the second point is key.  Everyone keeps talking about a goal of having coverage -- coverage even if you don't have money or don't have pre-existing conditions.  But that is not, I think, the real human need here.  The real need is to be protected from catastrophe, a personal health-care crisis so expensive it might bankrupt you, or even worse, might deny you the ability to get the full range of life-saving care.  Everything else in the health care debate and rolled up in Obamacare is secondary to this need.  Sure there are many other "asks" out there for things people would like to have or wish they had or might kind of like to have, but satisfy this need and the majority of Americans will be satisfied.

And so I proposed this:

So my suggestion ... was to scrap whatever we are doing now and have the government pay all medical expenses over 10% of one's income.  Anything under that was the individual's responsibility, though some sort of tax-advantaged health savings account would be a logical adjunct program.

I found out later that Megan McArdle, who knows way more about health care policy than I, has been suggestion something similar.

How would a similar program work for health care? The government would pick up 100 percent of the tab for health care over a certain percentage of adjusted gross income—the number would have to be negotiated through the political process, but I have suggested between 15 and 20 percent. There could be special treatment for people living at or near the poverty line, and for people who have medical bills that exceed the set percentage of their income for five years in a row, so that the poor and people with chronic illness are not disadvantaged by the system.

In exchange, we would get rid of the tax deduction for employer-sponsored health insurance, and all the other government health insurance programs, with the exception of the military’s system, which for obvious reasons does need to be run by the government. People would be free to insure the gap if they wanted, and such insurance would be relatively cheap, because the insurers would see their losses strictly limited. Or people could choose to save money in a tax-deductible health savings account to cover the eventual likelihood of a serious medical problem.

A few weeks ago I started reading the blog from the Niskanen Center after my friend Brink Lindsey moved there from Cato.  If I understand him, Niskanen has quickly become a home to many libertarian-ish folks who focus on real workable, executable policy proposals more than maintaining libertarian purity.  In that blog, Ed Dolan has proposed something he calls UCC (Universal Catastrophic Coverage) which would work very similarly to what I proposed earlier:

Universal catastrophic coverage is not meant to cover every healthcare need of every citizen. Instead, UCC would offer protection from those relatively rare but ruinous healthcare expenses that are truly unaffordable. (Note: As we use the term UCC here, it is not to be confused with the more narrowly defined catastrophic insurance that is available, in limited circumstances, under the ACA.)

Here is how UCC might work, as outlined in National Affairs by Kip Hagopian and Dana Goldman. Their version of the policy would scale each family’s deductible according to household income. The exact parameters would be subject to negotiation, but to use some simplified numbers, the deductible might be set equal to 10 percent of the amount by which a household’s income exceeds the Medicaid eligibility level, now about $40,000 for a family of four. Under that formula, a middle-class family earning $85,000 a year would face a deductible of $4,500 per family member, perhaps capped at twice that amount for households of more than two people. Following the same formula, the deductible for a household with $1 million of income would be $96,000.

The cost of the catastrophic policy would be covered by the government, either directly or through a refundable tax credit. The policies themselves could, as in the Swiss model, be offered by private insurers, subject to clear standards for pricing and coverage. Alternatively, they could take the form of a public option, for example, the right to buy into a high-deductible version of Medicare.

With UCC in place, people could choose among several ways to meet their out-of-pocket costs, which, for middle-class families, would be comparable to those of policies now offered on the ACA exchanges.

One alternative would be to buy supplemental insurance to cover all or part of expenses up to the UCC deductible. The premiums for such supplemental coverage would be far lower than policies now sold on the ACA exchanges, since the UCC policy would set a ceiling on claims for which the insurer would be responsible. If the supplemental policies included modest deductibles or co-pays of their own, they would be more affordable still. Although UCC itself would be a federal program, the supplemental insurance market would continue to be regulated by the states to meet their particular needs.

Very likely, many middle-class families would forego supplemental insurance and cover all of their routine health care costs from their regular household budgets, the way they now pay for repairs to their homes or cars. Doing so would be easier still if they took advantage of tax-deductible health savings accounts—a mechanism that is already on the books, and could be expanded as part of reform legislation.

The main thing that has always flummoxed me is that I have no idea how expensive this plan might be.  Dolan is claiming it could be done at reasonable cost.

As it turns out, the numbers don’t look all that bad. Because UCC leaves responsibility for routine care with individual families, in line with their ability to pay, it would be far less expensive than a system that offered first-dollar coverage to everyone. Hagopian and Goldman estimate that their version of UCC would cost less than half as much as the projected costs of the ACA.

The impact on the federal budget would be further moderated if the tax deduction for employer-sponsored insurance (ESI) were phased out as UCC came online. Tax expenditures for ESI currently cost the budget an estimated $235 billion per year, an


  1. Eau de Javelina:

    Excellent proposal.

  2. Another_Brian:

    The catastrophic coverage sounds good for medical expenses that are a one-time event which, after treatment, one can be said to be cured. But how would it handle a long-term/lifetime medical issue such as cancer, Parkinson's disease, or mental illness? For medical conditions with no cure, the expenses come from the ongoing treatment. If someone from the middle class family in the example ($4500 deductible) with an incurable mental illness has to purchase $1500 worth of medications every month, are they only responsible for those medications for the first 3 months of the year, at which point the UCC covers the cost for the remaining 9 months? At what point does the treatment stop being a catastrophe and start becoming a foreseeable medical expense.

  3. William Woody:

    Similar proposals have been made on the more libertarian-leaning right from a variety of sources. Tyler Cowen of "Marginal Revolution" has discussed a similar idea of universal government coverage for catastrophic expenses, and personal insurance or health savings for routine expenses. (For example, http://marginalrevolution.com/marginalrevolution/2013/06/options-for-health-care-reform.html or http://marginalrevolution.com/marginalrevolution/2009/11/what-should-we-do-instead-of-the-health-reform-bill.html) Note this is apparently similar to what is done in Singapore.

    Another idea is that private insurance only needs to cover a lifetime cap (of all medical expenses) up to (say) $1 million; all expenses beyond that lifetime cap are handled by the Federal Government through a taxpayer-subsidized insurance pool.

    The first time I've personally seen proposals like this were back in the early 2000's, and the idea is to essentially socialize those things insurance don't handle well but the government can: unbounded medical expenses by a handful of desperately sick individuals.

  4. William Woody:

    Most proposals I've seen essentially do away with pre-existing conditions, and some posit a lifetime cap above which the government covers all expenses regardless of the condition. So if treatment transitions to a foreseeable medical expense (such as dialysis for kidney disease) continues to be treated through private expenditures or through a combination of public and private sources until you reach the point where the government assumes the expenses.

  5. roystgnr:

    This would work great if all choices above that cap are set in stone: e.g. prices and success rates vary little between providers and will continue to do so as incentives are changed, there are no incremental quality improvements possible in exchange for ruinous expense increases, and so on. Which is to say, "if false".

  6. mx:

    While I applaud the concept here, the incentives seem off to me.

    The first is that first dollar and last dollar expenses are linked together. Your model provides some security for truly out of the blue events ("what if I get run over by an uninsured driver tomorrow?"), but it doesn't take into account the fact that first dollar expenses for preventative care can reduce last dollar expenses, especially when chronic conditions are involved. If someone has diabetes, you really want them to see their doctor as directed, take their medication, test their blood sugar regularly, etc... If they start skipping those steps because they can't afford it, the risk of complications increases, up to seriously expensive hospitalizations, kidney disease, dialysis, amputation, prosthetics, etc...

    Under your system, that preventative care is paid 100% by the patient, while the government will be on the hook for 100% of the expensive costs when the complications ensue. Insurance companies know this, which is why they don't try to stop you from using health care when you have a chronic condition; they often assign you a case manager and remind you to take your medication, keep your appointments, and do everything to manage it before it becomes more expensive.

  7. bloke in france:

    Car insurance is a good / bad example.
    If you can afford a $500 prang your insurance cost goes down compared to a motorist who culdn't find $500 straight out his wallet.
    So a franchise system benefits the rich. Which is not, if I understand it. the aim of social heathcare.

  8. ErikTheRed:

    The reason for the "purity-test-passing" hardcore libertarian / AnCap stance is because proposals like this never work out in the long run in practice. Once you've established a positive "right" to a handout, that positive "right" will get expanded and amplified until a catastrophic collapse occurs (where the hardcore libertarians / AnCaps fall down hard is that they can't figure out how our bullshit system manages to not collapse and they endlessly predict imminent doom, whereas if they actually *read* Mises instead of just referring to him constantly they might actually get WTF). Nobody has ever found a workable way to draw a firm line in the sand on these issues. Even if you pass a constitutional amendment, the government and courts will find a way to work around it or otherwise just flat-out ignore it (see: The New Deal, the Great Society, etc.).

    While it's unfortunate that he morphed into a raging Alt-Right asshat, Stefan Molyneux had a great analogy for this: the government welfare state is like a cancer. It wants to grow and expand very much like a cancer does. When people debate about how much government welfare to get rid of, it's as historically and praxeologically absurd as asking how much cancer you want to get rid of. If you don't get rid of all of it, it just grows back. The trick is you have to replace it with something else.

    From a market perspective, our biggest problem is grotesque over-reliance on Other People's Money. When you insert third-party payment systems you break the informational loop that allows free markets to drive down costs while improving quality (consumer preferences are constrained by their ability to spend, and the entrepreneurial function is to cram as much cool stuff as possible under that limit). Unfree markets are rule-based and bureaucratized - there is a perverse market incentive to drive costs up and increase the reliance on and overhead involved with rules compliance (as that maximizes profits / benefits for the providers). So we have alleged "free market" (ha!) Republicans and left-libertarians clamoring for more insurance or fixing welfare and / or insurance and / or whatever - but from a market perspective, welfare and insurance *are* the problem. The more of them you have and use, the more fucked up your market outcomes are. You can jump up and down and scream and shout and rant and rave and complain about it being unrealistic, but it doesn't change the way markets work. You'll have the exact same outcome arguing about the unfairness of the law of gravity. It's part of nature. Deal with it.

    Aside from the occasional progressive troll, pretty much everyone on this site knows and understands how markets work pretty nicely in areas of medicine that are not contaminated by insurance coverage and government welfare. The question is not how we fix third-party payment systems; it's how we transition away from them as completely as reasonably possible. This means taking a hard look at genetic diseases, lifestyle-related heath costs, and end-of-life care. We have a lot of societal costs associated with people making babies they can't afford. When you pop out a kid, you roll some pretty rough dice with regards to the possible outcomes. If your kid turns out to be expensive to maintain, that should be the parents' problem, not society's, and not just until they're 18 - it should be the parents' problem for as long as that offspring still alive. Take out insurance against *that*. If you think that's outrageous, then abstinence, birth control and / or abortion are probably right for you. Lifestyle-related illness is another thing. If you want to engage in unhealthy behavior, that's fine but it's on your tab. End-of-life care is easy to: if you're a person that other people find valuable - really valuable in the sense that they'll pay you well for doing what you do and not lip-service valuable in which they'll say nice things... and that's it. You take some of that value and set it aside to deal with your end-of-life care. Or, if you're all decrepit and broke and people want you around anyway (incentive for being an awesome person!), have them put their money where your mouth is. Put these three issues in their proper perspective (nobody owes you shit unless you've somehow been valuable enough to have earned it), and all of a sudden costs are manageable and insurance can be used in its proper place (tail-end-of-the-curve catastrophic events).

  9. Shane:

    The problem with libertarian's is that they miss the most essential motivation for human beings ... greed. Power is a form of greed and expanding the channels of power only creates more power. This is the same mis-guided thinking that the left uses when they advocate for the environment. If and when they get their pet projects in place they are immediately corrupted to expand governmental power or more exactly the power of the people both in and out of government that seek power's riches. This is the totally the reason that Rand created and developed the Wynand character. No one that is involved in the government is their for the sake of their constituents. Hardly, they have their own reasons and the more power that they are given only makes good people into bad or bad people worse. This corruption must be fought until the society can circumvent the corruption in some other way and make irrelevant and ultimately powerless these brokers of power and corruption. See AT&T. It is not that the libertarian's ideas are unworkable it is that they are a bulwark against creeping state power ... THIS IS THE ONLY THING THAT MATTERS. The state is as a group "stupid" and slow like a large corporation that has lost touch with it's customers. Our goal is to keep destroying the "good" sounding ideas that sucker people into letting go more of their freedom, and allow the disruptive things that destroy power come to fruition. Just like a central planner the government can't be everywhere at once and when they are lost fighting battles of esoterica they are not ruining the new ideas and technologies that will render their current power structure obsolete.

  10. isdfailsdfhih:

    Great proposal - I would take that any day.

    We've had 10k in uncovered medical expenses this year (samples sent to the wrong, out of network lab). The 550/month policy we have pays nothing and the agreement that we signed with the in network provider stipulates that the entire cost is our responsibility in full and out of network expenses do not count against the deductible, so this is on top of everything else. Adds up pretty quickly.

    I tried shopping or a policy that doesn't have this flaw and guess what? All the ones on our exchange don't limit OON.

  11. jon49:

    You would think this plan would cause the poor or marginally poor to give up working so they can get complete coverage, or discourage marriage for people with chronic illness. So, it would be smarter to have it graduated rather than just straight 10%, granted 10% isn't that bad even for the poor, I wouldn't think, so the effects would probably be worse for only the people are the very edges of poverty.

    I would prefer a system like this over what other countries do and what the US/state governments do.

    I wonder if it is pie-in-the-sky like the ideal though. Since it ignores politicians incentives to please everyone and give hand outs. It ignores the tragedy of the commons.

    Maybe it would be more realistic if the US had a fiscal crisis and had to cut back programs because it couldn't borrow or inflate itself money anymore like what happened to Canada.

  12. jon49:

    @ErikTheRed Do you have a blog? I used to listen to Stefan too, until I realized that he was a bit of a megalomaniac and authoritarian in his own right. I don't really agree with the idea of natural rights/law and the non-aggression principle. I think they are nice ideas and good to follow to a certain but not based on reality and it is basically a religion for libertarians. So, I guess I agree with Mises on that point (granted I haven't read much of Mises).

  13. mx:

    And what should happen to you if you should manage to procreate without purchasing the proper insurance first?

  14. bobby_b:

    There are great split-the-baby sorts of solutions to many of our current social controversies, but we have to get to a place where people can tolerate the ideas of others before we can even discuss them.

    As things stand, we don't seem to recognize that other people may have ideas that, while different than ours, have merit. There's only "us good people" on one side and "those evil bastards over there" on the other side.

    Until we get back to true civil discourse, you might as well try to find a middle position between "murder is bad" and "murder is okay." A middle position in that debate isn't like negotiating over a price, where a middle that leaves both unsatisfied is a good result. Only one side can prevail.

  15. Richard Harrington:

    Given that the left have redefined insurance as yet another entitlement, true agreement is probably not going to happen.

    However, I like Australia's take on health care - there's a social security-like tax on income that goes into a big fund to pay for health care. Pretty much all the necessary stuff is covered. Unlike the Canadian system people can get additional insurance to cover things like private hospital rooms or expedited electives. People seem to like it. You can actually walk into a doctor, get treated, and leave without filing any paper work.

  16. GoneWithTheWind:

    If you make a contract and spend your entire life paying into a system to uphold your end of the contract should some legislator or the government be able to negate that contract on the day you retire leaving you without health care? I.e.: "scrap whatever we are doing now and have the government pay all medical expenses over 10% of one's income."

    Should middle class workers pay an ever increasing tax to pay for non-workers and immigrants (legal and illegal) who come here for our welfare/free health care? How does this make any sense in a Democracy where we cherish freedom. You would make slaves out of the productive people and make princes of the city out of the indolent welfare bums. But of course you are spending other people's money with the best intentions, right?

    I have a revolutionary idea. Let people make their choices and reap the benefits of those choices. If you choose to be lazy you get nothing. Stop trying to solve the problems the welfare bums bring on themselves by not working and doing drugs.

  17. jhertzli:

    A type of insurance that may become necessary but that the statists will try to ban: Insurance against catastrophic expenses that the State decides not to cover. You can think of this as Charlie-Gard insurance.

  18. kidmugsy:

    You've misunderstood the Charlie Gard case. It wasn't about the State deciding anything about expenses: his doctors thought his treatment futile and distressing to him. They went to court for a ruling. The High Court, Appeals Court, Supreme Court, and European Court agreed with the doctors. If he'd been in a private hospital the same law would have applied.

  19. jon49:

    @mx in a free market solution to health care you would see costs of delivery be from $0 to who knows how much depending on complications. You would see doctors give much more in free care than they do now (like they used to). So, the answer is, it depends.

  20. Patrick Henry,The2nd:

    As a hardcore libertarian, I hate it. As a compromise to get us to where we need to be, I love it.

  21. Max Bnb:

    The central problem with the Chicago School economists is that they
    believe in efficiency, even to the exclusion of liberty. They are
    pragmatists. They believe that the civil government can adopt
    pseudo-market programs that mimic market choice despite the existence of
    government force. Time after time, they come out with positions that
    sound like piecemeal socialism.


  22. Mercury:

    Again, I don't see how this moves the needle much in terms of EXPANDING SUPPLY. Free this, magic that, presto-change-o, the same number of doctors and medical infrastructure is no stretched over a wider area with even better outcomes! Please.

    First of all, a reminder, health insurance is not the same thing as medical care you need, WHEN you need it. I'm sure you can find plenty of examples of pre-Obamacare patients with no insurance who received better medical care when they needed it than they (or others like them) did after the government mandated that they have insurance and provided some sort of plan for them.

    All Obamacare and every other US healthcare plan idea does is reshuffle the same, pretty much static amount of HEALTHCARE SUPPLY around by various mechanisms. Plus, Obamacare probably discouraged many good, capable people from getting into medicine in the first place and encouraged others to get out or retire early.

    Everyone's worried about automation and robots taking away jobs right? Gee, what industry has UNLIMITED DEMAND, probably forever?
    Hmmmmm.....I know! healthcare! Not everyone can be a doctor of course but obviously we need more nurses, technicians, probably every kind of tech-worker there is, elder care workers, therapists etc. etc. How much better would it have been if Obama (damn is putrid heart) instead launched a 1930s style public initiative to greatly expand the medical care industry and launch all kind of incentives for private enterprise to jump on board too?....building medical schools, facilities, R&D, re-training programs?!? Options would expand, new discoveries would be made, prices would come down and there would be many more ways to accommodate the indigent and those with pre-existing/chronic/expensive conditions. It could be America's 21st century crown jewel.

    Instead, Obama just waved his wand, gave everyone "coverage" and declared victory. Now, everyone else is fighting over the wand as if it's really magic.

  23. Jesse Nelson:

    I don't think greed is ignored by libertarians, it is that greed can be harnessed in a coercion-free environment to actually cause good things to happen. Greed in an environment of political power (otherwise known as the power of coercion) in some area of the economy causes prices and supply of basically anything to become expensive and/or scarce.

  24. Jesse Nelson:

    I think Warren's identification of the two main problems is mostly correct but frankly they are linked. The first problem has largely resulted in, or at least greatly exaggerated, the second. We need market forces to apply to major medical procedures, ICU care, quadruple bypass, cancer, lengthy intensive rehab and other similar issues as well as everyday care. Prices on the everyday incidents has certainly risen very sharply and way above any reasonable estimate of general inflation, but are still somewhat within the realm of affordability for a large portion of the population. Major medical catastrophes and care for such has gone pretty much parabolic. My dad has a good government pension and social security, as well as significant retirement savings, but the bill for his recent quadruple bypass (we never saw it) was rumored to be upwards of half a million and would still have wiped him out, though his total time in the hospital for this was about 5 days. Though it's not exactly simple, this is such a common procedure with such good survival rates these days that if market forces were allowed to operate, the price would almost certainly come down by a huge amount. When people do see the bills for these types of things, you find line items at wildly inflated prices, as if a 25-cent tablet of ibuprofen suddenly becomes a $50 tablet of ibuprofen when delivered by a nurse in the ICU. Without a functioning free market, this won't change.

  25. Shane:

    Greed happens in every aspect of human endeavor. Because of that there can be no coercion-free environment. The best we can hope for is a war within the greedy in power, battling it out with each other while the rest of us go about our business. This is the frustrating thing about libertarians (and the communists that we point our fingers at) we make assumptions that in some aspect humans won't be greedy (the government) this is a pipe dream and will never work. Humans will always be greedy and will always seek power no matter how many examples of the short sightedness and the destructiveness that greed causes. Sorry to rain on your parade, the government (and everything humans touch) will be corrupted.

  26. Shane:

    News flash SS is a tax. You didn't pay into it any more than I "paid" into building of roads. You pay taxes at the convenience of the government and when the government doesn't want to pay for roads, retirement or health care it won't. There is nothing that you can do to stop them. Better for you to keep your money and do what you deem relevant with it, than to get some vague promise from some politician about what he is going to do with your money no matter how tempting his promise's may seem.

  27. Shane:

    And just like public schools when the political winds change then the government will see this big expense as something they don't want and divert funds away from it. Happens EVERY SINGLE time the government gets involved.

  28. Jesse Nelson:

    This is the attitude that Warren is responding to. While I'm sure you and I would love to see your rather pure idological position come to pass in the area of health care (and all other areas) there is always going to be a (probably much larger) chunk of the population that does not see things as you do. For the sake of at least working towards free-market goals, sometimes compromises have to be made, or you move the needle zero and just complain about how stupid everyone is in the comments section of a libertarian blog. I can at least understand his point. ErikTheRed had a little better argument comparing socialism to cancer, either you cut it all out or you don't do any good in the long run. But you might gain a smaller, temporary victory, and this might go a ways towards convincing a measure of folks on the other side to re-think things and possibly have more allies in another battle about this down the road.

  29. Jesse Nelson:

    I certainly agree that greed is a standard human condition and everyone has a measure of it, greater or less, the question is can someone limit their motivation to try to satisfy it through their own work and mutual agreement alone, or does their greed extend to getting what they want through using force on others to take it? That there will always be some people that choose the latter, and some of these we call "politicians", I guess you're correct, it's not like we are going to be rid of the government anytime soon.

    An anarcho capitalist society is a pipe dream to be sure but it's not like it ignores greed, it just limits it to be satisfied without using force. You simply have to offer everyone else a better choice.

  30. Brad Warbiany:

    Really? My experience is that when it's something that people like (such as schools, or healthcare), government money tends to flow *towards* it. I.e. no politician wants to be the one that tries to pare back your healthcare.

    I.e. in the liberal mecca in which I live (California), they've even mandated that 40% of government spending MUST go to education.

    The problem (as Warren points out often) is that typically those government funds can tend to cause huge bloats in the BUREAUCRACY associated with the system, rather than going to the intended recipients of the money. I.e. in the educational system we get layers of administration and middle management instead of more teachers and better facilities.

    Edit -- And that leaves out the bloated [and unfunded] pension/retirement systems that frequently occur in government employment. Point being that although the systems are bad, they are not diverting funds away from the systems.

  31. mlhouse:

    First things first. We need a proper transition program from ObamaCare.

    You start with repealing the individual mandate (which I actually support in theory) and the employer mandate.

    Then you address how transitional coverage is going work. THis is a critical step because these health insurance policies are binding contracts. As an example, lets say that you are covered under an ObamaCare individual/family plan and after the purchase of this policy you were diagnosed with cancer? Clearly even the staunchest libertarians understand that you can't simply say, ok, your coverage no longer exists, good luck finding a plan in the future with your $300,000 in costs associated with it.

    Then you address the market changes that need to be made: eliminating state lines and regualtions to make the markets truly work,and create competitive products that consumers in the market really want.

    I also think that the national government should create a high-risk pool that some states had before ObamaCare, directly subsidizing this market for the costs of preexisting conditions.

    Once these steps are done, then we can look at the next steps of reformation, like eliminating the employer provided health insurance model.

  32. Shane:

    Sadly "better" choice is something that is individual and cannot be calculated for any human being by anyone other than themselves. When someone wants something and force is an option very few people have any compunction whatsoever about using force to get it. All we have as libertarians at our disposal are good arguments. History has shown that on a long timeline this can be enough. Sadly many will die in the process and I am ashamed to say that nothing will really stop it. The only hope is that we can outrun the bad with the good and the best way to do that is with solid reasoned arguments, not moral comprises for the sake of expediency.

  33. Jesse Nelson:

    Yes, and of course I was encapsulating the idea of a "better choice" within the NAP, theoretical ancap society. Better choices offered by the free market (which, also sadly, is unlikely to ever exist again in the area of health care.)

    It is truly regrettable that in a market that people don't think of as "essential", such as, say, televisions, I paid $2000 for a really nice TV in 2007. That TV died 6 months ago, now I have an even larger 4K smart TV that is better in every single way that was $599 at Walmart.

    If health care were allowed to operate in a true market like this, maybe heart bypass surgery and cancer treatment wouldn't be a ruinous expense. The people that engineer TVs like I described have to be pretty damn smart even if they don't open people's chests. The only difference is that people choose to get a TV and could (conceivably) live without it and don't choose to get heart failure or cancer. Unfortunately people think that since they didn't choose it, they are entitled, and therefore politics (force) comes into play, ruining market operation, which (they don't think about this) causes more problems and less potential care in this area for everyone.

  34. GoneWithTheWind:

    You hear that and similar comments often and I'm sure you believe that simplified version of SS. But it was indeed sold as a contract and sold as your contribution would be held in your name and you get it back when you retire. It could well be that in the future your exact scenario plays out and SS/medicare is scrapped and all those retired people who contributed were just suckers. It could! But will it??? All that is needed is 5 Supreme Court justices agreeing it was a contract and cannot be unilaterally canceled. In my state the state government has been slapped down by the state supreme court a couple of times as they tried to make unilateral changes to the state run retirement system. The courts have upheld the contract and the state has no choice but to comply. I bet when the state tried to change things someone, like you perhaps, sold them the argument that they could get away with it. They didn't. Until the Supremes decide we don't know the answer.

  35. phwest:

    A foreseeable expense that you can't possibly afford is still a catastrophe. Some involve $500k in a year, some $500k over 20 years. For someone at the median household income (low-50s), both are equally unaffordable.

  36. marque2:

    Western "Greed" for goodies and money is not necessarily the normal for human beings. This is a mistake by libertarians, and the globalist elite alike. They look at these third world countries and think, if we could only bring people from there to the US, educate them and show them that they can buy stuff - they will someone change their viewpoint about the USA, or about starting wars, being mean to women, etc. Hence the unfettered open border stance by the elites.

    There are quite a few people out there who are much more strongly devoted to their religion, and could care less about our fancy stuff, except as a way to advance their religion. Sometimes this is relatively positive - like monks in the mountains trying to self actualize. Sometimes it is negative, when folks want to violently promote their religion through war and suppressing women, minorities, and their fellow citizens with threats.

    I am sure there are other things as well that certain societies value more than money, as well.

  37. marque2:

    There is also an issue of being a captive audience. For instance, you don't really get to choose a location/ pre-negotiate / whatever when you have a heart attack, unless you want to live your life next to the facility you choose. My dad came to visit me last year and had a heart attack. Not only didn't he get to choose his local facility, he didn't even get to really choose where the ambulance should take him. There is a heart specialty center close by, but it was another half hour trip - better go to the close place.

    In these situations, one could get reamed for medical expenses, especially under a libertarian scheme, where you have no protection against predatory practices, especially in an emergency.

  38. marque2:

    You don't necessarily have to increase supply if you reduce demand. And reducing demand doesn't necessarily mean that you have worse healthcare - it means people become more selective about when to use medical services. When I was a kid, most of the time I had a cold, I had to tough it out, unless something were really bad. Today, any kid with the sniffles goes to the doctor, or even the ER, with some of those union medical plans.

  39. marque2:

    You might try a Healthcare ministry if you are in relatively good health (other than this year's expenses) I only say relatively good health because they tend not to cover pre-existing conditions for two or three years. Here is the one my family is a member of. They tend to be religious, but this one doesn't require you be any particular religion, as long as you can abide by the religious tenants (Per Galatians that you are willing to share medical expenses) It is similar to the atheist agreeing with the religious tenant "thou shalt not kill"


  40. DanSmith:

    My comments are based on my 30 year care in primary care medicine. I began my career as a proponent of the then-revolutionary HMO concept, which held that self-interest on the part of patient and physician could work together to produce good outcomes. A capitated fund was supposed to pay for medical care and the physician would keep the unspent balance. Preventive care was the engine that supposedly drove the train. In reality what happened was that patients needed constant nagging to follow through on preventive care measures. Lifestyle change was a major obstacle. Type II diabetes is a metabolic disorder than can be controlled by weight reduction and exercise, plus medication. The first two parts seemed inordinately difficult for patients to get their arms around. Diabetes doesn't hurt much until the latter stages arise. By then preventive measures don't help. Physicians in HMO plans were incentivized to discourage over utilization of resources, a fact that patients knew and resented. Instead of being partners, we became adversaries. Patients would game the system by trying to get out of network referrals, to have chiropractic services paid for, enroll after an expensive condition was diagnosed, etc. First dollar coverage for "preventive" care is a nice concept but I never saw that it was effective. A well trained paramedic with a blood pressure cuff and a blood glucose monitor could accomplish it without the need for a physician. What's missing is motivation for people to change behavior. Transplant surgeon Dr. John Najarian said "I never met a patient who didn't want to live another day." So the marginal cost of health care goes through the roof. No one wants to be the bad guy who tells a patient, you didn't listen to our advice, so suffer the consequences or pay the bill yourself. The Coke and Pepsi political parties want to give coverage to everyone. It's not possible. Rationing occurs through price or by government dictate. Medical care is a finite resource and the reality is that we will all get sick and die.

  41. Shane:

    These type of government programs are always sold as a benefit of some sort that is why they get passed but they never are. I would never want my future left in the hands of the political class who's loyalties change with the wind. Now would I want to give power to some bureaucrat that can bend that power to his/her own will. This is always my problem with the government, they dupe people into believing that they are getting some sore to of "benefit" and then change that to enrich themselves and expand their power.

  42. Shane:

    Ask yourself does the money really go to education or does it flow through education to something else. This is the bait and switch that the government pulls constantly. In Russia older people that would fly to America would be asked if they would like to immigrate to America. The reason was that Russia did not want to pay for them in their old age. The Russian government would never remove the veil that if you work hard during your lifetime you would be taken care of in your old age. So the lie stood. All the while the Russian government used other tools to limit the amount of "care" it provided it's pensioners and diverting the other funds to cronies pockets or pet projects designed to make the politicians look better and keep them in power or expand their power. It always works this way in everything the government does.

  43. Maximum Liberty:


    I'd say that the political debate reveals another political preference, in addition to the two you name.

    The third preference is that very poor people get some level of coverage from the first dollar, because (the belief is) they would otherwise not get basic care at all. I'm not expressing that preference myself, only noting that it exists.

    One of the suggestions in comments was that preventative care be funded from first dollar. This would only address part of the expressed concern. The other part is that routine medical needs would go untreated, so would (a) get worse (e.g., bladder infection becomes pylonephritis) or (b) last longer than necessary (e.g., bacterial sinus infection causes 4 days off work, instead of 1).

    I'm not aware of any studies that show the extent to which very poor people would have to forego treatment under these circumstances. It is hard to think of how anyone could conduct a natural experiment on it in the US, given the omnipresence of Medicaid. One key question would be the degree to which charity would fill the gap (either through organizational funding or through free services from health-care providers).

    I think you approach handles this partially (or maybe fully) by tying the benefit to income. Presumably, someone with zero income would thus have first-dollar coverage.


  44. ErikTheRed:

    You get stuck with the bill, forever. Why should procreation be any different than any other risky activity? Because Jesus said so? Fine, let Jesus pay the tab. See where that goes.

    Societies have put baby-making into this strange and exalted category based on millennia of training people to spam out new members of their tribe as early and as often as possible. This is rational if you're in a pre-industrial society that doesn't strongly value individual life, is competing for cultural survival and / or domination, and where people are unable to accumulate wealth and need to be provided for by others in their old age

    It makes far less sense in a modern world where people pay lip service to the notion that "life is precious" (I'd love to live in a world where it actually was), unless you intend conquest by outvoting other tribes (this seems to be a Muslim thing right now, and another reason why deciding matters by voting is generally asinine). People seem to be slowly figuring this out on their own - putting off having children until they're in their 30s or even 40s, where their lives are more stable and established (well, hopefully) and they've accumulated significantly more wisdom (well, hopefully).

    In any case, that's where a lot of risk in society originates - people making kids they can't afford. Not just fiscally, but temporally, emotionally, intellectually, etc. If you have a support group - family, religion, service organization, or just pure old-fashioned insurance pool that's willing to commit to the risk with you, then so much the better. But look at the bullshit we just accept as normal: mentally-disturbed homeless people everywhere, special-needs kids with no special funding, parents that would rather work more hours and have a nice huge house than spend time actually raising the kids they pretend to care about, kids fucked up on drugs because their parents raise them to be emotional cripples (yes, that's the parents' fault, not the drugs' fault), spoiled kids whose parents throw money at them instead of attention, etc., etc., etc. Enough already. It's a huge, expensive commitment on every level imaginable. If you're up to it then wonderful, go to town, knock 'em out every other year if you feel so inclined. Otherwise, quit being a bunch of welfare whores pawning your mistakes off on the rest of the planet.

  45. ErikTheRed:

    I don't have a blog. I tried it once (back when my thinking was much less-developed - I cringe when I look), but I just don't have the time to crank out rants (errr.... thoughtful pieces) on anything approaching a regular basis.

  46. ErikTheRed:

    This argument is such an epistemological mess I barely know where to begin. The word "greed" is used to conflate and obfuscate so many different concepts that the entire piece is about half a notch above word salad. There is a basic human desire to obtain ease, comfort, and satisfaction with minimal effort - this is one of the cornerstones of Mises's praxeology. There are many ways to fulfill these desires, but they can generally be broken down into two categories: free trade and coercion. Progressives twist this by shifting the focus to quantitative rather than qualitative results, and unfortunately this has become the vernacular. It's become such a broken word that it's close to useless for serious discussion, very much like "capitalism" (a word popularized as a pejorative by Karl Marx). If you let your opponents define your vocabulary, you're pretty much screwed right from the outset. So don't.

    Power is in no way the same as greed, although lust for power through minimal effort is almost universally associated with coercion on a practical level. Plenty of people obtain power through honest means and use it wisely and kindly. I'm working with the head of a corporation right now that's going through a difficult situation, and their heartfelt priorities lie almost entirely with minimizing the impact on their employees. Yeah, these people do actually exist (shame there's not more of them).

    The notion that everyone in government is corrupt and only looking out for themselves is also nonsense. There are plenty of people who are convinced they are doing the right thing, and this makes them all the more dangerous. The entire essence of government is a monopoly on the ability to initiate force (coercion) in a geographic territory. That's it. Nothing more, nothing less. If you consider that acceptable, then the questions become "Where do you draw the line between what's an acceptable use of coercion and what isn't, why do you draw it there, and how do you draw it?" Some libertarians argue that you can't justify any of it. The argument against is built on several notions, including the principle of self-ownership and the principle that you can't delegate authority that you don't individually possess. The arguments for basically boil down to various forms of "might makes right."

  47. herdgadfly:

    The concept that put America on top of the economics ladder was "Free Market" which at one time worked for health care. services functioned as a Doctor Patient relationship. Services provided by the medical profession were performed and remuneration was often based on the abiltiy to pay. Back when I grew up in the '40s and '50s, doctors got paid in fresh meat and produce from farms when all else failed. Few people had insurance that covered much.

    Then came the unions and employer-based insurance, and socialism was alive and well. Later we had to bring the boys home from the war and the VA snake appeared. After LBJ's Great Society became comfortably installed, the providers and insurers got their heads together to watch each others backs and going forward, the system protected and expanded profits. In the meantime rules changed to get more benefits from that new thing called Medicare and payroll taxes went through the roof.

    Now nobody was paying medical expenses directly and doctors you-never-heard-of were billing your account. Obamacare and the abandonment of insurance principles, where nobody paid more for being afflicted and historic age patterns affected nothing. Twenty years to go and full socialism will be here when the Medicare costs are no longer covered by payroll deductions. But strangely enough health care was 1/6th of our economy and new heath care facilities were popping up everywhere - and nobody asked who was paying in all this capital.

    So we have to go back to paying in goats milk and hamburger or whatever it takes to end this slide.

  48. Shane:

    And I am clearly noting that you do nothing to "untangle" any of the word salad. Is it because it is beneath you and you can't be bothered to even provide word definitions of your own? Here are mine. Greed is when someone takes action in the short term which causes ease, comfort and satisfaction, but which in the long term cause detrimental consequences that negate the quick gains made in the short term and adds destructive consequences in the long term. Power is a form of greed which places one person in position to make another person do things which they would not otherwise do. Once again this creates tangible short term benefits but will harm and negate the short term benefits while adding detrimental consequences in the long term. In no way is power ever beneficial, because one party is always harmed. If a person agrees with the "power" placed on them then it is no longer power it is a trade because for whatever reason the person accepting the power finds the arrangement to be beneficial.

    If you think that people don't act in their own best interests you live in a world of rainbows and unicorns. No human being on this planet will act in any capacity other than that of their own selfish interest no matter how perverted (to others) those interests might be. EVER. That their interests may counterproductive or even destructive to their own lives changes nothing of the fact that people always act in what they believe to be their best interests. People say a lot of things and they work very hard to make you think that what they say or do is heartfelt. You may even believe them. You shouldn't. Because what a person's motivations really are you can only guess and this colors everything that they "believe" and everything that they do.

    Not sure why you included the last paragraph it kinda meanders off into the distance and I am going to be a douche here, seems like a load of bullshit to make you feel superior to me.

    I am not sure if you meant to offend but, being condescending and arrogant without taking any effort whatsoever to streamline your own arguments seems like the work of either a troll or a self possessed cock that thinks that their are an intellectual giant. Your whole response screams virtue signaling, a distasteful practice that belies a fundamental lack of understanding on the person doing the signaling. And of course why wouldn't it, the person has no interest in what is being signaled only in what other people think of the signaling.

    Please, if you want polite discourse ... be polite. If you want a flame war then flame on.

  49. Shane:

    You throw out a bunch of big words and then tie them all together with the conclusion of word salad. I am not going to bother to even address anything you have said because you never once refute or provide any counter arguments. Simply put you have said nothing. If your goal was to humiliate me in front of others then maybe you should try another way of accomplishing that. If your goal was to make yourself look better in front of others then maybe you should reflect on why this is necessary for you to do this. Either way what you said was arrogant and condescending, and you know it. Virtue signaling is detestable, no matter where it comes from.

  50. ErikTheRed:

    I use precise words with precise meanings to convey precise thoughts - pretty much the opposite of your approach. There's no response to your "argument," because you didn't make one. The only thing I get from your response is "I'm butthurt. Please go away." If you feel that strongly, then DIsqus has a block function.