Monday, February 26, 2007

Out Sick Part II (More On Health Care)

My girlfriend and I actually had quite a debate about health insurance the other night. The contentious subject was a relatively small one- basically I believe that a return to a more free market oriented health care system would help reduce health care costs and as part of that strategy, routine doctor visits, and other forms of routine care should be paid for out of pocket rather than via insurance. My girlfriend disagreed, fearing that many people would not be able to afford these routine medical costs- that even if people were to pay less in health insurance to begin with, they'd spend that money in other places and have trouble affording trips to the doctor.

My girlfriend did agree with me, however, that people should have more choices when it comes to what health insurance does and doesn't cover. Which ultimately would be my point. I think our disagreement just stemmed as to just how an increased number of choices would actually play out. (There's also a fundamental disagreement as to the question of whether poor people are capable of running their own lives, but that's a subject for another day.)

But back to my earlier discussion about health care. Today in the United States, we don't have a true free market in health insurance. We have health insurance that's regulated by laws at the state, federal, and local levels, laws that restrict what types of insurance you can provide and laws that impose numerous policy mandates. This isn't intended to be a study of health insurance law- it's just important to note the fact that the market we have is severely limited. A truly free market in health insurance would lead to the sort of discussions I had with my girlfriend. You can debate all day, but ultimately, the market- and individuals shopping in the market- would decide on the best health insurance plans. Should you just get catastrophic coverage, should you have certain types of prescription drugs covered, should you have routine doctor visits covered, and, what the heck, should your insurance pay for your aspirin? People could chose the plan that best fits their needs and pay for that plan accordingly.

Of course, this raises questions about "fairness." The article I linked too on Friday contained the following recommendation from a commenter:

The health insurance system in this country needs to have two levels: (1) Level one is a universal, government sponsored accident and sudden illness insurance program; (2) Level 2 is private insurance for all preventable illnesses (like lung cancer from smoking; cirrhosis of the liver from drinking) that is paid for by the individual and sponsored by the private insurance companies.

This is the only workable system, with a role for government and the market.

What a great idea ... Except for the fact that it doesn't work. For one thing, there's no fine line between level one and level two- in fact there's no real line at all. Some smokers don't get lung cancer ... and plenty of non-smokers do get lung cancer. And how many cigarettes do you have to smoke before you become a smoker who's lung cancer won't be covered by the state? 10? 100? 1,000? Science can tell us what puts us at greater risk for cancer, but science can't look back and tell us definitively why someone developed cancer.

Any form of universal coverage is bound to have these sorts of problems because decisions have to be made about what is covered and what isn't. And remember, I'm not talking about the sorts of disputes we have today about whether a particular procedure was covered in an insurance contract (disputes are an inherent part of insurance contracting, which is why I think we're better off getting away from insurance as a means of providing health care in the first place.) The decisions I'm talking about our the decisions about what goes in the contract in the first place- that is, if the government is our insurer, what exactly are they insuring us for? These are the same questions I raised before- catastrophic injuries, routine doctor visits, aspirin- what exactly is covered?

And are we better off having the government decide what's covered than we are making those decisions for ourselves? Why is it that a trip to the doctor might be covered, but certain forms of self-medication might not be?

Let me stress something here- my opposition to universal health care has nothing to do with government assistance for the poor. A fully functional free market system would be compatible with government refunds or grants to the poor for medical and health expenses. My opposition to calls for universal health care stems from the point of view of efficiency and more importantly, an anti-nanny state point of view. The minute the government becomes the sole health care provider, the government has a vested interest in our individual lifestyles. From that point on, society would have an interest in controlling, limiting, or taxing activities that are deemed to be unhealthy. And that, more than anything else is what scares me, because that is not freedom.


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