Ending Employer-Based Health Insurance Is a Good Idea

But do we really need a new regressive health insurance tax?

Ronald Bailey | October 16, 2007

"The U.S. employer-based health-insurance system is failing," declares a new report by the Committee for Economic Development (CED). The CED is a Washington, D.C.-based policy think tank comprised of business and education leaders. And it is right: Employer-based health-insurance is indeed failing.

Between 2000 and 2007, the percentage of firms offering health insurance benefits fell from 69 percent to 60 percent. The percentage of people under age 65 with employer provided insurance dropped by 68 to 63 percent. In absolute numbers, those covered by job-based insurance fell from 179.4 million to 177.2 million.

Employers are jettisoning health insurance because costs are out of control. Since 2001, premiums for family coverage have increased 78 percent, while wages have gone up 19 percent and inflation is up 17 percent. The consequence is that health insurance is the number one domestic policy issue in the 2008 presidential race.

So what is the CED's prescription for our ailing health insurance system? The report promisingly begins by recommending the creation of "a system of market-based universal health insurance." In order to achieve this, the CED would make health insurance mandatory for every American.

The CED proposal envisions the creation of independent regional exchanges that would act as a single point of entry for each individual to choose among competing private health plans. The exchanges would set minimum benefit plans. The exchanges would also cut through the thickets of state health insurance regulations that add substantially to the costs of insurance. Individuals could purchase insurance above and beyond the minimum benefit plans with after tax dollars.

Insurers would be required to take all individuals regardless of prior medical conditions. In order to prevent adverse selection spirals, the exchanges would also do risk-adjustments by transferring some of the premium revenue from insurers that had enrolled more good risks to those who enrolled more poor risks. Consumers pay a price an insurer would receive had it enrolled an average population of risks. Something very similar is already done in Switzerland's mandatory private health insurance market.

So far, so good.

Unfortunately, the CED proposals go quickly off the rails when the group recommends that every household receive a fixed-dollar credit sufficient to purchase an approved low-priced quality health plan. This health insurance credit would not be means tested and would be financed by some kind of broadly based tax—perhaps a payroll, value-added or environmental tax. Such taxes, like Social Security and Medicare payroll taxes, are likely to be regressive, which means the poor will pay a larger percentage of their incomes than the rich. In fact, two-thirds of taxpayers paid more in social security and Medicare taxes than they did income taxes.

For example, today every wage-earning American pays a Medicare payroll tax of 2.9 percent. That tax is supposedly divided so that employees and employers each pay 1.45 percent. Of course, employers would give employees the other 1.45 percent if they were not paying the tax, so in reality the employees are paying the whole tax. The same thing goes for the Social Security Ponzi scheme.

The CED proposal is chiefly a ploy to get employers out from under the increasingly heavy burden of buying insurance for their employees. That's a laudatory goal, but it shouldn't be done by imposing yet another tax on employees. The good part of the CED proposal is that employees would purchase private health insurance in a competitive market. If households could find a policy for cheaper than the credit, they could pocket the extra money for themselves. The CED argues persuasively that this kind of competition would tend to keep health care costs down.

But why advocate a tax to pay for the credits? One advantage of such a health insurance credit is that it would avoid the administrative and enforcement costs of coercing people to buy insurance. Such enforcement has proved problematic in other insurance markets. For example, although auto insurance is mandatory, more than 14 percent of motorists are uninsured.

However, there is a better way to expand private health insurance and to obtain the benefits of competition as a way to keep medical spending down. First, retain the CED proposal that health insurance be mandatory. But, instead of a new tax, allow employers to hand over the money they currently spend on health insurance to their employees in the form of money wages. Then, in order to create a level playing field, expand the current tax exemption for employer-purchased health benefits to all individuals. Maintaining the tax exemption helps enforce the mandate because taxpayers will have to report annually how much they paid for their health insurance when they pay their taxes.

What about the poor Americans who do not make enough to afford medical insurance? Give them vouchers to buy private medical insurance and pay for the vouchers by abolishing Medicaid. In 2005, the Federal government and the states spent $316 billion on Medicaid to cover around 17 million households. That works out to about $18,500 per household per year. The annual premium for family coverage in 2007 averaged just over $12,000. Due to increased competition, average premiums for the minimum private plans will drop. This means that some money should be left over from Medicare to pay for the currently uninsured poor. There will be some administrative costs involved with determining voucher eligibility, but the health insurance vouchers themselves would essentially be self-enforcing. The experience of Switzerland, in which nearly one-third of the population receives subsidies to purchase private insurance, suggests that very few would fall through the new health insurance safety net.

Despite its flaws, the CED proposal avoids the huge mistake of centralizing health insurance through a single government bureaucracy. The CED report correctly concludes that "Market-based universal health insurance, with individuals choosing the health plans and delivery systems that they deem best, shows great promise—much greater than any alternative."

Ronald Bailey is Reason's science correspondent. His most recent book, Liberation Biology: The Scientific and Moral Case for the Biotech Revolution, is available from Prometheus Books.

Comments

|10.16.07 @ 1:45PM|#

"The report promisingly begins by recommending the creation of "a system of market-based universal health insurance." In order to achieve this, the CED would make health insurance mandatory for every American."

See kids, that's how "markets" work, with government compulsion (did I mention that a third party that is private, that is insurance companies, will get the socialized benefit here?).

tomwright|10.16.07 @ 1:47PM|#

without even reading the article, just from what is above, I can say I probably agree with most of it.

The problem is that the consumer ofthe service does not pay for the service, and the provider of the service is paid by someone without the interests of the patient foremost in mind.

Doctors are paid by insurance companies or government agancies. Therefore that is who they try to satisfy, those are the doctors customers. The patient is the job, he is not a customer


The insurance companies are paid by the employer. So the employer is the customer, not the patient.

Again the patient is the job, he is not a customer


The employer is paid by his customer, not by the employee. So the customer is the customer, the patient/employee is now not just a job, but an expense, he is certainly not the customer.

At best the employee/patient is an expense, a part in a machine that provides service or builds a product. A 'resource', human or otherwise. And like all expenses, he is to be minimized wherever possible.

Is it any wonder why health care is in such a crisis and heading for worse? Every incentive in the way health care in the U.S. and much of the world is provided, is set AGAINST the patient.

(this is also why I hate the term 'human resourse'. It is a dehumanization, a 'thingification', of people).

|10.16.07 @ 1:52PM|#

"The problem is that the consumer ofthe service does not pay for the service, and the provider of the service is paid by someone without the interests of the patient foremost in mind."
tom-most people do pay at least part of their premium, and in the case of families quite a bit. More importantly the employer and the employee contracted for this as part of a voluntary exchange. So now libertarians are for government telling people they can't freely contract with employers for this benefit and they have to go buy it in the private market? WTF?

ed|10.16.07 @ 2:01PM|#

the employer and the employee contracted for this as part of a voluntary exchange

True, but government tax credits foul the waters and force this outside the realm of a purely private transaction. And we all know that when the government gets involved, there are strings. Nasty, sticky, Hillaryesque strings.

|10.16.07 @ 2:02PM|#

Mr. Nice Guy:

While I don't agree with all the policy prescriptions in this article, I do agree with the general thrust.

The problem with the current system is that the Big Hand of Government skews the market in employment by giving tax breaks to companies to get them to provide insurance. Remove that, and the free contract between employer and employee will send better signals, thus making the market work better. Plus, it would involve fewer indirect government handouts for the rich.

Consider: between a low paying job (say, housecleaner) and a higher paying job (say, engineer), which is more likely to include health insurance in the compensation package? The person with the higher salary gets health insurance because it provides more value to the employee at lower cost to the company. The lower paid person is more easily replaced (hence why they are lower paid), so the company doesn't worry so much about keeping them. Figure out the price point at which employees in a given area start getting health insurance, and you'll figure out when it's cheaper for the company to put up with the headaches involved than to pay cash directly.

|10.16.07 @ 2:22PM|#

So it's the tax CREDITS now that screw up the free market?

|10.16.07 @ 2:23PM|#

I agree, mandatory market-based healthcare is a bit of a conundrum, especially when forcibly eliminating employer-provided healthcare. All tax interference aside, it seems like a grand idea for companies to get out of the wrangles of healthcare. Look how the UAW has Detroit by the balls here! If I ran my own company, I'd pay a high enough salary for people to buy their own healthcare (affordable private healthcare plans DO exist!), but that is hardly the place of government to make that decision.

|10.16.07 @ 2:27PM|#

"So now libertarians are for government telling people they can't freely contract with employers for this benefit and they have to go buy it in the private market?"

Companies paying for health insurance is a perversion of the market caused by government intervention. That practice began when there were wage controls during WWII. In order to attract the best workers, companies had to offer various fringe benefits like health insurance. Companies getting tax breaks to provide insurance is continuing a perversion of the market. I think it would be a good idea to buy health insurance on the free market like we do auto insurance. The competition would bring prices down.

|10.16.07 @ 2:29PM|#

"The report promisingly begins by recommending the creation of "a system of market-based universal health insurance."
The second problem I had with this sentence is: how is our growth of health care costs relative to other nations with LESS market based systems? Cuz if our costs are growing higher and faster than nations with LESS market based systems then responding to the problem with MORE markets is kind of like saying "hey, hitting this tv with my hammer did not fix it, let's hit it with a bigger hammer!"

ed|10.16.07 @ 2:30PM|#

So it's the tax CREDITS now that screw up the free market?

No, it's the taxes that necessitate the tax credits that screw up markets, among other things of course. Haven't you learned anything here?

|10.16.07 @ 2:32PM|#

Jake-It is no longer WWII and we do not have price controls. Companies are free to offer health insurance as part of their package or not. Government may provide an incentive for them to do so but that is a lessening of government (albeit in an incentive inducing fashion). So you think this relatively minor coercion should be "fixed" by the massive coercion of government mandated health insurance? In the name of "libertarianism?" That doesn't taste like Kook-Aid to you?

Guy Montag|10.16.07 @ 2:32PM|#

I think it would be a good idea to buy health insurance on the free market like we do auto insurance. The competition would bring prices down.

On car insurance I agree with you too, but would rather that (some) governments stop requiring it.

|10.16.07 @ 2:35PM|#

"No, it's the taxes that necessitate the tax credits that screw up markets, among other things of course. Haven't you learned anything here?"
So get rid of the credit. I mean really, if it is so costly to insure your workers that the credit is not helping you then you'll drop the insurance either way. Many companies do this. It's called freedom.

Guy Montag|10.16.07 @ 2:37PM|#

So get rid of the credit. I mean really, if it is so costly to insure your workers that the credit is not helping you then you'll drop the insurance either way. Many companies do this. It's called freedom.

How about getting rid of the tax for real freedom?

|10.16.07 @ 2:44PM|#

Guy-that would be better of course (unless we needed that revenue for crucial functions)

Of course, another point is this: even with our employer subsidized system many people are not covered and many cannot afford private insurance. With the credit dropped and employer contributions gone this number will expand dramatically. These people will be covered then by the government (cuz let's face it, we are not gonna let these people die on the streets, and a good thing that is). Yay!

I realize some people here will say: ABRACADABRA the MARKET and expect prices to suddenly plummet while quality races skyward. But let's concede that (in my opinion contestable) opinion: it will not fall tomorrow or for a long time, and so the dole will be catching all these folks.

This is some boondoggle so that companies can say to those they are bargaining with "oh, we can't offer insurance, that's mandated by the government." Proof that business will not only turn to government coercion when it suits them, but that they will fund libertarian think tanks and pundits to argue that such coercion is 'really' the libertarian thing to do...

Dave Woycechowsky|10.16.07 @ 2:45PM|#

Is Ron Bailey for universal health care coverage. His article seems to imply that he is for it, but I am still not sure.

I thought the true libertarian position was health care coverage only for those who can afford it so that nobody is forced to subsidize anybody else. I would have guessed that to be Mr. Bailey's position, too, but now I am not sure.

|10.16.07 @ 2:46PM|#

Just like the "libertarian" thing to do with prescription drugs subsidized by foriegn governments and being voluntarily traded here is to foribly ban them...

|10.16.07 @ 2:48PM|#

"Jake-It is no longer WWII and we do not have price controls."

That is just to explain how companies got into the pattern of offering health insurance. The tax breaks that companies get for offering health insurance has promoted the continuance of this trend.

"So you think this relatively minor coercion should be "fixed" by the massive coercion of government mandated health insurance?"

No, I'm opposed to government coercion, but when people talk about bringing us socialized medicine, this alternative sounds good. I would prefer companies being allowed to continue offering health insurance, but I would also prefer to see a voucher system as opposed to Medicaid and Medicare and I think Medicare should be means tested and I would like to see more competition in the availability of health insurance policies with interstate sales of health insurance and tax breaks for purchasing health insurance. All these things would help to bring down the prices of health care and continue to give consumers choices.

|10.16.07 @ 2:50PM|#

Ron Bailey -- you do know this is an allegedly libertarian website, don't you? So WTF is up with calling for compulsory purchasing of health insurance, forbidding employers from offering coverage, etc.?

As a former health insurer, I can assure you that compulsory health insurance is every insurer's wet dream, because anyone familiar with negotiating knows that when people can't walk away from negotiations, they tend to get a rotten deal.

|10.16.07 @ 2:51PM|#

One practical consideration is, universal healthcare is coming -- whether as single-provider, single-payer, or mandated purchase. The CED's proposal requires close to the minimum amount of government involvement, out of the various proposals I've seen.

|10.16.07 @ 2:51PM|#

Ron,

You can't stake your argument on regressivity (did I make that word up?) and then suggest an individual tax deduction. In a progressive taxation system, such as our income tax, deductions are regressive by definition. Credits are always less regressive than deductions, at least for people with taxable income (otherwise, it's a wash).

If regressivity were the only problem with this program, you could simply devise a progressive tax to pay for credits instead of a flat or regressive tax. That's probably not appealing either, but for different reasons.

|10.16.07 @ 2:58PM|#

Jake-I think I see your point about the vouchers, the idea is that if someone is not "really" paying for something then they have little ability to shop around, and prices go up. I'm guessing socialized medecine nations deal with this problem by rationing.

One problem I see with the vouchers you propose is the same I see with replacing welfare services with cash payouts or credits: a lot of people that rely on these services ain't right in the head. I mean really, there are a great deal of people who are elderly, uneducated to an amazing degree, mentally ill, etc., in fact a great deal of those on the dole are one of the above. Hoping that these people will rationalize health care costs through their rational voluntary choice of provider seems like wishful thinking to me...Not to mention that being sick in and of itself does not put one in a frame to make frugal or wise choices...

|10.16.07 @ 3:00PM|#

yet these people are human beings and we can't let them just suffer for their unwise choices...So some kind of government service is probably the only way to go...

|10.16.07 @ 3:05PM|#

"One problem I see with the vouchers you propose is the same I see with replacing welfare services with cash payouts or credits: a lot of people that rely on these services ain't right in the head. I mean really, there are a great deal of people who are elderly, uneducated to an amazing degree, mentally ill, etc., in fact a great deal of those on the dole are one of the above. Hoping that these people will rationalize health care costs through their rational voluntary choice of provider seems like wishful thinking to me...Not to mention that being sick in and of itself does not put one in a frame to make frugal or wise choices..."

That's what we have social workers for.

Dave Woycechowsky|10.16.07 @ 3:15PM|#

One practical consideration is, universal healthcare is coming

see, that is what I can't figure out from Bailey's article. He seems to not just think that universal coverage is inevitable, like you do, Shelby, but rather he sort of seems to go further and say that it is a good thing a-like Mr. Nice Guy does. Does he really think universal coverage is good, or just inevitable?

Forrest|10.16.07 @ 3:22PM|#

. . . a lot of people that rely on these services ain't right in the head.

Stupid is as stupid does.

|10.16.07 @ 3:25PM|#

Shelby, Dave & others:

Unfortunately, I do believe that universal coverage is politically unavoidable. My proposals are all aimed at minimizing the damage, keeping as much as possible private, and maintaining incentives for medical innovation. I don't believe that CED proposal does this. It's better than Medicare-for-all, but not nearly as good as it could be given what I believe to be the political constraints.

Guy Montag|10.16.07 @ 3:43PM|#

So Ron, you are shilling for Big Hands?

carrick|10.16.07 @ 3:47PM|#

Unfortunately, I do believe that universal coverage is politically unavoidable.

Depressing. The last thing we need is for 500 lawyers to specify the best way to provide medical care to the ill, the injured, and the infirm.

|10.16.07 @ 3:49PM|#

Markets work if you want people who won't or can't save for healthcare to suffer. If you say that everyone should have healthcare no matter what they do, you are out of the realms of markets. What you are left with is a set of coercive measures that are varying degrees of bad.

I can see an argument that mandatory insurance isn't the best of the alternatives, and I can see the argument that we shouldn't be covering everyone at all. I don't see how you can simultaneously support free stuff for everyone and criticize the market for not providing it.

Guy Montag|10.16.07 @ 3:55PM|#

Wait, wait, wait!

Has someone distracted Dave Weigel with a milkshake and slipped Hillarycare into an article not written by DW?

|10.16.07 @ 4:04PM|#

I tend to lean libertarian, but it healthcare an issue that anyone truly walks the libertarian line?

Does anybody really think that the free market exclusively should dictate who lives and who dies in this country? The free market works great when we are talking about cars or TVs, but are we really going to tell somebody that their kid must die because they are sick and don't have the cash to pay for healthcare?

Of course not.

So we have two options. 1. The status quo -- people without insurance show up and get treated for free in the least efficient and most expensive manner possible (usually an ER), and the costs are borne by all of us; or 2. We mandate some sort of universal coverage so that some degree of prevenative healthcare is available to everyone (lowering costs for all of us), and keeping people out of the ER and in regular healthcare channels.

Judging by the fact that we spend about twice as much per capita as most other countries, and our level of healthcare service is comparable, it is obvious that the status quo isn't working all that well ... I suspect the extraordinarily high costs of providing services to the uninsured aren't helping out our stats.

Purina|10.16.07 @ 4:23PM|#

Just put statins, anti-depressants and antibiotics in the soylent green kibble.
Healthcare problem solved.

|10.16.07 @ 4:26PM|#

"the employer and the employee contracted for this as part of a voluntary exchange"

It's a voluntary exchange? Dear Boss: Cancel my coverage, I'll take it in cash.

|10.16.07 @ 4:57PM|#

The free market works great when we are talking about cars or TVs, but are we really going to tell somebody that their kid must die because they are sick and don't have the cash to pay for healthcare?

It's not as if the free market is a "nice to have," but not really suited for the really important stuff. It's the key to freedom.

In the situation you described above, you have two basic options:

1) Slavery. Either force the health care provider to work for free to care for the sick kid, or force someone else to work to produce the wealth needed to pay the health care provider. (Don't call it "slavery," of course! And if you can arrange it so it's only temporary, some people think it doesn't count.)

2) Charity. Allow the health care providers to donate their services for free or for a reduced cost, or allow others to donate the money needed to pay the health care provider.

I'm cool with #2. It's compatible with the free market. Anyone is free to offer their services for a cost of $0, or pay money in exchange for 0 in return, as long as they are free to do so voluntarily.

Another free market solution is to allow more free competition in the market of health care providers.

I've posted this before, but this describes a former voluntary/free market system that once made health care more widely accessible, at low prices, until the government intervened on behalf of special interests.

|10.16.07 @ 5:00PM|#

EDIT: Another free market solution is to allow more free competition in the market of health care providers in order to drive down costs and make services more widely affordable.

|10.16.07 @ 5:08PM|#

I don't see why people think that without tax incentives companies will stop providing health care. People are already used to it and companies will still have buying power. GE can buy a heck of a lot more insurance policy that Tony's Hardware, so they'll get a volume discount. Since the value of the insurance GE can provide is higher than what their employees could get on their own, GE could get more value from their employees for less.

THAT is why companies get health insurance for their employees, they can provide more value to their talent than it costs them.

P.S. Stevo, you weaken your argument by calling ER care on the broke slavery. It's the cost of doing business as a hospital. Unless, you consider salaried worker overtime to be slavery.

|10.16.07 @ 5:48PM|#

Stevo-we could just do what we do know, have the government pay the doctor to save the sick kid. I mean, if the kid was dangling over a precipice the government would spend a great deal of money to save him, so why not here? Or are you against police and fire departments as well (they are payed with [horror] taxes you know).

Those fraternal societies sure solved everything. All that stuff Dickens wrote about was such pure fantasy that the public threw his works into the trash finding it so unbelievable.

Heck, you don't have to go back that long. Go back to pre-Great Society Mississippi and take a gander at the excellent health care most people were getting under their free market...

|10.16.07 @ 6:00PM|#

Mr. Nice Guy

In Dickens' time there was hardly anything that today we would recognize as coming close to what we call health care today. It really didn't matter if anyone could pay for it.

|10.16.07 @ 6:02PM|#

IB-of course, to the extent that is true it is absurd to claim that fraternal societies gave greater access to "health care" than people have today through government intervention.

Guy Montag|10.16.07 @ 7:18PM|#

Of course not.

I disagree and there was a recent story about protectionist measures for existing dentists that proves the point.

Guy Montag|10.16.07 @ 7:31PM|#

IB,

Very good point.

Steve Verdon|10.16.07 @ 7:36PM|#

Mr. Nice guy,

Jake-It is no longer WWII and we do not have price controls.

True, but we also still have the policy that health care benefts provided by employers is basically untaxed income.

You seem to be under the incorrect impression that this doesn't cause a problem. This means that there is a distortion in the labor market as a result. If employers did not pay for benefits for their workers, that money would likely flow to the employees as income and be taxed. Hence workers who don't have employers paying their benefits are at a disadvantage when it comes to buying health insurance. This distortion is one of the reasons why there are people are voluntarily uninsured in this country.

As for your insistency on sticking to ideology on this issue you will ultimately lose. The idea of a purely free market on health care is just not going to happen. Things like laws that hospitals treat people irrespective of ability to pay are another distortion. This can lead healthy people with few tangible (i.e. seizable) assets to skip purchasing health insurance even if they can afford.

For the libertarian minded individual, this is a rear guard fight at least for the time being.

As for the article itself, the only major problem I've had with Bailey's writings on health care lately is that he tends to ignore the supply side. For example, when the baby boomers retire a large number of currently working doctors will also retire and we don't have the med students in the pipeline to replace them. Throw in that the number of doctors in the U.S. is largely determined by the government and the problem is really nasty (i.e. it now includes rent seeking).

|10.16.07 @ 7:46PM|#

Verdon-Of course the fact that large companies can pool allows them to get health care for their workers for cheaper than the individual who does not have employer related care can for himself. Does this 'distortion in the labor market,' brought on by voluntary contracts bother you? Because we could get rid of it the same way...

|10.16.07 @ 8:04PM|#

I tend to lean libertarian, but is healthcare food an issue that anyone truly walks the libertarian line?

Does anybody really think that the free market exclusively should dictate who lives eats and who dies starves in this country? The free market works great when we are talking about cars or TVs, but are we really going to tell somebody that their kid must die because they are sick and don't have the cash to pay for healthcare food?

Of course not.

So we have two options. 1. The status quo -- people without insurance food show up and get treated fed for free in the least efficient and most expensive manner possible (usually an ER food kitchen), and the costs are borne by all of us; or 2. We mandate some sort of universal coverage government-run food stores so that some degree of prevenative healthcare nourishment is available to everyone (lowering costs for all of us), and keeping people out of the ER breadlines and in regular healthcare government-run food distribution channels.

Brad -- your argument still make sense to you?

|10.16.07 @ 8:15PM|#

Stevo-we could just do what we do know, have the government pay the doctor to save the sick kid.

Oh, yeah, good idea! We could just have the government pay for things with its money, and leave the rest of us out of it!

Or are you against police and fire departments as well (they are payed with [horror] taxes you know).

Yes (horror), I am ultimately against public, tax-funded police and fire departments. The work could be done better through (horror) private-sector companies.

Comparing health care in the present to health care in the past, of course you have to recognize advances in the technology of health care. That's different from examining the access to whatever technology was available, and the relative cost of same.

And beware of relying too much on novels for your counter-evidence.

Guy Montag|10.16.07 @ 8:34PM|#

Brad, and others here, how on earth do you people eat without government grocery stores?

Wll, maybe you don't cook for yourselves, so I will rephrase.

How on earth do you people eat without a government grocery store to supply your Church sponsored soup kitchen?

Kevin B. O\'Reilly|10.17.07 @ 12:44AM|#

Ron, perhaps you could lay out what you really believe ought to be the country's health care policy, rather than the mandate-and-regulate stuff you've been promoting.

I'm all for Reason wanting to be at least be touching the fringes of the country's political debate. Surely, it must get tiresome to be on first base while everyone else is at home plate. But I don't think that kind of incrementalist, outreaching approach ought to include actively promoting unlibertarian policies such as health insurance mandates, guaranteed issue and all the rest.

Yes, maybe it's the most pragmatic thing out there, but you ought to make clear why you're supporting it as a "slightly less worse than single payer" alternative and spell out in each of your columns in a quick graf or two what the libertarian alternative is and why it's superior. Is that really too much to ask?

|10.17.07 @ 9:29AM|#

Kevin: I laid out my plan (not necessarily "the" libertarian plan) here. Frankly, the libertarian plan would be to get rid of all employer-based insurance and let people buy what they can. If some can't buy insurance, that's a matter for charity. Or as a friend of mine put it, "If we'd just let bodies pile up at emergency room doors, people would quickly get the idea that they need insurance."

Actually, the idea that people would "get" is that the guvmint should give them health care. Given that, I think that the political dynamic makes it inevitable that the government will try to figure out some kind of universal health care, so I think my alternative of mandatory private health insurance is the best realistic alternative to something much worse.

Kroneborge|10.17.07 @ 11:21AM|#

As long as emergency rooms are required to treat people, we should have an individual mandate. In the interests of liberatanism, I would be perfectly ok with somebody opting out of the mandate by simply stating that they would receive absolutely no medical care that was no prepaid. IMO, people should be free to make their own choices. But as long as I have to pay for your care, then you have to have insurance.

Kevin B. O\'Reilly|10.17.07 @ 11:31AM|#

Ron, thanks for writing. I'm familiar, of course, with your mandate article. What about putting in a graf in each story, saying something along the lines of: "Ideally, we'd have a private, largely untaxed, unregulated and unsubsidized health care system and rely on charitable organizations to provide care for the uninsured or destitute. Unfortunately, that's unlikely, so here is a second-best alternative."

I know Reason is not about following a hard line on policy, and it shouldn't be. But I think there's some responsibility as putatively libertarian publication to make it clear that your mandate-and-regulate plan is, you know, not libertarian and is a "this-world" alternative. Or at least offer a libertarian alternative from someone else on staff or freelance it out. Certainly, many libertarians disagree with your notion that the mandate-and-regulate route is wise, necessary, or the only politically pragmatic alternative out there. Reason should reflect that, and to the extent that you write regularly about the topic your stories should note it. Just my opinion as one reader.

|10.17.07 @ 12:36PM|#

the "Health Insurance Crisis" will never end, and never be solved. For most of human history, illness and death were no more amenable to human intervention than sunrise or the tide (and for the most part, still aren't). However, with great amounts of resources, some health problems can be ameliorated. But health doesn't follow typical supply or demand - would you want a heart operation that costs 1 thousand or 100 thousand dollars? Maybe some would bravely pick the 1 thousand dollar operation, but most would say, "do you have a million dollar option?" People will not only spend all their money to keep on living, they will (preferentially as well) spend all of someone else's money too.

|10.17.07 @ 1:09PM|#

Stevo,
Private police forces are a frightening idea. Look at Blackwater in Iraq for potential abuses it could lead to.

|10.17.07 @ 3:22PM|#

Wooo , hold the presses.

Before you even attempt to figure this mess out shouldn't you first look at the other models of health care out there?
Here is the list of countries from best to worst:
http://www.photius.com/rankings/healthranks.html

Then:
1. Clean up the abuses of hospitals overcharging, double billing, making mistakes etc.?

2. Maybe look at the insurance companies and their skyrocketing rates for no reason accept to fill their pockets?

3. Drug companies reaping the populace? Same drugs are made in other countries for a fraction of what they are reaping you for.

4. Companies not paying their taxes as they should.

5. Government officials accepting cash for votes from said institutions to give them easy way to rip you off?

6. Leveling the playing field between rich and rest of Americans by instituting 12% taxes for the rich as well? They only pay 6% if not at all at present.

I'm no genius but a quick calculation shows 75% to 90% of cash is being spent to fill the above mentioned partie's pockets needlessly.

With such savings you can have the best health system on this planet.

Kroneborge|10.17.07 @ 5:53PM|#

Hmm, while I agree that a lot of money goes to lining various people's pockets, I think 75-90% might be just a tad high. Also, somebody's got to pay the high drug prices for them to be developed, I'm not saying it should be us (although it probably will be), but people don't spend billions on research for nothing

|10.17.07 @ 7:43PM|#

"I tend to lean libertarian, but is healthcare food an issue that anyone truly walks the libertarian line?

Does anybody really think that the free market exclusively should dictate who lives eats and who dies starves in this country? The free market works great when we are talking about cars or TVs, but are we really going to tell somebody that their kid must die because they are sick and don't have the cash to pay for healthcare food?

Of course not.

So we have two options. 1. The status quo -- people without insurance food show up and get treated fed for free in the least efficient and most expensive manner possible (usually an ER food kitchen), and the costs are borne by all of us; or 2. We mandate some sort of universal coverage government-run food stores so that some degree of prevenative healthcare nourishment is available to everyone (lowering costs for all of us), and keeping people out of the ER breadlines and in regular healthcare government-run food distribution channels.

Brad -- your argument still make sense to you?"

Absolutely, it still makes sense. We don't let people starve to death because of lack of money, either. We as a society have decided that this is not the right thing to do. Similarly, we don't let people die because they can't afford healthcare.

Given those realities, we need to find the most efficient means of making sure that nobody starves and nobody dies due to lack of healthcare ... and the free market does not work to provide that guarantee. This is why these are examples of appropriate points of limited government intervention.

You are, of course, completely skewing the argument by turning my statements into completely socialistic statements as opposed to simply noting that limited government assistance is used to keep people from starving. In much the same way, there is no need to socialize the entire healthcare system, but some interventions need to be made (one way or another, and preferably in more efficient ways than they have been made in the past) to allow the free market to do as much as it can do, but to stop short of having a system wherein people die due to lack of money (which would be the result of a system based solely on the free market, unfortunately).

|10.17.07 @ 7:56PM|#

"Brad, and others here, how on earth do you people eat without government grocery stores?

Wll, maybe you don't cook for yourselves, so I will rephrase.

How on earth do you people eat without a government grocery store to supply your Church sponsored soup kitchen?"

I see the "grocery store" argument must be the talking point of choice lately ... but as you well know, it is quite possible for government to provide assistance to keep poor people from starving to death without having the government own the stores. It's a radical idea, granted, but it does seem to have been effective in keeping people from being dead. Similarly, the same is possible with healthcare. The government doesn't have to own the system in order to correct the fact that a pure free market doesn't provide healthcare to everyone.

And, dang it, we're too good a people to just let people die, so we're going to pay for them one way or another. I'd rather we do it in an efficient manner as opposed to just letting them show up for incredibly expensive ER visits.

So ... once again for those who didn't catch it ... it IS possible for government to play a role in a market without the government owning every business in that market. This is clearly evidenced by the fact that the government currently owns no grocery stores, yet does still have programs that guarantee that people won't starve. Fairly obvious stuff we are working with here. So when you get the urge to yell "government grocery store" at odd and inappropriate times in lieu of a material argument, just remember that one lesson, and all will be well.

|10.18.07 @ 3:44AM|#

Kroneborge: You are in most part right :)

R&D is still part of the brutal circle of get results any way you can.
= Beg, steal, borrow, destroy, maim and most of all inflate prices in the process
Do you know that most cures come in their natural form as "herbs" which can be picked up for less than a penny for whole time of treatment? It's the drug companies that need to turn them into acceptable form for consumption. And let's not forget the greasing of palms, hidden costs, weird FDA testing etc.
You have a whole system that's corrupt, corrupt to the core. Even from watching your news: Each time a good idea is presented in Congress it's squashed by the almighty mega corporations. Go figure ROFL

This is why the rest of the world is laughing at America on one side and pissed off as well for trying to instill their business model on everyone else.

In case you don't know, this is what the rest of the world thinks of America:
- whole bunch of "imports" came to continent
- Killed of most natives, inslaved the rest
- killed off their food and detroyed their land
- brought diseases and killed of more
- reaped the land of resources till America becomes a leader in pollution
- couldn't stay to themselves and had to try to spread their crap all over the world

example:
I wonder why natives of Central America don't get hunta virus since it originated there. Yet Amarica spent billions, and still is, to find a cure.
Ooops, large corporations cut down the rain forest which held the cure. Killed of natives that knew the cure. Ooops again

That's mainly why R&D costs so much