digamma.net - notes

Following up on my post on what is and isn’t insurance, I find this bit of candid wisdom from MaxSpeak:

Right now the money your employer spends on your health insurance is excluded from taxable income. There is a double discount here, not a single one. The tax break is one. The opportunity to buy as part of a group is another. Handing you a new tax deduction and pushing you out of the employer system preserves one discount, but not the other.

The group discount is itself double-sided. One side is that you pool your risks with others in similar health. This benefit we could expect if people bought insurance individually, at least in principle. In a competitive market, you shouldn’t have to pay more than reflects your risks. In this sense, abstracting from some other factors like administrative cost, the group membership is superfluous.

The other benefit of being in a group is the possibility that your average expected costs will be less more than those of the group. In this narrow sense you are not insuring yourself – you are sponging off healthier members of the group.

Exactly! No libertarian would disagree with any of this.

From a market standpoint, many people are simply not insurable. For others, the cost of insurance they could purchase as an individual, given their health status and income, is prohibitive. In nutty libertarian-think, they should have had the foresight and personal responsibility to purchase insurance when they were young and healthy. This assumes they could make deals with reputable companies that would be honored indefinitely. Their failure, and subsequent resort to group insurance and the public sector, infringes on the liberty of everyone else.

By contrast, in the libertarian universe, those saddled with medical problems early on, and those without the wherewithal to purchase insurance, are subjects fit for charity, not for imposing their bad luck on the rest of us.

Well, hold on. I’m willing to impose some people’s bad luck on the rest of us. A lot of libertarians are - go read the chapter “Alleviation of Poverty” in Milton Friedman’s Capitalism and Freedom if you don’t believe me.

What I’m not willing to do is, in the name of helping the sick, wreck a whole industry that does a lot of good work and gets better every year.

If you want to turn our healthcare system into France’s, which makes sure poor people get cared for but still lets healthcare act like an industry, we’d all love to see the plan. If you want to turn it into Canada’s or Britain’s, all I can tell you is brother you’ll have to wait.