Saturday, December 31, 2005

Health insurance, home equity, and adverse selection

Asymmetrical Information's Winterspeak wrote a piece the other day entitled "Who Pays for Health Care?" that started the typical, lively debate one encounters when the subject is healthcare. One commenter, arguing against governmental intervention to guarantee healthcare access, opined:
I don't see any room for disagreement on this. Anyone who has a substantial amount of home equity can afford to buy health insurance. If you can afford to buy insurance, and you don't because you know the government will bail you out and let you keep your assets anyway, then you're enriching yourself at the expense of taxpayers. It's outright theft...Frankly, I'm perfectly fine with denying government assistance to those who could afford health insurance but didn't buy it. We're not talking about indigents; we're talking about people who deliberately shirked their responsibility to insure themselves in favor of buying a bigger house.
Well, for starters, I'd have to say that the overly sweeping nature of the above statement renders it patently false, no matter what one thinks of the philosophy behind such sentiment. Should any member of such a family suffer from a preexisting condition, it's entirely possible, maybe even probable, that health insurance can't be obtained at any price. Adverse selection is the great leveler in any discussion about the American healthcare system. Of course one could counter this point by saying:
"Too bad -- it's not my fault if my neighbor's kid has was born with a defective heart, and it's not my responsibility to help pay to keep him alive via my tax dollars."
And while I give credit to those who make statements like this for their intellectual honesty and consistency, I think one would have to acknowledge most people simply aren't open to such arguments. And the reason for this is not feelings of altruism. The reason for this is the fact that most people are risk averse. They don't want to rely on the possibility that a charity hospital might help them secure treatment in such a case. They want a guarantee. And know what? Increasingly, I can't say I blame them. I mean, would it be so terrible if the US Government eventually decided to look at other rich countries, chose some of the best and most sensible bits of their healthcare systems (while assiduously avoiding some of the not-so-sensible bits) and created some sort of plan that guaranteed universal healthcare insurance while doing something about costs?

We know such a course of action is feasible, because every other OECD member besides Mexico had done it. Lots of Americans would suddenly have more freedom to start businesses or take jobs that make economic sense (which they can't currently do because they're too afraid to lose coverage). I see a lot of upside, and frankly am unpersuaded that waiting six months for a hip replacement when I'm 80 would be such a high price to pay for a saner, less expensive and less inequitable American healthcare system. And besides, I think an AustroCanadiaEuro-style healthcare plan is coming soon. That battle is over. The task now is to fight for the least terrible, most sensible emulation of these plans for the US.

Indeed, if we did reform right, we could preserve the "safety valve" of a vigorous private healthcare sector that would eliminate queues for those who can afford it. And I must say, last time I looked, Britain, Australia and Canada had robustly growing economies despite their whacky predilection for guaranteeing healthcare access to their citizens. I guess what I'm saying is that although I can concede that a committed libertarian can make a moral case against a governmental universal healthcare guarantee, the purely utilitarian case is looking mighty shaky, and increasingly futile.

When both the waitress pouring your coffee and the attendees of a General Motors board meeting are starting to talk the same language on the issue, one can only conclude that government-guaranteed universal healthcare in the US is finally nearing the point of political feasibility, and maybe even inevitability.


Post a Comment

Links to this post:

Create a Link

<< Home