Tyrone Posts on Health Care
By Arnold Kling
Bush plans to pay for [his proposed health insurance deduction] not by efficiencies, but rather by restricting the benefit packages of the already insured, through the deductibility cap.
Paying for something with efficiencies is nothing but a scoundrel’s refuge for policymakers. It’s like saying you’re going to balance the budget by getting rid of waste, fraud, and abuse. Of all the criticisms one could make of the Bush health plan, this is the least persuasive.
I got the pointer from Tyler Cowen, who writes,
My feelings are mixed, but my view is closest to Zasloff.
I think that Tyrone is loose again. Tyrone is Tyler’s evil twin, capable of arguing any position, and who once endorsed single-payer health care.
Tyler (or Tyrone) writes,
But I cannot side with Arnold Kling’s view that third-party payment lies at the root of America’s health care problem. Our tolerance for anxiety is sufficiently low that I expect the future to bring more and more insurance of many kinds, whether from the private sector or from government. The cost of this insurance, in terms of induced inefficiencies, will be high but a secure health care situation is one of the things in life that alone can make a difference between happiness and misery.
I am not proposing to outlaw health plans that insulate consumers from costs. However, I am suggesting that the public policy case for treating health insurance as a “merit good” (something for government to subsidize) stops with catastrophic health insurance. If consumers want to go further and get pre-paid health plans that relieve them of having to calculate costs and benefits of individual medical decisions, then so be it. You can pay for the luxury of insulation, just as you can pay for a fancy sports car.
I hope that I never use the locution “America’s health care problem.” America has health care policy problems. The number one policy problem is that Medicare, if left unchanged, is likely to require large enough tax increases to threaten economic growth. The number two policy problem is that American’s extravagant use of medical procedures with high costs and low benefits is paid for in part by government subsidies. Remove the subsidies, and I don’t care how Americans handle their health care, just as I don’t care how they buy cars.
UPDATE: See also Stuart Butler and Nina Owcharenko from the Heritage Foundation.