A Really Obvious Way to Bend the Curve
By Bryan Caplan
In the U.S., the all-inclusive cost of a surrogate pregnancy usually exceeds $75,000. Since insurance won’t cover much if any of these expenses, most people who hire an American surrogate are fairly well-off. Fortunately, there’s a much cheaper option: Do it in India, the new capital of fertility tourism. The quality is high, but you pay only a third or a quarter as much as you would in the U.S.
Of course, if insurance covered these treatments, people wouldn’t want to fly across the globe to get them. But if you think this shows that insurance is “better,” you need to go back to your econ textbook. Hey kids – what do we call it when the only reason people buy something is that someone else is paying? Say it with me – m-o-r-a-l h-a-z-a-r-d. That’s right!
Which gives me an idea… If Obama really wants to “bend the curve” of health care costs why not try outsourcing Medicare and Medicaid to India? The harsh version: The government only reimburses an amount equal to the Indian price tag plus the travel cost. If you want the luxury of U.S. treatment, you pay the difference. The palatable version: The government still pays for U.S. treatment, but offers patients 10% of the cost savings if they go abroad. (If you made it much higher, you’d spark another kind of moral hazard – people feigning medical problems in order to get their share of the cost savings).
As Brad Pitt says in Inglourious Basterds, “Sound good?!”