Wednesday, April 12, 2006

Mass Delusion on Health Care, Arnold Kling: Library of Economics and Liberty

EconLog comment by Brad Hutcvhings :
"Sadly, what any plan will have to do is convince healthy young people with healthy life habits to pay way more than they can expect to recover from the system in order to support older, less healthy, and less health conscious people. The only way to convince them is through force. Funny how that works."
Nice. I'm not following the details of Mass's new health care plan very closely, but I'll reiterate what should be obvious -- the more government deregulates health-care and removes distorting tax incentives, the more it will be able to operate under competitive, free-market forces. A healthy free-market for health care is a sure-fire way to provide better health care for everyone more cheaply.

The welfare side of this problem is best addressed seperately, IMHO: if the people of Massachusetts feel like the elderly or poor or otherwise infirm have a "right" to some level of health care, it would be better to simply give them vouchers to purchase that directly from a free market. (And add an appropriate tax to fund the give-away). This approach would avoid our present (crappy) situation where medical welfare is conflated with regulation ... preventing competitive pressures from working their magic.

Given the powerful interest groups snuggling up to congress (the insurance, HMOs, doctors, hospitals, AARP), the chance of a free-market in health care is small. There's simply too much money to be made in rent-seeking by these groups.

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