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Wednesday, March 4, 2009

Ask Patients: Medicare Better than Private Insurance

MDL's Jon Hunter notes with studied neutrality that HHS nominee Kathleen Sebelius has a "heroic" task before her. He observes that over half of health care is already paid for by taxpayers.

So why not just simplify things and have taxpayers foot the entire bill? Economist Henry Aaron decribes our current system as "an administrative monstrosity, a truly bizarre mélange of thousands of payers with payment systems that differ for no socially beneficial reason." Medicare patients rate their access to quality care higher than do commercial plan clients (or Medicaid pateints—an interesting difference).

If health insurance is rational, then the most rational plan is to create the largest risk pool possible: 300 million Americans, all chipping in to cover each other's health care.


  1. Maybe if we took better care of ourselves, we would not have such high health care costs.

    Why should I have to pay for the sins of my brother: smoking, drinking, obesity, or failure to exercise?

  2. Anon 9:43

    I completely agree, taking better care of ourselves would be a great idea. In fact, health care is a 95/5 game where 95% of the cost is incurred from catastrophic injuries/diseases. Typical care such as going to the Doctor to check on a cold only incurs 5% of the expense. The problem with our current system is that it disincentives routine and preventative care. If you look at many socialized systems (Canada/France/Japan) they emphasize preventative and routine care which dramatically reduces the occurrence of catastrophic care and in turn significantly decreases the cost of overall care. It's pretty easy to understand that if you catch type II diabetes/skin cancer/etc. early they can be inexpensively treated and correct. Unfortunately our system is setup to reduce the use of medical care at all costs and as such is not capable of reaping the savings of preventative care.

    Now, on to your second point, that you shouldn't have to pay for the sins of someone else. Let's ignore the altruistic benefits of helping your fellow man and also ignore the fact that most catastrophic injuries are simply acts of god and strictly focus on the economic benefit to yourself. We are a nation of individuals that trade goods to one another. If someone is ill and cannot participate in that system all goods cost more because he is not contributing his goods to the system. Sick people cost you money. If we all put in a bit to the risk/preventative care pool we all benefit. If not, we all lose. Rather than thinking of it as taking care of some else's sins, think of it as decreasing the cost of goods for yourself.

  3. Anon 9:43, while we are picking and choosing who we should pay for why not throw in all those hurt by not wearing a seat belt or a helmet? How about those with AIDS because they certainly did it to themselves? (sorry, I must have been channeling Bob Ellis on that one)

  4. When I lived in Carson City (circa 2001), a guy told me he had just been in the hospital for observation. He had some sort of pain. He stayed three days. Nothing bad happened, and he didn't need any particular treatments. He was retired, so Medicare picked up the tab: twenty thousand dollars.


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