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Sure, but forcing healthcare on everyone makes the market failure a government failure--if "failure" means someone paying much more for insurance than it actual

Sure, but forcing healthcare on everyone makes the market failure a government failure--if "failure" means someone paying much more for insurance than it actually costs for that person.

jfoutz 10y ago
There is a pretty easy calculation, but the numbers are hard to come by. People pay about $3000 for health care in the us, per year. people pay $750 for medicare. To be fair, half is by the employee, half is by the employer, so let's say $1500, because theoretically you would make more if the employer didn't have to pay that tax. On the flip side, high paying jobs, the employer pays the lion's share of health insurance premiums - but let's just ignore that. Old people (medicare patients) get sick all the time. Heart attacks, cancer, whatever. Young people rarely get sick, but there are more young people - perhaps 15,000,000 70-74 year olds, and perhaps 21,000,000 20-24 year olds. If the cost of medicare for everyone is less than $3500, it's cheaper to just cover everyone at some basic level via medicare. Very few 22 year olds get cancer. It's expensive. lots of 72 year olds get cancer. That is also expensive. Medicare pays for the expensive part of people's lives (the end of their lives). I'm pretty sure if the medicare tax rate doubled, 3% to 6%, $1500 to $3000 it'd still be cheaper than what we're doing now. I dunno. It's late. It's a complicated topic. I have no problems with well off people paying a whole lot to get special care, extra insurance, or whatever. I think it would be a good thing for people who get in car accidents, have heart attacks, or get cancer to know they're not financially ruined. It's nothing more than a linear programming problem. Right now people pay X. If everyone was taxed more they would pay Y. If Y < X, we should do Y. If not, what we have now is the best we can do. So be it.
- witty_username 10y ago
  > If Y < X, we should do Y. This depends on whether you're fine with some people subsidizing other people. The average cost by forcing everyone to get insured is less because you're forcing some people to buy plans for whom it's not worth it. See adverse selection.
  - jfoutz 10y ago
    > some people subsidizing other people. This is called insurance. Historically some deeply religious groups were opposed to insurance, because they felt it was gambling. > he average cost by forcing everyone to get insured is less because you're forcing some people to buy plans for whom it's not worth it. It's really a timeframe question. A 20 year old, generally, needs less care than a 50 year old, who needs less care than an 80 year old. one approach is to provide lifetime care, and hope that technology improves (as it has for all of human history) and assert that care today for an 80 year old will be less expensive in 10 years than it is today. Now, of course, actual payments for health care is more expensive year to year, because, as you say, adverse selection. In any case, as you point out adverse selection (the problem of information asymmetry) means the payer must be as knowledgeable as the payee. An obvious solution (but maybe not the best solution) is something like medicare. I'm not sure i understand what you're advocating. Perhaps you mean each person should set aside some portion of their cash for whatever expenses they might have, and the odd 20 year old with leukemia should take on a few hundred thousand dollars of debt. of course if you're unlucky enough to have one of those 10% survival variations, the cost will of course be multiplied out by 10. The average american only makes about $2,000,000 over their lives, and they have to eat and have a place to live and stuff, and only half will beat the average, what sort of return could an actual care provider expect? perhaps $200,000? So your model becomes pretty clear, if cost to treat @ 18 > $200,000, the person shouldn't be treated. That number will change with education, but of course decline with age. Seems like not a good solution, but i see where you're coming from.
    - witty_username 10y ago
      > This is called insurance. Historically some deeply religious groups were opposed to insurance, because they felt it was gambling. No. I'm saying it's a subsidy NOT because randomly you roll the dice of risk and you get lucky; but because the expected value or utility of health risks is less than the cost of insurance (for example, you wouldn't buy health insurance for 1 billion dollars a month). I'm not saying it's a subsidy because some people don't end up "using" their insurance plan; I'm saying if you repeat the scenario a billion time healthy people will be on average worse off so it's a subsidy. They wouldn't take the insurance unless government forces them. > I'm not sure i understand what you're advocating. Perhaps you mean each person should set aside some portion of their cash for whatever expenses they might have, and the odd 20 year old with leukemia should take on a few hundred thousand dollars of debt. of course if you're unlucky enough to have one of those 10% survival variations, the cost will of course be multiplied out by 10. I didn't advocate anything; I'm just saying the issue is a normative question; it doesn't have an absolutely objective answer. Sidenote: maybe the 20 year old should be in debt. If we want to save as many lives as possible, it's cheaper to put money into clean water, stopping open defecation, vaccines, etc (depends on whether you value someone outside your country as much as someone inside). The leukemia case is convenient for your viewpoint but what about nonsmokers subsidizing smokers? Should I have to pay for the treatment of the cancer of a smoker or the AIDS of someone who injected drugs or the measles of someone didn't take vaccines? It's a normative question on altruism.

Sure, but forcing healthcare on everyone makes the market failure a government failure--if "failure" means someone paying much more for insurance than it actually costs for that person.

jfoutz 10y ago

There is a pretty easy calculation, but the numbers are hard to come by. People pay about $3000 for health care in the us, per year. people pay $750 for medicare. To be fair, half is by the employee, half is by the employer, so let's say $1500, because theoretically you would make more if the employer didn't have to pay that tax. On the flip side, high paying jobs, the employer pays the lion's share of health insurance premiums - but let's just ignore that. Old people (medicare patients) get sick all the time. Heart attacks, cancer, whatever. Young people rarely get sick, but there are more young people - perhaps 15,000,000 70-74 year olds, and perhaps 21,000,000 20-24 year olds. If the cost of medicare for everyone is less than $3500, it's cheaper to just cover everyone at some basic level via medicare. Very few 22 year olds get cancer. It's expensive. lots of 72 year olds get cancer. That is also expensive. Medicare pays for the expensive part of people's lives (the end of their lives). I'm pretty sure if the medicare tax rate doubled, 3% to 6%, $1500 to $3000 it'd still be cheaper than what we're doing now. I dunno. It's late. It's a complicated topic. I have no problems with well off people paying a whole lot to get special care, extra insurance, or whatever. I think it would be a good thing for people who get in car accidents, have heart attacks, or get cancer to know they're not financially ruined. It's nothing more than a linear programming problem. Right now people pay X. If everyone was taxed more they would pay Y. If Y < X, we should do Y. If not, what we have now is the best we can do. So be it.

witty_username 10y ago
> If Y < X, we should do Y. This depends on whether you're fine with some people subsidizing other people. The average cost by forcing everyone to get insured is less because you're forcing some people to buy plans for whom it's not worth it. See adverse selection.
- jfoutz 10y ago
  > some people subsidizing other people. This is called insurance. Historically some deeply religious groups were opposed to insurance, because they felt it was gambling. > he average cost by forcing everyone to get insured is less because you're forcing some people to buy plans for whom it's not worth it. It's really a timeframe question. A 20 year old, generally, needs less care than a 50 year old, who needs less care than an 80 year old. one approach is to provide lifetime care, and hope that technology improves (as it has for all of human history) and assert that care today for an 80 year old will be less expensive in 10 years than it is today. Now, of course, actual payments for health care is more expensive year to year, because, as you say, adverse selection. In any case, as you point out adverse selection (the problem of information asymmetry) means the payer must be as knowledgeable as the payee. An obvious solution (but maybe not the best solution) is something like medicare. I'm not sure i understand what you're advocating. Perhaps you mean each person should set aside some portion of their cash for whatever expenses they might have, and the odd 20 year old with leukemia should take on a few hundred thousand dollars of debt. of course if you're unlucky enough to have one of those 10% survival variations, the cost will of course be multiplied out by 10. The average american only makes about $2,000,000 over their lives, and they have to eat and have a place to live and stuff, and only half will beat the average, what sort of return could an actual care provider expect? perhaps $200,000? So your model becomes pretty clear, if cost to treat @ 18 > $200,000, the person shouldn't be treated. That number will change with education, but of course decline with age. Seems like not a good solution, but i see where you're coming from.
  - witty_username 10y ago
    > This is called insurance. Historically some deeply religious groups were opposed to insurance, because they felt it was gambling. No. I'm saying it's a subsidy NOT because randomly you roll the dice of risk and you get lucky; but because the expected value or utility of health risks is less than the cost of insurance (for example, you wouldn't buy health insurance for 1 billion dollars a month). I'm not saying it's a subsidy because some people don't end up "using" their insurance plan; I'm saying if you repeat the scenario a billion time healthy people will be on average worse off so it's a subsidy. They wouldn't take the insurance unless government forces them. > I'm not sure i understand what you're advocating. Perhaps you mean each person should set aside some portion of their cash for whatever expenses they might have, and the odd 20 year old with leukemia should take on a few hundred thousand dollars of debt. of course if you're unlucky enough to have one of those 10% survival variations, the cost will of course be multiplied out by 10. I didn't advocate anything; I'm just saying the issue is a normative question; it doesn't have an absolutely objective answer. Sidenote: maybe the 20 year old should be in debt. If we want to save as many lives as possible, it's cheaper to put money into clean water, stopping open defecation, vaccines, etc (depends on whether you value someone outside your country as much as someone inside). The leukemia case is convenient for your viewpoint but what about nonsmokers subsidizing smokers? Should I have to pay for the treatment of the cancer of a smoker or the AIDS of someone who injected drugs or the measles of someone didn't take vaccines? It's a normative question on altruism.