A simple plan

On the Corner:

Regular correspondent B. J. writes (in reference to this post):

I agree that it's economically rational for a young, healthy person to refrain from purchasing health insurance. I also think that it's a deprivation of his liberty to require him to purchase health insurance (or otherwise to put money aside for health care) when he doesn't want to.

But: I want to know what is supposed to happen when Young Rational Person actually needs health care that he can't afford. . . . We'll either use public funds to help him or we'll force private institutions to help him and then force them to shift the cost of care to paying customers.

And if at the end of the day we're going to do that I'd prefer requiring him to pay in ahead-of-time so that we're only subsidizing half the cost of his care instead of all of it.

I don't think the costs and benefits are going to work out that way. A federal policy requiring all people to own a minimum level of insurance is going to raise premiums for everyone, not cut them. The modest savings that come from forcing the uninsured to pay their way will be outweighed by the gradual lobbying-driven expansion of benefits that are required to be purchased.

An alternative would be to enable people who are uninsured to purchase cheap catastrophic coverage. That would reduce the size of the hidden subsidy that people who are insured pay for the care of the uninsured. It would not reduce it to zero. But 1) I don't see any way of reducing it to zero without incurring other and higher costs. And 2) I actually don't think it's outrageous for society, having made a collective decision that nobody can be denied care, to pay a modest collective cost for this compassion—especially since, again, I don't see any better alternative.

Here's my idea: Send them the bill! Hmm...that's simple, straightforward. People understand bills. If necessary, set up a 5-year or even 10-year payment schedule. But in the end, make them pay for it.

Gee, no, that's not fair, let's completely screw up the entire health care system instead!