1. "Insurance" is for risk aggregation of large impact, but rare events. Since nearly everyone is guaranteed to become sick and require increasingly expensive (and magical!) treatments, almost everyone will have the opportunity to spend frightful amounts of money to stay alive a few more months, unless they die quickly from an accident or something. There is nothing rare about getting sick. Specific diseases, perhaps, but in aggregate everyone will eventually have something that could break the bank. So, there is no "risk" here, properly understood. As a result, insurance is the wrong model.
I disagree with this, entirely. The whole notion of insurance was created back when traders were sailing the oceans. Since nearly every trading company was guaranteed to have a ship sink and lose significant investment, almost every trading company had the opportunity to spend frightful amounts of money to stay in business a few more months, unless they lose their whole fleet at once in a freak storm or something. There was nothing rare about losing a ship. Losing one (or more) with an extremely costly cargo, perhaps, but in aggregate every company will eventually have a ship sink which could put them out of business. So, there
is risk there, properly understood.
It's no different with being sick -- I don't know when, or where I'll get sick. It could be now, it could be 20 years from now, but I do expect I'll get sick at some point. The risk is, will it be catastrophic enough to wipe me out financially for whatever reason. With the traders, they don't know when, or where they'll lose a ship. They might lose one this trading season, or not for several years, but they are expecting to lose a ship. The risk is, will it be catastrophic enough to wipe them out financially?
That said, private insurance makes sense for traders -- it's a small group of people amongst whom the risk needs to be shared. With health care, it's silly to have private insurance -- the group of people needing such insurance isn't small, it's the entire population. That's why it makes sense to have a single-payer system, IMHO.
2. A free market on medicine would lower costs on average.
Who are you trying to kid? If this is true, why doesn't the US have lower costs for the health care system, than any other 1st world country with government-run systems? I'd say the free market on medicine isn't exactly working out too well.
...and single-payer-style health care. But I mostly like the last one because it take administrative and entitlement overhead/waste out of the system and sets some expectation that therapies get judged on their merits and the effect on outcome.
That's extremely naive in my opinion. What government bureaucracy works this way? Even if you can name one (someone mentioned the post office), that would be a very rare exception. In fact, the exact opposite happens.
The oft-quoted statistic is that Medicare has ~2% administrative costs, compared to %15-30 for private insurance companies. Of course, the rebuttal is that that doesn't include a lot of hidden costs of Medicare, but even with those costs included, the analysis suggests that Medicare costs are, at worst,
no worse than private insurance companies. For a program that doesn't pick and choose who they're going to cover, I'd say that's pretty reasonable. If the private insurance companies are showing as much (or more) overhead and waste as a government organization, and not covering everyone, then let's get rid of 'em all, and just have the government do it -- at least everyone would be covered, then.
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