A hidden cost of moving to socialized healthcare
Submitted by Arthur B. on Sat, 2008-02-02 14:46.
* Public
When I argue with Americans about socialized healthcare, I argue we shouldn't move towards it, when I argue with French people, I argue we should get out of it. Morally the arguments are roughly the same and there is no need to go into details here, you shouldn't be forced to buy an insurance service, period.
When arguing for getting out of the system, there are legitimate practical problems that I need to deal with. Even if the moral case is rock solid, the practical issues to move there are always relevant. There is a practical issue that I've never seen raised, and it's a tough one.
Imagine a socialized healthcare where everyone is insured. Insurance is mandatory so there are no adverse selection problems, the state forecasts the costs and adapts the premium - tt's actually not that hard to balance as long as it's fairly stable. Of course there are many other problems, moral hazards, the impossibility to decide what should or should not be covered, etc.
Imagine now that the government decides to get rid of the system. They say, from next year you'll have to find yourself a private insurer, or, from next year you can get opt out and get a private insurer if you wish. You have an expensive chronic illness, next year comes, you have no risk to insure so you try to stay with the state insurance, but because of adverse selection it goes bankrupt, or your premium increase dramatically.
Ok. I was actually never opposed that argument... but I could. So I've come up with some patchy solutions. One is to decide on a cutoff date, people born after next year will not be insured. That solves the problem, but it takes a century to get out of the system. Another solution involves the state's insurance making packs of 1000 insurred drawn at random and sell the pack (without revealing its content) to insurers comitting to offer insurance for life. Your risk has become insurrable again since you're just a random person. From there, you can always arrange with your insurance to move to another insurer and you're free again. It's a bit cumbersome but I think it works.
Ok the blog title was about moving towards it, and so far I've been talking about how to get out of it... what's my point ? I've heard many people argue for socialized healthcare on the US and the ground that it hasn't been tried, that it deserves to be tried etc. When you try something, that generally implies a free option to get out of it. Well, that option is not free, it comes at a huge cost. Getting out of socialized healthcare is a terrible mess.
Once it has been argued thoroughly that socialized healthcare is simply criminal, it might be helpful to point out that, if it's implemented and it fails, it might be almost impossible to get out of it. It cannot just be "tried", it's a very pricy commitment.
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