Tyler Cowen positions himself as pro-choice when it comes to health insurance. Here’s his basic proposal:
When people turn a certain age, allow them to trade in the current benefits package for a minimalistic package (set broken limbs and offer lots of potent painkillers), plus some of the rest in cash, doled out over the years if need be. For some people, medical tourism will fill the gap.
But if a person wishes, he or she can keep the extant benefit structure and forgo the cash altogether. No one is forced to take this deal.
It sounds fine in theory but I worry about it in practice. These sorts of deals are contingent on the idea that if you opt out of comprehensive care, we (as a society) let you die, or suffer. When happens when a senior who has opted out developers Alzheimer’s Disease, or Parkinson’s Disease, or ALS, or some other slow-developing terminal illness that is expensive to treat? What happens when they develop a chronic condition that isn’t going to kill them but is going to require constant care for the rest of their life? Unless we’re willing to put them on an ice floe, then everyone else is going to wind up paying their medical bills one way or another. Or perhaps their family will go broke trying to purchase medical care for them.
As a society, I don’t see us being willing to let people really suffer the consequences of their choices. Even people who make healthy lifestyle choices become ill and get into accidents all the time. My prediction is that people will regularly take on lots of “health risk” and that in the end, bailouts will be available, regardless of the choices they’ve made. Our public policy has to acknowledge that
Interestingly, a number of people raise this issue in the comments and Tyler responds glibly. I really am not sure how he accounts for this problem, putting me in the group of people he describes as irrational.