Cafe Hayek has a wonderful post on private health insurance. A reader named Tom commented thusly:
Imagine we had entirely private health insurance market – no Medicare or Medicaid. If I live to be sixty-five, I will probably have a personal and/or family history that indicates a strong probability of developing an expensive chronic condition. I would wager that is true of almost all sixty-five year olds.
So here is my question: which insurer in their right mind would take on my risk?
I suspect none. Once philanthropy and savings were exhausted, I would surely risk a painful life and preventable death.
Do I want this? Does anyone? Isn’t “socialized” medicine for older people an unpleasant moral necessity for our wealthy society? Please note I am deeply suspicious of most arguments cast in moral terms in discussions of politics and economics. I ask these questions guardedly.
Russell Roberts encouraged some of his regular commenters to respond to Tom's concern with excellent results. Here is one of my favorites by a commenter named aleksanderhansen:
Tom,
I will give one (out of many) potential solution. Will insurers simply stop offering coverage to these individuals less they pay very high premiums?
One solution to your problem would be to enter into an insurance contract today which guarantees you continued coverage when you reach that age. On one hand, such an insurance policy might have premiums that are, ceteris paribus, higher than other insurance contracts to compensate the insurer over time for the (increasing) probability of you developing a condition in the later stages of your life. On the other hand, the fact that you are committing to a very long-term contract benefits the insurance company - they will have a secure income stream for a long time. This would exert downward pressure on the premiums.
Along similar lines one might also imagine a futures market for insurance, i.e., you buy a contract today which guarantees you coverage when you reach a certain age, at an agreed upon price.
Some of the other comments which address free market solutions to health care are excellent so go check out this post.
Showing posts with label Russell Roberts. Show all posts
Showing posts with label Russell Roberts. Show all posts
Thursday, August 20, 2009
Friday, January 30, 2009
What Obama Should Be Saying...
One of my favorite economists, Russell Roberts, writes a speech that he would love to hear from Obama. Many free-market advocates would love to hear these words flow from Obama's mouth as opposed to the massive government intervention that we have been hearing over the last couple of days:
(President Obama is eager to attack the economic crisis. Here is the speech I'd like to hear from him.)
My fellow Americans, these are fearful times. Through a set of public and private mistakes, our financial system is in disarray. The problems of Wall Street have spread to Main Street. Unemployment is on the rise...What can the federal government do to unleash the forces of recovery?
Many are urging a massive increase in government spending coupled with tax rebates as a way to jump start the economy. But the economy is not stagnant because of a lack of spending. The economy is stagnant because of a lack of confidence in the future. Government spending on bridges, roads and new schools will stimulate the construction industry. But without confidence, the benefits will not spread to the rest of the economy...
The argument for a massive spending increase presumes that spending is the source of our prosperity. But it is the combination of prudent spending and prudent investment that creates prosperity...
I would like to guarantee that we in Washington would spend an additional trillion dollars or so wisely. I would like to guarantee that such spending would be free of pork and the influence of the powerful. But those guarantees would be empty promises. As a former senator, I know the temptations of power and influence that are unleashed when a trillion dollars are slopping around in the government trough...
Trillions of dollars of annual red ink puts at risk the government's ability to keep its promises. That will discourage private investment and private spending, imperiling any recovery that might take place based on private initiative...
Finally, adding a trillion dollars to an already bloated federal budget is another sign that we in Washington are irresponsible and unable to live within our means. It is that failure of will and discipline that helped create the current situation--a belief that we could have cheap credit and ever-expanding home ownership without any consequences.
Read the full text here.
(President Obama is eager to attack the economic crisis. Here is the speech I'd like to hear from him.)
My fellow Americans, these are fearful times. Through a set of public and private mistakes, our financial system is in disarray. The problems of Wall Street have spread to Main Street. Unemployment is on the rise...What can the federal government do to unleash the forces of recovery?
Many are urging a massive increase in government spending coupled with tax rebates as a way to jump start the economy. But the economy is not stagnant because of a lack of spending. The economy is stagnant because of a lack of confidence in the future. Government spending on bridges, roads and new schools will stimulate the construction industry. But without confidence, the benefits will not spread to the rest of the economy...
The argument for a massive spending increase presumes that spending is the source of our prosperity. But it is the combination of prudent spending and prudent investment that creates prosperity...
I would like to guarantee that we in Washington would spend an additional trillion dollars or so wisely. I would like to guarantee that such spending would be free of pork and the influence of the powerful. But those guarantees would be empty promises. As a former senator, I know the temptations of power and influence that are unleashed when a trillion dollars are slopping around in the government trough...
Trillions of dollars of annual red ink puts at risk the government's ability to keep its promises. That will discourage private investment and private spending, imperiling any recovery that might take place based on private initiative...
Finally, adding a trillion dollars to an already bloated federal budget is another sign that we in Washington are irresponsible and unable to live within our means. It is that failure of will and discipline that helped create the current situation--a belief that we could have cheap credit and ever-expanding home ownership without any consequences.
Read the full text here.
Tuesday, November 11, 2008
Best post I've read today...
From Russell Roberts over at Cafe Hayek:
[T]he Great Depression wasn't caused by laissez-faire.
That doesn't mean that free markets are perfect. Or that you can't have bankruptcies or meltdowns or bubbles or busts. But to get a really spectacular meltdown like we're in the middle of now, for that you need government.
That doesn't answer all questions. I think most of us, like Alan Greenspan and others who have yet to say mea culpa, thought the system had more stability even with all the distortions. We have plenty of work to do understanding how the system collapsed so utterly. Just don't tell me that it's all caused by market forces run amok or unfettered markets.
The basic point that financial markets are actually highly regulated and that manipulating the housing market is one of government's favorite hobbies needs to be on t-shirts, lapel pins, and 3x5 cards for giving out to friends when they explain the Bush years as the last gasp of laissez-faire. A folk song would be nice, too.
[T]he Great Depression wasn't caused by laissez-faire.
That doesn't mean that free markets are perfect. Or that you can't have bankruptcies or meltdowns or bubbles or busts. But to get a really spectacular meltdown like we're in the middle of now, for that you need government.
That doesn't answer all questions. I think most of us, like Alan Greenspan and others who have yet to say mea culpa, thought the system had more stability even with all the distortions. We have plenty of work to do understanding how the system collapsed so utterly. Just don't tell me that it's all caused by market forces run amok or unfettered markets.
The basic point that financial markets are actually highly regulated and that manipulating the housing market is one of government's favorite hobbies needs to be on t-shirts, lapel pins, and 3x5 cards for giving out to friends when they explain the Bush years as the last gasp of laissez-faire. A folk song would be nice, too.
Monday, October 13, 2008
Best post on Paul Krugman recieving the Nobel prize for economics
By Russell Roberts at Cafe Hayek:
I've talked to a number of people who are depressed and angry at Krugman's prize.
For me, it is just another reminder that those of us who believe in liberty are in for a long time in the intellectual wilderness. Today's intellectual climate is a taste of what it must have been like to believe in liberty in 1933, or what it must have been like to be Milton Friedman in say, 1962.
When Al Gore received the Nobel Peace prize I knew that the Academy had tossed political objectivity and credibility out the window.
I've talked to a number of people who are depressed and angry at Krugman's prize.
For me, it is just another reminder that those of us who believe in liberty are in for a long time in the intellectual wilderness. Today's intellectual climate is a taste of what it must have been like to believe in liberty in 1933, or what it must have been like to be Milton Friedman in say, 1962.
When Al Gore received the Nobel Peace prize I knew that the Academy had tossed political objectivity and credibility out the window.
Thursday, October 9, 2008
Friday, October 3, 2008
How government stoked the mania---more from Russell Roberts
Russell Roberts (professor of economics at George Mason University
Tuesday, September 16, 2008
Pencils, Price Gouging, and Politics
I posted a comment on “price gouging” just yesterday and
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