Almost everyone thinks we should insure the uninsured. I don’t recall even a single dissenter. Yet it is precisely when everyone agrees on something that thinking begins to get very sloppy. So let me be the devil’s advocate and challenge the idea.
Why do we want to insure the uninsured? Forget about the costs, for a moment. Are there any benefits? What are they? I can think of four candidates. If people are insured:
- They may get more health care.
- They may get better care.
- They will enjoy protection from the financial effects of catastrophic illness.
- They will be less likely to be free riders on the charity of others.
The first three items are “it’s for his own good” benefits and, frankly, the case for them is pretty lame — especially in the context of RomneyCare and ObamaCare. If you expand the demand for health care but do nothing to increase supply, people in the aggregate will not be able to get more care. One person’s gain in care will be offset by someone else’s loss. (At least that tends to be the case, when the principal currency patients use to pay for care is time and not money.) Since the costs of non-price rationing will rise in the process, the whole exercise must make society as a whole worse off.
The same objection applies to the idea of “better care.” Better care for one person must be obtained at someone else’s expense, if the supply of medical resources is unchanged.
[I suppose you could make an additional argument: If we insure the uninsured, they will have a better chance of getting a “fair share” of health care. In other words, care will be distributed more equally. While that argument makes sense in the abstract, it doesn’t work if you segregate the previously uninsured into plans that pay providers below-market rates — as both RomneyCare and ObamaCare do — and cause them be pushed to the rear of the waiting lines. See below.]