Can't do it.

I recently saw the following article
(This came by way of http://www.thehealthcareblog.com/)

In this article, it asks:

Almost all the problems with the American health care system boil down to two questions. How do we create a system that ensures that all citizens, and perhaps residents, have access to health insurance? And how do wecontain the huge cost increases?

I don't know what you call this rhetorical trick. I suspect it has a clever name, but I don't know it. In any case the author is laying out two questions and expecting a favorable answer to both. But these questions can't both be favorably answered. A favorable answer to one, is the negative question to the other. The author might as well ask these two questions: How do we create a road trip that ensures we end up south of our current position. And how do we simultaneously ensure that we end up north of our current position?

The problem is that the author doesn't understand the concept of insurance. Arnold Kling correctly points out here that what we have in our country isn't insurance, it's insulation. And as such giving insulation to everyone is equivalent to ever increasing costs. If you want to contain or decrease costs, you have to *STOP* giving insulation to everyone.

The author even has a section titled "reforming insurance" that, ironically doesn't talk about reforming insurance. Instead it talks about the need to regulate insurance as it currently is without the need to change actual health insurance.

I find myself in agreeing with Kling, and not with ABC News. Until we are able to unleash the entire population all demanding that their costs be contained, costs will not be contained. The *ONLY* way to get the entire population demanding this is if each member of society is individually motivated to contain those costs. As long as we're insulated from the actual costs of health insurance, that motivation will not be sustained.

I'm hopeful (possibly naively hopeful) that the system will fix itself through a gradual collapse. This year I switched insurance plans to a program that required that my family bear more of the day-to-day costs of healthcare. But that still provided coverage for catastrophic health events. I did this because my employer is continuing to pass the costs of health insurance to me. And when investigating the alternatives, I found one that had a much lower premium while still providing coverage in the event of a catastrophy. Along with that lower premium came more day to day responsibility from me. I'm betting that the amount of money I save in premium costs will more than make up for the increased day to day costs I'll encur for the next year.

I'd like to think that the increasing costs of health insurance will create incentive for people to look for other solutions. And that over time, the currently broken system will incentivize itself out of existence. The counter argument is that what will actually happen is that most people, instead of searching out lower cost alternatives, will simply drop health insurance altogether. They will then become a part of the pool of people looking for the government to subsidize their health costs.

I don't know which way it's going to go. I fear universal health care. The Canadians aren't doing so well with it. I loath the idea of governmental tampering. But I'd rather a little tampering now (to reform health insurance) instead of being forced into enormous and permanant tampering later (i.e. universal health care).