It's sort of a shame that Ramesh Ponnuru's article on health care is behind The National Review's* subscription wall, as it's a very serious exploration of the issue that's fairly notable in its stubborn refusal to engage in the usual demagoguery (When's the last time you heard a conservative say, "Even the single-payer proposal is less radical than it may sound. It would make explicit the current system’s prepayment and socialization of costs, while reducing its administrative costs and its penalization of people with pre-existing conditions."). I'll probably do a few posts on it, but for now, this is an important graf:
The very fact that the tax code encourages employers' provision of insurance introduces another distortion. If workers were buying a policy themselves, with no tax break to affect their decision, they might prefer a cheap policy that covers only catastrophic medical expenses while leaving them to pay for routine care out of pocket. But the playing field isn't level: Your incentive is to have as many of your health expenses as possible qualify for the tax break, which means you want your employer-provided insurance to cover even routine expenses. Health “insurance” is no longer primarily a matter of insuring against remote but predictable risks, but of prepaying for health expenses. Instead of hedging risks, it socializes costs.
For the moment, I'll leave out the likely policy outcomes of the first few sentences, which would see a deterioration in coverage among the young and healthy, leading to rocketing prices among the old and sick, leading to a huge class of individuals being priced out of health insurance.
But in that last line, Ponnuru gets to the heart of the debate: Liberals really do craft health care policy with the intent of broadly sharing costs. The idea is that everyone should be able to afford care and coverage. Conservatives are trying to move towards a system where we pay basically what we owe, with insurance acting -- for those who can afford it -- as a check against ruin. Both systems create winners: In the conservative vision, it's those who are healthy and/or young and/or lucky and/or conscientious. In the liberal vision, it's rather the opposite. A liberal will tell you that, eventually, we're all going to be part of that opposite group, and that's the moment when policy should protect us. A conservative would say that sets up incentives to ignore your health and overuse care. But that, on a policy level, is the debate.
*Incidentally, I subscribed to The National Review a few weeks ago under the rationale that I need to follow conservative commentary, rather than just liberal commentary about conservative commentary. I haven't regretted it.
