Posted by Sir Four at 7:30pm Aug 12 '09Libertarians are vocal critics of healthcare reform as proposed by Democrats. But I've heard little about what the libertarian goal is for healthcare in America.
From talking on here, I've gotten the impression that one perceived problem is government interference distorting the insurance market. I would like to hear about more problems with the present situation as seen through the lens of libertarianism, but let's start with this one.
Insurance companies exist to make a profit. Indeed, it is the search for profits that drives all productivity, according to market theorists. But herein lies one major problem. Unlike 99% of products and services, insurance companies don't want to sell to everyone. They want to sell only to certain people. When Microsoft sells Windows, it maximizes profits by trying to get everyone possible to buy Windows. When Ford sells the Mustang, it maximizes profits by trying to get everyone possible to buy a Mustang. However, health insurers maximize profts by selling their product to some and denying it from others.
This makes the health insurance market an unusual case for market theory.
Additionally, health insurance companies can improve their profits by thinning their existing customer base. If you begin healthy but develop health problems, you are eating into their bottom line. Absent regulation that prevents insurers from dropping people when they become ill, there would be a compeling case for them to routinely drop their most expensive customers.
I personally cannot see how a situation would emerge in a completely unregulated market that would result in more, not fewer, individuals covered.
I am also unclear on the libertarian position when it comes to studying the effectiveness of various treatments and the creation of financial incentives rewarding cost-effective treatment. Also, the idea to decouple health insurance from employment, making insurance portable.
From talking on here, I've gotten the impression that one perceived problem is government interference distorting the insurance market. I would like to hear about more problems with the present situation as seen through the lens of libertarianism, but let's start with this one.
Insurance companies exist to make a profit. Indeed, it is the search for profits that drives all productivity, according to market theorists. But herein lies one major problem. Unlike 99% of products and services, insurance companies don't want to sell to everyone. They want to sell only to certain people. When Microsoft sells Windows, it maximizes profits by trying to get everyone possible to buy Windows. When Ford sells the Mustang, it maximizes profits by trying to get everyone possible to buy a Mustang. However, health insurers maximize profts by selling their product to some and denying it from others.
This makes the health insurance market an unusual case for market theory.
Additionally, health insurance companies can improve their profits by thinning their existing customer base. If you begin healthy but develop health problems, you are eating into their bottom line. Absent regulation that prevents insurers from dropping people when they become ill, there would be a compeling case for them to routinely drop their most expensive customers.
I personally cannot see how a situation would emerge in a completely unregulated market that would result in more, not fewer, individuals covered.
I am also unclear on the libertarian position when it comes to studying the effectiveness of various treatments and the creation of financial incentives rewarding cost-effective treatment. Also, the idea to decouple health insurance from employment, making insurance portable.
What is the Libertarian Solution to Health Care? - Sir Four