No Tooth Fairy Either
December 12, 2011 6 Comments
As far as I can tell, in this post on long-term-care insurance, James Kwak goes to great lengths to lament that there is no insurance product offered by the market that will insure him against literally all conceivably financial risks related to aging, indefinitely, for the rest of his life. He has dug into it and discovered, shockingly, that there’s no natural market actor out there taking the other side of the ‘make geriatric James Kwak’s financial existence perfectly risk-free’ trade.
But it’s a thing James Kwak wants! Market failure! Gotta use government!
Now to be fair, Kwak does point out (and analyze, again, at great length) that there are very natural and understandable reasons why an insurance company wouldn’t and couldn’t credibly promise to Pay For Your Long-Term Care, Whatever That Might Mean (And Cost), For However Long You Might Live. The problem is, he doesn’t seem to apply the same logic and common sense to the government:
The government can offer unlimited coverage and real inflation protection (benefits based on actual costs at the time you incur them) because it has the ability to absorb long-term financial risks. It can mandate universal coverage, eliminating adverse selection. Because it can raise premiums (or other taxes), it will not go out of business.
Golly! Can the government give us each a baby unicorn as well?
The interesting thing about this argument is that it’s basically just an argument for socialism. The government can offer [whatever], and can mandate [whatever's needed to 'give' us the whatever], and it will not go out of business [because it can grab whatever] from us. What socialist program is that not an argument for?
Take a gander at Europe’s finances. Hell, take a gander at the U.S.’s finances. Where exactly has this attitude (=that ‘the government’ can magically insure, and create open-ended defined-benefit promises for, everything our hearts desire, because it ‘will not go out of business’ due to the ability to tax/inflate) gotten us? How far do things have to get before we stop being taken in by the puerile analyses of people like James Kwak?
The government certainly can’t give everyone full health coverage under the current health care system.
But if the government were willing to draw outside the lines, it could easily be done. Abolish protectionist medical associations, do away with the “md has to come from a prestigious school” idea. Then train medics on a truly epic scale. Like the way we trained soldiers in WWII.
The two problems of unemployed college grads, and shortage of specialists such as doctors, could instantly annihilate each other. Elite doctors from elite schools would be allowed to continue business as usual– provided they could convince enough customers to pay their high rates, that is!
But if the government were willing to draw outside the lines, it could easily be done. Abolish protectionist medical associations, do away with the “md has to come from a prestigious school” idea. Then train medics on a truly epic scale. Like the way we trained soldiers in WWII.
Here’s a classic case of post-hoc rationalization. The type of problems this James Kwak guy is talking about have next to nothing to do with the number of doctors currently practicing medicine. It hardly takes an “epic” number of doctors to spot, say, aggressive lymphoma, “protectionist medical associations” or no — hell, WebMD can do that. (And trust me on this: If you have aggressive lymphoma, you’re going to see more doctors than you can stand within a week or so).
The problems Kwak is talking about deal with expensive treatments, drugs, etc., of the kind often euphemistically called “end of life care” — i.e. really expensive stuff that’s statistically unlikely to do much good, and which insurance companies therefore are unlikely to pony up for. The only way “train[ing] medics on a truly epic scale” via some kind of national physicians’ boot camp could be considered a solution to these problems is if the end goal is simply to get government more involved in heath care, full stop. Which is what 99% of the disingenuous arguments for ObamaCare — which is to say, 99% of ALL arguments for ObamaCare — are designed to do.
But don’t you know? More doctors = more health, merely by their existence! It’s like that magical “health” bottle you get in video games. Also, government can just print more money to pay for everything. We don’t need the stupid market or have to do dumb stuff like take responsibility for our own lives!
My unicorn will be here any minute.
I’m glad I’m not the only one who noticed that Xamuel is addressing a different question. To be fair to him though I would actually agree with him that something like a lack of doctors – or rather licensing, barriers to entry, and constraints on the medical profession of all kinds – probably contributes to high health care costs. But the solution to this problem (i.e., too much government) is clearly less government, not some sort of Doctor-Peace-Corps. It’s not that we need to forcibly or actively train more doctors, it’s that we need to let more people become doctors. But it’s hard, and harder than it needs to be. (I have worked with doctors. NOT geniuses.)
So I’ll actually agree with him that we ‘need more doctors’ if he’ll agree with me that the REASON we don’t have ‘more doctors’ comes from artificial government-related restrictions on who can become a doctor (or more generally, practice medicine) and how. But, he won’t.
Back to the issue at hand, what I was really objecting to in Kwak’s post was this idea he seems to have that it should be possible to insure-away ALL risk in some scenario. He simply makes a laundry list of All Possible Things That Could Happen – what if costs go up, what if inflation goes up, what if the company goes bankrupt, what if he lives to be 130, what if..what if. At some point that list of risks inevitably becomes long enough that no market actor would or could sanely promise to take the other side. So what? That’s life. Life is risky.
The idea that there should even be a magic contract somewhere out there, that James Kwak could sign, that James Kwak could afford, that would insure him against all possible forseeable risk for the rest of his life, is clearly a puerile fantasy.
And so that’s where government comes in.
At some point that list of risks inevitably becomes long enough that no market actor would or could sanely promise to take the other side. So what? That’s life. Life is risky.
Yeah, but it shouldn’t be, darn it! And we’re going to whine and legislate and mandate and Occupy until everything everywhere is 100% risk-free.
That’s the most baffling thing about “Progressives,” for my money — the state they’re trying to “progress” to is absolutely static. There’s no risk, no reward, no hurt feelings, no incentive to do anything, and no difference of opinion (because thoughts contrary to The Collective cause pain). There are these giant categories — Black and White, Gay and Straight, Male and Female — and everyone in each category believes exactly the same thing and behaves in exactly the same way. We all queue up for our government-mandated everything (education, “job,” health care, pension, food, shelter). They love to talk about “struggle” and the the nuancey nuances of their uber-intellects, do our Progressives, but their ideal society is nothing but a giant — but risk-free!!– hamster wheel.
Weird, no?
Sorry for the very late response to this, but yes. I’ll certainly agree with you that the government should meddle less in who can practice medicine. That’s not to say they should completely stop– they should meddle in it as much as they meddle in any other business, which is to say, enforce basic false-advertising laws so people can’t outright sell snake-oil. Besides that we’re in complete agreement.