Arnold Kling  

Universal Health Coverage

PRINT
Senate Republicans: Give More... Private Security...

Is universal health care coverage possible? Ramesh Ponnuru of National Review says nay.


If you can't get an operation because your country's national health insurance system has you on a long waiting list, in what sense have you enjoyed "universal coverage"?

Jonathan Cohn of The New Republic says aye.

some countries with universal coverage don't seem to have waiting lists at all, even for elective procedures. It's hard to be 100 percent certain about this: France and Germany, for example, don't actually keep official statistics on waiting times. But that's because nobody in those countries seems to consider queuing a problem.

I think that it's an uphill battle trying to argue that universal health coverage is impossible. I think that the issue is that there is no externality argument to justify such coverage.

As I wrote here,


If the state passes a law that says that you have to pay for your family's health insurance, that's mandatory health insurance. If the state passes a law that says that you have to pay for my family's health insurance, that's universal coverage.

1. Let us grant that there is an externality argument for providing for health care for poor people. Poor people doing without health care makes me unhappy, so go ahead and tax me to pay for that. We do not need universal health coverage to address this issue, however. You may have heard of something called Medicaid. If it works for its intended beneficiaries, then fine. If not, then fix it.

2. Take it as given that some people do not want to pay for their own health insurance (many people turn down health insurance offered by employers, because they do not want to pay even the subsidized premiums).

Am I so distraught that there are people who choose not to get health insurance that I want to see the government force them to get health insurance? I am afraid not. Someone needs to make a persuasive argument why this is an externality. It strikes me that this is a much harder argument to make for health insurance than for car insurance.

(With automobiles, an uninsured motorist might cause an accident and then not be willing/able to pay for damages to someone else. This suggests a need for mandatory insurance, although even in that case I could be persuaded otherwise--I hate car insurance and I think it's a racket.)

But we are not talking about mandatory health insurance for those who shirk insurance. We are talking about universal coverage. What that means is that people who choose not to get health insurance should be rewarded with a health insurance gift from the rest of us. This seems to be an awfully peculiar basis on which to provide a government subsidy: those who devote their own incomes to obtaining health insurance get no subsidy; but those who choose to spend their incomes on other goods and services do get a health insurance subsidy.

I don't think my book on health care policy (which, by the way, just became available and makes a great gift) even mentions universal health coverage as an objective. Since I'm not trying to win the Nobel Prize in Moral Vanity, I don't see what the concept of universal health coverage has to offer.

UPDATE: for more on this topic, including data on the "voluntary uninsured," see this paper by John Goodman. He offers some important perspective:


A proliferation of state lawas has made it increasingly easy for people to obtain insurance after they get sick. Guaranteed-issue regulations (requiring insurers to take all comers, regardless of health status) and community-rating regulations (requiring insurers to charge the same premium to all enrollees, regardless of health status) are a free rider's heaven. They encourage everyone to remain uninsured while healthy


Comments and Sharing





TRACKBACKS (1 to date)
TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/501
The author at a r c u R A D I O in a related article titled Line of the Day writes:
    Daddy's busy, so chew on these: If the state passes a law that says that you have to pay for your family's health insurance, that's mandatory health insurance. If the state passes a law that says that you have... [Tracked on April 27, 2006 9:03 PM]
COMMENTS (9 to date)
John T. Kennedy writes:

"Poor people doing without health care makes me unhappy, so go ahead and tax me to pay for that."

Tax you? What's stopping you from simply giving your money to the poor?

Clearly you're concerned that left to choose freely people would not contribute as much to the poor as you'd prefer they do, but what give you the right to compel anyone to pay if there are other things they'd prefer to do wit their money?

aaron writes:

One thing I would like to see is for it to be made easy to stick with one policy. You should be able to keep your policy when switching employers and to keep coverage when unemployed.

quadrupole writes:

You said:

This seems to be an awfully peculiar basis on which to provide a government subsidy: those who devote their own incomes to obtaining health insurance get no subsidy; but those who choose to spend their incomes on other goods and services do get a health insurance subsidy.

Funny, isn't this exactly how social security works? Those who devote their own incomes to obtaining savings and investments that can support them in their retirement get no subsidy (if they are in my generation, their expected social security returns are negative); but those who choose to spend their incomes on other gods and services do get a retirement subsidy.

Adam writes:

Given that discussion, a case for universal health care would be reasonable for vaccination and treatment of contagious diseases, which clearly has an externality. No argument for general ailments, but I wonder if it would be politically possible, if there is a program of some kind providing government funding (not mandatory coverage) for treatment of contagious diseases, to keep the program from expanding to general health care.

Loweeel writes:

Arnold,

I think that quasi-compulsory vaccination, government subsidies for it, and statutes making the government rather than the vaccine companies responsible for the harms from compulsory vaccination, handles at least some the negative externality of of those without health care. Vaccination removes something like a negative network externality (as the value of the vaccine decreases with the number of people who are vaccined); without the {MMR, Hep A/B, etc.} vaccines, not only are we allowing free-riding on the vaccinations of others, we're reducing the risk of these diseases incubating and mutating within people harboring them.

Max Schwing writes:

The writer for the New Republic got something wrong. Germany does NOT have a universal health care service, at least not like Canada. It has state insurance companies (who still behave like heavily regulated private insurance companies) and private services ( I think France is alike, but I am not sure). So, most physicians live on those private patients, while they grudgingly accept state-insured patients. There are no long waiting lines exactly because there are still many young students of medical science, who think that the small private market will support them.
However, this is changing with the new laws made by the socialist alliance of the Socialdemocratic party and the socialist-christian democratic union (CDU).

So, instead of a nationalized universal health care, we still have differences and a small private insurance market. Also, you have the right to be uninsured, which is something not known in the Canadian system.

matt writes:

Why do such brilliant minds occupy themselves with this tired question? I'm not brilliant, so I'm allowed to. But OK, fine. I want universal oil change coverage, too. Is it possible? Sure, anything's possible. Is it going to work as well as the alternative of leaving folks to their own preferences? I'm in the middle of something, so somebody else can call Cuba and ask.

aaron writes:

Supply needs to be increased without increasing the marginal cost of providing it.

This means that we need to get more people into the medical profession without increasing salaries. Ways to do that are: 1)Increase the prestige of working in medicine. 2)Decrease the cost of entering medicine. 3)Change the workload to make medical jobs more attractive (identify tasks that doctors don't like doing and find other ways to get them done).

I think, aside from cutting out bureaucracy, we need to cut costs in education and training. Allow earlier and more specialization. Simplify and shorten the process of entering medicine.

Jonathan writes:

I've always heard from those in the industry that the set of those without health insurance make up most of the set who don't go in for regular check-ups, pre-natal care, breast examinations, prostate screenings, etc., and while it's not 1:1 that all of the people who don't get such things are uninsured, it's enough of a correlation to matter.

Now, it's unclear whether or not providing these people with health coverage would help, but what I've heard is that by making it clear that these preventive treatments are necessary and freely available to those who can't pay, you may be able to get more people to go in.

To society, this is a huge benefit. Otherwise they come in and invariably rack up huge charges for conditions that were at one time easily treatable, but which are no longer. In terms of pre-natal care, that's a gimme. Bad things happen in delivery rooms when there's no history on the mom or the baby. These things end up costing much more than they should have, the price of which is borne by the hospitals and the government, at costs far exceeding what could've been charged had the person simply gone in for care at an earlier, non-emergent time.

I could clarify and probably write this argument better, but suffice it to say, an economic benefit is in reducing greatly the number of people who incur massive medical expenses borne by the state in favor of treating them inexpensively at an earlier time.

Right now the only "free" care offered to these people is at the point when someone drags them into the ER.

For a (probably bad) analogy, consider a car whose automatic transmission has started shifting a little harder due to an undiagnosed leak in the system, causing it to lose ATF. In addition, I've failed to monitor the ATF levels, which are preciptiously dropping. Without even fixing the slow leak, I could've fixed the problem over and over again indefinitely simply by checking the ATF each morning and refilling it as needed, an incredibly inexpensive solution. Slightly more expensive, I have my local Jiffy Lube recondition the transmission for ~150 bucks.

But instead of doing that, I wait until the whole thing stops shifting. At this point it's too late - I need to take it to a transmission shop and have the tranny rebuilt. The cost of doing this may be more than the car is worth, and so by skimping on some early detection and simple solutions, I've effectively killed my car.

Comments for this entry have been closed
Return to top