Law, Legislation, and Medicare

Bryan points to a 9-person forum on reforms to cut Medicare spending, which includes many good suggestions. He asks,

Is it "government rationing of food" if you can't buy cigarettes with food stamps?

Hayek drew a distinction between law and legislation. Law emerges gradually over time, based on custom. Legislation is what is changed by fiat.

Medicare, which has been around for most of our adult lives, has accustomed the elderly to the notion that they can have any medical procedure recommended by a doctor without having to pay for it. Any deviation from that custom would violate the law, in Hayek's sense. Hence, "government, keep your hands off my Medicare."

The status quo bias embedded in the public's view of Medicare creates strong political incentives against any reform. I have said before that as individuals, we want unrestricted access to medical services without having to pay for them. To the extent that we have become accustomed to health insurance that operates this way, this is embedded in law. Even though it is not sustainable, it will be very difficult to change.

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