Arnold Kling  

Law, Legislation, and Medicare

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Medicare, Rationing, Food Stam... Medicare, Food Stamps, and Rat...

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?

The Hayekian answer is "yes," if people had long been accustomed to buying 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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COMMENTS (4 to date)
Matt C. writes:

Please correct me if I am wrong here. My understanding is that if you are part of Medicare you are not allowed, by law, to use your own money for treatments if Medicare has denied coverage. Is that correct or am I thinking about something else? If my understanding is correct, then there is a problem with Bryan's statement.

Alex Godofsky writes:

See also interfluidity on the property-ness of Medicare.

Arnold Kling writes:

Matt,
As far as I know, your impression is wrong. That is, if Medicare will not cover procedure X, you can pay for procedure X yourself and nobody will come and arrest you.

In Canada, my understanding is that it is against the law to use medical resources without the government's permission. The fear is that if people could spend their own money, they would use up the available health care providers, taking away availability from the government-run system.

Peter writes:

"I have said before that as individuals, we want unrestricted access to medical services without having to pay for them."

Except we pay for them, with every paycheck.

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