A Rational, Self-Interested, Free Market Argument for Socialized Health Care

Private health insurance is worthless. Purchasing it does not benefit me.

Let’s say I purchase private insurance. So long as I don’t get very sick, it don’t actually get any benefit – as I could have just saved the money that goes into my insurance and paid for it out of my own pocket (and had the rest as, y’know, actual money).

So, the only way private health insurance could possibly benefit me is if I become so sick that the insurance company would necessarily lose money by paying for my sickness.

So all the people who actually need health insurance are people who are non-profitable for health insurers.

Which leads to a fascinating Catch-22: as any company whose objective is to make profit (all private health insurance) is encouraged to immediately cease to do business with me when it becomes apparent I need their service – because, as noted, I’m not profitable for them.

Even worse, the more sick I am, meaning the more I need their service, the greater their incentive becomes not to provide me with that service.

Furthermore, a free market can not solve this problem through the introduction of honest health insurance companies.

Any market in which an honest health insurance company must compete against a dishonest health insurance company, will have business flowing from the dishonest health insurance company to the honest health insurance company, as interested and informed individuals change their service. However, interested and informed individuals are the ones who need the service, and are thus by definition not profitable (as previously established). So honesty can only ever net a health insurance company reduced profits, ensuring their inability to compete in a free market.

Even a free market in which, somehow, only honest health insurance companies can resist this effect – as it is the nature of free markets to encourage innovation which increases profits, and there is no greater boost for the profits of a health insurance company than refusal to provide health insurance.

Ultimately, this means that I can not trust any health insurance company to actually provide health insurance – while there is a chance that I may receive health insurance if I need it, there is a chance I may not, and the very company which is supposed to provide me with health insurance would conspire that I do not get it.

Health insurance, like all forms of insurance, is a service in which I pay money in exchange for reducing my risk – in this case, my risk of not being able to pay for health care. However, private health insurance does not fulfill this function.

Instead, it shifts my risk – from the risk of being unable to pay for health care, to the risk that my private health insurance company will refuse to do so, leaving me without even the money I would have had if I’d never used private health insurance.

An insurance system that does not reduce risk is a nonfunctioning insurance system.

Furthermore, no amount of regulation can solve this.

Regulation is by its’ nature static and slow-to-adapt, while the market is quick to adapt towards the objective of increasing profits. The government can not be trusted to keep up with a dynamic and strongly motivated private system dedicated to refusing to provide me with service.

Furthermore, successive layers of regulation will increase the system’s complexity, ultimately making it easier for the highly-competitive private health insurance industry to scam me out of providing service, as I must not only contend with the health insurance industry itself but with the additional bureaucratic structures created by the government in an attempt to make public health insurance function.

So ultimately, all government can do to private health insurance is make it even more so a waste of my money.

So I gain nothing from private health insurance. The market can not fix this (and in fact enforces the worthlessness), and the government can not fix this. There is no way a private health insurance company can provide me with a service that I can trust and remain in business.

Ergo, private health insurance is worthless.

Meanwhile, the very problem that most plagues social service – a lack of profit motive which encourages unprofitable spending – is the only thing that can produce a trustworthy form of health insurance. If I need socialized health insurance, the government won’t care! They’ll happily pay the bills at my time of greatest need, not worried that I’m costing them money that they could conserve by simply letting me die.

The government does not need to make money – so they have no reason not to provide me with health insurance.

So I can trust them – socialized health insurance can function to reduce my risk of being faced with health care bills that I can not pay.

So, to reiterate:

Private health insurance: Absolutely, uncorrectably worthless for me.

Socialized health insurance: Accidentally perfectly functional for my needs.

As a self-interested, healthy member of America’s socioeconomic middle class, the only tenable option for me for health insurance is the government.

And I’m pretty sure that applies to everyone else too.

Now the question is: To flowchart this, or not to flowchart it?

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One Response to “A Rational, Self-Interested, Free Market Argument for Socialized Health Care”

  1. Naurgul Says:

    That would be one bloated unintelligible flowchart! 😛

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