Posner On Medicare

Richard A. Posner, Professor of Law at the University Of Chicago and federal judge, writes:

As a matter of economic principle (and I think social justice as well), Medicare should be abolished. Then the principal government medical-payment program would be Medicaid, a means-based system of social insurance that is part of the safety net for the indigent. Were Medicare abolished, the nonpoor would finance health care in their old age by buying health insurance when they were young. Insurance companies would sell policies with generous deductible and copayment provisions in order to discourage frivolous expenditures on health care and induce careful shopping among health-care providers. The nonpoor could be required to purchase health insurance in order to prevent them from free riding on family or charitable institutions in the event they needed a medical treatment that they could not afford to pay for. People who had chronic illnesses or other conditions that would deter medical insurers from writing insurance for them at affordable rates might be placed in “assigned risk” pools, as in the case of high-risk drivers, and allowed to buy insurance at rates only moderately higher than those charged healthy people; this would amount to a modest subsidy of the unhealthy by the healthy. Economists are puzzled by the very low deductibles in Medicare (including the prescription-drug benefit—the annual deductible is only $250). Almost everyone can pay the first few hundred dollars of a medical bill; it is the huge bills that people need insurance against in order to preserve their standard of living in the face of such a bill. But government will not tolerate high deductibles when it is paying for medical care, because the higher the deductible the fewer the claims, and the fewer the claims the less sense people have that they are benefiting from the system. They pay in taxes and premiums but rarely get a return and so rarely are reminded of the government’s generosity to them. People are quite happy to pay fire-insurance premiums their whole life without ever filing a claim, but politicians believe that the public will not support a government insurance program—and be grateful to the politicians for it—unless the program produces frequent payouts. If Medicare were abolished, the insurance that replaced it would be cheaper because it probably would feature higher deductibles…

Here is the whole post.

Professor of economics, Tyler Cowen, has more.

Professor of economics, Glen Whitman, has more.

15 Responses to “Posner On Medicare”

  • Insurance companies would sell policies with generous deductible and copayment provisions.”

    Generous and Insurance companies are three words I am not used to seeing in the same sentence.

  • Thanks , I’ve just been searching for info about this subject for ages and yours is the greatest I’ve found out till now.
    But, what concerning the conclusion? Are you certain in regards to the

  • Hmm it appears like your website ate my first comment (it was extremely long) so I
    guess I’ll just sum it up what I wrote and say, I’m thoroughly enjoying your blog.
    I as well am an aspiring blog writer but I’m still new to the
    whole thing. Do you have any helpful hints for first-time blog writers?
    I’d really appreciate it.

  • Ahaa, its nice discussion regarding this article here at this webpage,
    I have read all that, so now me also commenting at this place.

  • This piece of writing will help the internet people for setting up new blog or even a blog from
    start to end.

  • Do you mind if I quote a few of your posts as long as
    I provide credit and sources back to your blog?
    My blog is in the very same area of interest as yours and my
    visitors would definitely benefit from a lot of the information you
    present here. Please let me know if this okay
    with you. Appreciate it!

  • Highly descriptive article, I loved that bit. Will there be a part 2?

  • Hi there! This is kind of off topic but
    I need some guidance from an established blog.
    Is it very difficult to set up your own blog? I’m not very techincal but I can figure things out
    pretty quick. I’m thinking about setting up my own but I’m not sure where to start.
    Do you have any ideas or suggestions? Many thanks

  • What’s up to all, how is all, I think every one is getting more from
    this website, and your views are nice designed for new users.

  • Hi to every , as I am truly keen of reading this webpage’s post to be updated on a regular basis.
    It includes good information.

  • Hello everyone, it’s my first go to see at this site, and post is in fact fruitful in support of me, keep up posting these
    types of posts.

  • You actually make it appear really easy together with your presentation however I in finding this topic to be
    really one thing which I feel I might by no means understand.
    It sort of feels too complex and extremely huge for me. I am looking ahead for your next submit, I’ll attempt to get
    the hold of it!

  • Hey, you used to write excellent, but the last few posts have been kinda boring…
    I miss your great writings. Past few posts are just a little
    out of track! come on!

  • I used to be recommended this website via my cousin. I
    am now not positive whether this publish is written by him as nobody else know such distinctive approximately my problem.
    You’re incredible! Thanks!

  • Wow! After all I got a web site from where I be capable of truly take valuable facts
    concerning my study and knowledge.

Leave a Reply