Sunday, January 12, 2014

Excuse Me, But I Don't Recall This Item Here On The Bill. Right Here. Yes, This One. This "Bail Out".

Via Tyler Cowen. McArdle on the inevitability of a health insurance industry bailout.


One of the reasons I didn't include the health insurance industry in my last post is that only through mission creep is the US third party medicine payment system able to be called "insurance" anymore. A third party that picks up the tab for routine care is not insurance. It is maybe a cost-smoothing service or something, but nobody's bothered de-conflating the language, so until some influential voice fixes this error, we're stuck with what we've got. Me? I'd go with "Medicus Fidenticus", but only after we knock it off already with the weird habit of coupling medical payment schemes with employment.

But that's not the EE-relevant point. My noggin-scratcher is if a bailout of health insurers will alter the moral intuitions the median voter has towards the PPACA. The caricature left-leaning supporter also has OWS sympathies and would probably be none too happy about another round of corporate bailouts (and most of them have their fingers crossed for single-payer anyway). The howling right-wingers will probably recline and cackle at the incessant hubris and stupidity of the incumbent administration (a pose easily discarded when their guy obtains office) and the cupidity of their cronies. But of course, the prospect of returning to the old status quo is not especially appealing to even the typical middle American voter.

Maybe that's the big uncertainty of the PPACA. It's not a matter of "we have to pass the bill to know what's in it", maybe it's a matter of "we know damn well what's in it, and it was designed to fail, so we don't know what'll replace it" that's the problem.

So most types of insurance as she is industrially organized is probably mostly euvoluntary. You don't hear too many cries of exploitation by auto, home, or earthquake insurance, but health "insurance"? That's another game. At least I think it is. Disasters like fires or floods destroy physical capital, whereas illness destroys human capital. There's a difference in kind of BATNA disparity. And it gets exacerbated as wealth accumulates, particularly intangible or shared wealth.

1 comment:

  1. Derivatives are valuated at the actual market price as well as the arbitrage free price, especially between international markets.


Do you have suggestions on where we could find more examples of this phenomenon?