From Megan McArdle at Bloomberg, an alternative to standard medical coverage:
Warren Buffet pays his full medical bills, while low-income families pay very little, and folks in between can choose to self-insure out of savings. It creates something like a normal market to exert pressure on health costs, because people are spending their own money on treatment, not someone else’s. It obviates the need for a massive government price-setting apparatus, which means we can put our regulatory muscle into researching comparative effectiveness of treatments and transparency efforts to inform consumers about which providers and treatments offer better outcomes. And I think it might even be politically attractive because it’s largely voluntary.
Megan McArdle has become my second favorite thinker. There are three important ideas in the linked article, (read the whole thing) and a dental conundrum.
- Whether or not a person has medical insurance does not affect their health outcomes.
- Having medical insurance can save a person with catastrophic medical problems from bankruptcy.
- If the primary (or in fact only) benefit of medical insurance is financial why not establish programs to maximize this benefit and ignore the vast array of treatment regulations and restrictions that plague most every medical plan?
McArdle outlines a plan to do just that. She then explains how it will face political opposition from those who believe insurance equals care despite research to the contrary. And those who do not want to pay for medical care even when it is pointed out they do pay with premiums and taxes.
Now the conundrum. Dental insurance notoriously does not cover major dental expenses. If the benefit of medical insurance comes from catastrophic coverage and dental does not offer this where does the benefit for dental insurance actually lie? Is there a real benefit?