Insurance vs Welfare

The current health care debate mingles insurance and social welfare. With insurance, the majority pays in more than they receive in benefits; payers hope that the bad thing being insured against (car accident, house fire) never happens. With retirement-oriented welfare such as Social Security, every participant expects to eventually become a beneficiary. Into which category should we place health care?

Both insurance and social welfare are only fiscally viable when a large number of people are paying in and a small percentage of people are receiving benefits out. Social welfare retirement systems around the world are headed for disaster as birth rates decline; what is now becoming clear is that health insurance is in the same boat, as more and more people expect to get more out of the system than they put in to it.

Realistically, even with crushing taxation (in the case of public insurance) or skyrocketing premiums (in the case of private insurance) a majority of policy holders will never be able to get more out of an insurance system than they pay in. Since that's the case, it should be possible for the majority to stop buying health insurance and start paying their costs out of pocket, and from a certain point of view that's true: health maintenance costs for a healthy person, such as a yearly check-up, don't add up to very much. Unfortunately the majority of people are not healthy; lots of us have ongoing medical conditions that require treatment, such as my asthma and seasonal allergies, or my friend's diabetes, or someone's kidney dialysis. Eventually almost everybody gets some chronic issue because we all grow old. What started out as health insurance has turned into a way for all of us to pay for ongoing care for, well, all of us.

There's an anarchist fantasy that says that we should all be able to pay for all of our care out of pocket. That's unachievable, but some of the steps that we could take in that direction would make things better for everyone. I think that will be the focus of my next few posts on this topic.