Saturday, June 27, 2009

The Current Advantage of Socialized Health Care

My debate with member, Order, found here, got me thinking about socialized health care and how it differs from private health insurance as it exists today.

Order's argument was that people would prefer the security of having a safety net provided by the government, over the higher probability of being wealthy provided by the free market. I disagreed, and still disagree, but the exercise of defending my position and comparing private vs public insurance led me to see an advantage that a government run health care system has over private health insurance, even though overall, I still see the private health insurance option, i.e. the free market health care option, as superior to the socialized health care option.

Basically, with a government run health care program, you are forced to pay a premium proportional to your income for your whole life, and in turn, you are guaranteed medical coverage for your whole life.

There is no analogous private option, simply because the legal mechanisms don't exist for a person to choose to enter into a life long contract with a private insurance company wherein a percentage of the person's income is taken by the insurance provider every month in exchange for a lifelong guarantee of coverage. For example, whereas the government can do an audit to verify your income, that option doesn't exist for private health insurance companies.

The reason for this is obvious. Society cannot trust private companies with the powers currently enjoyed by government tax collection agencies, and it is unwilling to socialize the cost of auditing individuals to verify contractual commitments of income sharing.

What I am wondering is, does a legal mechanism exist by which private companies could provide what government-run health insurance currently provides: a guarantee of lifelong health coverage in exchange for a percentage a person's income and the broad power to collect it, without the risk of granting private companies dangerous governmental powers, and without imposing a heavy administration cost on government in enforcing compliance with the client - insurance provider contract.

Perhaps one way to do it would be for health insurance providers, after paying a fee to cover the government's administration costs, to be allowed to offer lifelong contracts where their clients' premiums would be incorporated into their individual income tax, so that the government collects the insurance premium for the insurance company. There could also be a small surcharge, for example 2% of the premium, that the government would collect to offset the per unit administration costs.

This is just one quickly thought out proposal. Doubtless there are many other possible routes.

Regardless of the specifics of the program, the idea if proposed would be highly controversial, as in some ways it is similar to indentured servitude, in that a person voluntarily gives up some of their liberty in exchange for material compensation. On a close analysis though, it's not any worse from an individual liberty standpoint than government run socialized health care, and in fact would afford people with at least the option of not opting into a higher-taxation-for-life-in-exchange-for-guaranteed-coverage arrangement, something people living in countries with socialized health care don't have.