Why We Should Separate
Health and State
Bryan Caplan
What I Want to Abolish
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Obamacare
Medicare
Medicaid
Health insurance regulation
Medical licensing
FDA
Much much more!
The Wisdom of Dr. Horrible
Penny: But, he turned out
to be totally sweet.
Sometimes people are
layered like that. There's
something totally
different underneath than
what's on the surface.
Dr. Horrible: And
sometimes there's a
third, even deeper level,
and that one is the same
as the top surface one.
Like with pie.
Complaints About the Free Market
• High cost – health care’s ridiculously expensive
• Externalities – my health affects your health
• Moral hazard – insurance encourages unhealthy
and high-risk lifestyles
• Adverse selection – the sickest buy insurance
first, raising prices and risking a upward spiral
• Consumer ignorance/irrationality – people know
little about health; even worse, they make
systematic mistakes, and blindly trust medical
authorities
Complaints About the Complaints
• High cost – regulation sharply raises the cost of health
care
• Externalities – most medical conditions aren’t contagious
• Moral hazard – only a serious problem if government
tries to equalize rates
• Adverse selection – largely caused by government’s
effort to equalize rates
• Consumer ignorance/irrationality – Ignorance is easy to
fix. Irrationality is a lot harder. But government makes it
worse because consumers’ biggest systematic error is
overestimating the benefits of health care!
The Family Analogy
• Common moral premise
for government health
care: “A just society should
be like a family.”
• But within the family,
you’re only legally
obligated to care for your
minor children and spouse!
• If you’re not legally
obligated to support your
parents, why should you
be legally obligated to
support perfect strangers?