There are many good ideas in this small article, which originally appeared here, however one may have wished the author had addressed the problem of moral hazard raised by his recourse to direct state subsidy in the case of patients with pre-existing conditions.
Otherwise it is a useful effort to relocate the concept of health insurance from the wonderland it now inhabits to the universe of reality occupied by homeowner and automobile policies, which do not pay for routine maintenance, whether it's scraping off the wrinkled paint or changing the oil.
In "‘Don’t Ask’ Is No Way to Run Health Care," Clifford S. Asness says
we haven’t been talking about insurance as we commonly know it.
True insurance comprises two things. The first one is a goal: to protect against very large losses. The second one is a method: the proper assessment and pricing of risk. ...
What we need is real insurance, yet our current system and proposals look nothing like it. ...
When people today refer to their health insurer, they mean the payer of all their health-care bills (ignoring deductibles and copayments). That isn’t how they refer to homeowners insurance, which generally only protects against large losses. ...
Health care is over-consumed because it is essentially, at the margin, free to employees and too cheap -- fully deductible -- to the company. All incentive for the consumer to control costs is abandoned. Furthermore, the system is nonportable and famously bureaucratic, with the associated costs in time, money and frustration.
To put the “insurance” back in health insurance, we need to remove the tax deduction for routine health-care expenses, whether the coverage is purchased by employers or individuals. If we choose to retain a deduction for insurance against large losses, it should apply equally to plans bought by individuals directly and those provided by employers. ...
Though you wouldn’t know it from the headlines, our system today, and our discussion of reform, isn’t about insurance.
Provocative stuff, about which you can read more at the link.
