Health Insurance, Part I

Abstract

The Topic's Importance The social-insurance programs are the heart of the welfare state, and perhaps the most important of these is government-administered and -financed health insurance. Along with old-age or retirement pensions, spending on government-financed health care and insurance dominates contemporary welfare states' budgets. As I write this, government-administered and -financed health insurance seems politically entrenched: most people cannot even conceive of a (genuine) market alternative to the status quo in health insurance. If an intellectually solid case for market health insurance (MHI) can be established, then supporters of the welfare state should be on the defensive, as social health insurance is an institution central to their vision of the just or good society. I will make that case in this chapter and Chapter 4. It turns out that what many think of as the strongest argument for social health insurance – that it is more egalitarian than MHI – is the weakest argument. Social health insurance, or NHI, as it is often called, is much more unfair by egalitarian standards because it rations catastrophic care in favor of the knowledgeable, well-connected and well-motivated middle class, foists the cost of voluntarily assumed health risks upon others, and prevents those with different conceptions of the good from choosing different health plans that match those conceptions. Market health insurance, by contrast, has no government rationing of catastrophic care, gives people the freedom to choose different health plans, and prevents them from foisting their voluntary health choices onto others.