Saturday, June 23, 2007

Democrats Offer Universal Health Care. Republicans offer ...

National Review has an article pointing out that unless the Republican candidates put forward an alternative to the universal health care proposals being floated by their opponents, they will lose the issue to the left. It is a good summary of the arguments against government-run health care, although it contains nothing really groundbreaking.

On a related note, Michael Cannon at Cato-at-Liberty makes an excellent point about insurance and free markets that I dearly wish I had made myself.

GEICO is for-profit. Like Humana, GEICO takes its customers’ money and every claim paid is a loss to the company. Those incentives are the same. Yet we don’t have an auto repair crisis. In fact, GEICO boasts on the radio that it pays claims so quickly, it steals other insurers’ customers. Why the difference?

I would venture that the main difference between auto insurance and health insurance is that you are ultimately responsible for the cost of maintaining your car. Auto insurance does not cover new tires or oil changes or routine repair. It covers catastrophic incidents, and any claim you make will be made knowing it will cost you a deductible as well as higher rates. With health insurance, most people expect it to cover every health-related cost 100%. Of course the costs keep going up!


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