Sunday, February 16, 2003

Intergenerational Rip Offs

Now that the 2004 Presidential campaign is underway, we are beginning to hear the familiar call for universal health care. While I would not take issue with the ideal of covering all Americans, where I part company with universal advocates is on their insistence that it be implemented using a single payer plan in which the government is the insurer or the premium payer. There are, I think, a number of reasons to be opposed to such a scheme but I would like to focus on one potential outcome of such a plan.

Under a single payer system in which the government pays it would be the government that also determined what care was available and in what amounts, where, etc. Now, this probably brings to mind the rationing questiong, and it should. There is widespread agreement, I think, that the rationing we have now, based on health insurance status, is wrong. One can not, with a straight face, claim that single payer would not necessitate rationing of some form or another.

Just how would rationing take place? Government bureaucrats would receive policy directives from Congress and the President, probably spelling out pretty specific regulations. And those policies would be driven by politics, as expected. In other words, whoever turned out the most votes, gave the most campaign contributions, etc. would have the greatest influence over health care decisions. And just who is that in our system? The elederly! They vote at much higher rates than people between the ages of 18 and 40. It is not hard to imagine a major transfer of health care dollars from preventive to palliative care. Money would be diverted from prenatal care to the latest medical technology to make grandma live for another six months.

If you find this hypothesis difficult to believe think about this for a moment. The average retiree breaks even on his/her social security contribution, with interest and adjusted for inflation within five years. Life expectancy is significantly longer than five years after the age at which one is eligible for social security. In other words, after the first few years, our social security recipients are on welfare. This is an enormous drain on the public coffers. But any proposal to raise the retirement age or index benefits is met with stony opposition from the AARP and their legion of retirees. And their voices carry the day because young people do not vote and polticians lack the courage to stand up to powerful interest groups. Is this what we want our health care system to become, too?


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