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Originally posted by Mmmm, Burger (C.J.)
1) Buyers and sellers always have different levels of information, but that doesn't mean we should price-regulate in all circumstances. There is certainly an argument for it in some instances, e.g., emergency room care, and perhaps an argument for quality regulation (i.e., licensing requirements), but not wholesale. Even with a PPO plan, I shop around both for credentials and for price (i.e., are they in the plan). Why can't other consumers do that--it's 20% of the frickin' economy; people drive 5 miles to save a nickel a gallon.
2) Insurance contracts and employer tax incentives create the problem, and are not themselves market failure, but regulatory failure. I agree, however that they contribute to the problem. Take away the tax incentives then.
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Without insurance, any medical need that arose would bankrupt most families. Of course, I use the term bankrupt metaphorically, because that avenue is now closed off for most people. The fact remains, however, that insurance is an absolute necessity.
Deductibility of premiums is not a tax break. The deduction is allowed because payment of health insurance premiums as part of the employee's compensation is a necessary and ordinary expense, just like payroll.
Do you really think these things through, or is your reaction automatic any time someone suggests that governmental oversight may be a necessary component of rational distribution of scarce resources?
