Imagine you are writing a book about white supremacy. You obviously believe that this is a serious issue that society needs to work on. Whites hoard too much wealth and set our political system up to benefit themselves at the expense of everyone else.
Now imagine that you are writing this in a country that has a colored tax. If you are black, Hispanic, etc., some part of your paycheck is taken away and given to white people. In fact, programs earmarked specifically for whites make up over a third of the federal budget. Moreover, these programs are projected to grow to the point that, in less than a decade, they will be impossible to maintain as is, and our society will have to choose some combination of tax hikes and spending cuts as a result.
I would think that in such a situation, cutting white entitlements should be your main issue. But Samuel Moyn’s Gerontocracy in America doesn’t take that route when it comes to Social Security and Medicare. Rather, despite pages and pages explaining how the elderly are too wealthy relative to the young, he believes that entitlements need to be expanded.
The reasons he gives for this highlight the extent to which his book about “gerontocracy” is not ultimately about redistributing resources and power by age, but socialism. When anti-gerontocracy and anti-capitalism conflict, as in what to do about Social Security and Medicare, hostility to individual liberty and markets tends to win, although YIMBYism is an exception to this. One must ensure that when we dispossess old people, it has to be done in the service of building a more collectivist society where government takes a larger role in providing care, meeting people’s needs, and placing limits on the control private individuals have over resources.
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Asking libertarians “How do sick people afford healthcare?” is like asking progressives “What is a woman?” or conservatives “Who won the 2020 presidential election?”
If you want to save capitalism, your answer can’t suck for everyone except the ultra-rich. We all get old. Any of us can get cancer, suffer a terrible accident, or develop a costly illness.
The practical libertarian answer is too often: beg for charity, be financially ruined, or die. They talk about regulations making insurance expensive while ignoring that many of those rules exist to make insurers cover sick people. See all of Michael Cannons writing on healthcare.
The conservative movement and Republican Party are mostly in the same “get sick and die” camp if you’re the undeserving poor. They will cut Medicaid and taxes, but rarely confront the stationary bandits extracting the money: hospitals, drug companies, specialist cartels, licensing regimes, and other protected incumbents. Cutting benefits for poor people and taxes for rich people is easier than taking on entrenched healthcare interests.
The better libertarian message is abundance, not austerity. Make healthcare radically cheaper by attacking the regulations, cartels, supply restrictions, and incumbent protections that make doctors, drugs, hospitals, and insurance so expensive. Don’t tell voters sick people consume too many resources. Tell them capitalism can make healthcare cheap enough that getting cancer does not mean financial ruin. That is a political argument for capitalism.
Two minor demurrals:
1) Someone who has assets but can't (because of not having insurance) pay a large medical bill can be forced into bankruptcy where those assets could be forfeited. Someone who has no assets can declare bankruptcy and get off scot-free. I don't know how often this actually happens. The claim that medical bankruptcy is the most common cause of bankruptcy doesn't tell us how often bankruptcy occurs over-all, and much of the bankruptcy could be just people with no assets to lose telling the hospital, "You can't get blood out of a stone." Most hospitals and almost all doctors would just write off these uncollectable bills as bad debts, a cost of doing business.
2) An indigent uninsured person will certainly receive life-saving emergency care without regard to his expected inability to pay. Where it gets harder is for care for chronic diseases that aren't immediately life-threatening. Doctors have understandable incentives to limit the number of patients they take on whom they know won't or can't pay their bills for maintenance care. Unfortunately, expensive chronic disease is concentrated in low-income people, both by the distribution of the determinants of health working in the forward direction and the tendency of chronically sick people to drop out of the labour force working in the backward direction. There just aren't enough sick people who remain wealthy enough to pay their doctor bills and keep the medical workforce in the style it has become accustomed to after decades of insurance reimbursement for everything it wants to do. That's why so much primary medical care involves "preventive" care of the worried well who are more likely to be insured because working.
Over-all, you're right: medical care is expensive largely because of rent-seeking in an environment of market failure from asymmetric information. Even in Canada with its mandatory single-payer system that bans any private payment for medically necessary services, health care is the second-most expensive in terms of percentage of GDP spent on it, in the world.