Concerning the push for a public health insurance plan, Arnold Kling writes:

Getting people to reduce their use of medical services is the spinach of health care reform. Expanding insurance coverage is the dessert. The Democrats want to enact dessert now, and worry about spinach later. For the dessert part, they want no Republicans involved. Down the road, when they are ready to tackle the spinach part, they will press for bipartisan cooperation and statesmanship from Republicans.


If I were a Republican, I would support a public health insurance plan that provides real health insurance. That is, it would have low premiums, but extremely high deductibles and co-payments–beyond anything we see today. People on the plan would, on average, pay more than 50 percent of their health expenses out of pocket. Only people at the very high end of expenses would get insurance payments. [ed. note: I take it that Kling, who explicitly advocates the subsidization of insurance for the poor, is happy to have the relevant limits calculated in relative terms, as a percentage of income. - JS] Even their co-oayments [sic] would not drop to zero.

There are various reasons why such plans do not exist today. Many of these reasons are regulatory. I am not sure how such a plan would fare in a free market. But that is the kind of public plan I could get behind.

Me too, and I’m genuinely baffled by the number of liberals who insist that even in the absence of outright government rationing (which, of course, would be eminently subject to capture by the medical lobby), health care costs can be seriously controlled without creating direct incentives for individuals to question the value of various proposed expenditures and go in for the kinds of lifestyles that make medical treatment unnecessary in the first place. I’ll have another post up on the subject soon that will deal with a common objection to a proposal like Kling’s, but for now let the takeaway be the simple observation that it’s very difficult for things to be at once free and cheap; I’m certainly not insisting that making health care consumers into health care “shoppers” would suffice to drive down medical costs to the appropriate levels, but it seems to be an obviously central element of any health care policy that could ever really work.