Value-Added Health Insurance

[Hubbs]

Hubbs, if prices are not driven by a market, how can costs to the healthcare provider be?

What? The prices of health care are not driven by the market. The costs paid by health care providers most certainly are. What do you think they're doing when they bid on equipment? When they bid on labor? When they bid on medicine?

Either their is a market, or there is not. You can't have half a market. If prices are nto driven by a market then they are set by a trust/monopoly. If that's the case then I would argue that's the only thing that matters. In the case of the American healthcare system their are three trusts which control the market. 17% of the US economy.

You can have half a market. And the controlling powers problem is what I'm trying to solve. There's nothing wrong with providing medicine. In fact, providing medicine is quite the great thing to do. There's something wrong with a system in which health care providers bid for medicine based on price, but consumers don't in turn bid for health care based on price. (And also with a system in which consumers don't bid on medicine based on price, partially because they can't and partially because they don't have to because of health insurance.)

Insurance Companies, Drug Companies, and the Healthcare provider companies.

All part of the problem. Not because of the services they offer - again, health insurance is great, medicine is great, doctors are great - but because their prices are not a factor to most consumers.

Coarse the premise of your idea was for "Universal coverage", so I did not get your system was some how optional.

It's universal in the sense that anyone could sign up knowing full well that they'll only pay when their income allows them to. This is not true of any other insurance plan.

Even so for a libertarian to put the government in the center of their solution is odd, none the less. Especially a system where the government is in a position to pass judgment upon the positive or negative choices of consumers.... very distasteful to me.... The sin tax on cigarettes is one thing. But to expand the roll of governemnt to all aspects of consumer choices and arbitraily decide on how that effects the collective is especially so.

Again, this is countered by the fact that consumers will only participate in government insurance so long as the government insurance is beneficial to consumers. There's nothing preventing private companies from forming their own VAHI plans. In fact, I would very much expect them to, and expect them to largely take over for Uncle Sam.

The government is "the center of the solution" for the same reason that the government is "the center of the solution" to such problems as needing a court system and needing fire departments. The proper role of government is to provide the basic foundation upon which free markets can function. The VAHI plan is that foundation. If private businesses can perform better - as I assume that they would - then they should quickly form plans which are better for consumers, and the government will only be there as a last resort, which is what the government should be.

The government does not have a monopoly on credit. The governemnt regulates the credit market, there is a difference. I have a credit card with 8% interest, I have another one with 30% interest. Neither is a government credit card.

You don't understand how credit works. I'm not saying this as something detrimental about you - most people don't understand how credit works. They see things like a 30% interest rate on one card and an 8% interest rate on another and think, "The government doesn't control credit."

What they don't see is the fact that both interest rates are always, always, always higher than the Fed's targeted interest rate and higher than the government's Treasury bond interest rates. The forays of a few particular corporate bonds below Treasury interest rates are anomalies which are no different than the anomaly of investors briefly paying for the privilege of loaning money to the government. When you say that the market controls interest rates, what you're really saying is that the market controls interest rates above the rates set by the government. The government still controls credit - it just doesn't care to control credit operating in the realm it deems appropriate. Which, again, is quite the Marxist notion.

As for the federal reserve, it is certainly part of the government. It is a semi autonomous branch of government. One answerable to both the Executive and the Congress.

Exactly. And the Federal Reserve controls the interest rates on your credit. Just ask anyone who lived through Paul Volcker. The fact that the Fed doesn't choose to control the interest rates it "likes" is a symptom of the very fact that it likes those interest rates.