Best thing we can do to rein in healthcare costs is a) Get rid of Obamacare and b) return insurance to its traditional roe of protection against catastrophe.
But in our current healthcare system, thanks to Medicare, Medicaid, and the tax code’s healthcare exclusion, most of us buy services with other people’s money and that dramatically distorts incentives.
Here’s some of what I wrote about this messed-up approach back in 2009.
…our pre-paid health care system is somewhat akin to going to an all-you-can-eat restaurant. We have an incentive to over-consume since we’ve already paid. Except this analogy is insufficient. When we go to all-you-can-eat restaurants…
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