End Medicare?

The Democratic Party election machinery, especially SEIU, is asserting that various Republican congressmen and women have voted to end Medicare as we know it. While this is substantially untrue, we could ask whether this a bad thing? The elderly needed health care insurance because health care insurance is generally tied to employment. Retirement often cuts that link, so along came Medicare to fill the void. But can we conceive of an alternative?

What we really need, in an age in which people both switch jobs more frequently and grow old is private insurance that is for a lifetime: insurance that gets started before most pre-existing conditions get started and lasts until the end, insurance that cannot be cancelled. Of course, we need the features of this insurance to meet other specifications as well. But we do not need Medicare at all.

What are the specifications needed for lifetime private insurance.

1. Very large natural groups. A natural group is one to which people belong naturally and cannot join or leave by choice. For example, all people born in Indiana would be a natural group.

2. Choice in terms of the nature of insurance policies. People in a group should be able to choose whether they want high deductibles or low, health care savings accounts or not, and so on.

3. Prices of health care insurance held down by competition for business in these large natural groups.

Focusing on health care insurance alone does not directly address the cost of medical care. That is a story for another time.

For an outline of insurance and cost reform issues, see my post on the subject.