Why We Should Separate Health and State

1. Why We Should Separate Health and State Bryan Caplan

2. What I Want to Abolish • Obamacare • Medicare • Medicaid • Health insurance regulation • Medical licensing • FDA • Much much more!

3. The Wisdom of Dr. Horrible Penny: But, he turned out to be totally sweet. Sometimes people are layered like that. There's something totally different underneath than what's on the surface. Dr. Horrible: And sometimes there's a third, even deeper level, and that one is the same as the top surface one. Like with pie.

4. Complaints About the Free Market • High cost – health care’s ridiculously expensive • Externalities – my health affects your health • Moral hazard – insurance encourages unhealthy and high-risk lifestyles • Adverse selection – the sickest buy insurance first, raising prices and risking a upward spiral • Consumer ignorance/irrationality – people know little about health; even worse, they make systematic mistakes, and blindly trust medical authorities

5. Complaints About the Complaints • High cost – regulation sharply raises the cost of health care • Externalities – most medical conditions aren’t contagious • Moral hazard – only a serious problem if government tries to equalize rates • Adverse selection – largely caused by government’s effort to equalize rates • Consumer ignorance/irrationality – Ignorance is easy to fix. Irrationality is a lot harder. But government makes it worse because consumers’ biggest systematic error is overestimating the benefits of health care!

6. The Family Analogy • Common moral premise for government health care: “A just society should be like a family.” • But within the family, you’re only legally obligated to care for your minor children and spouse! • If you’re not legally obligated to support your parents, why should you be legally obligated to support perfect strangers?