Comment by jmyeet
20 days ago
First, private insurance shouldn't exist at all. It is rent-seeking of the highest order. There's no need for it. The US is the only country that works this way.
But let's put that aside. What we have now isn't amarket distortion caused by using pre-tax dollars for employer insurance. It's that an employer can collectively bargain for insurance in a way that an individual never can.
If you have 100,000 people in a group then statistical norms come into play of how often you'll need to do a transplant or [insert expensive procedure here]. Plus you have the negotiating power to get better coverage at a lower price than an individual ever can.
So individual insurance can never work regardless of tax policy. Tying insurance to employment is bad for pretty obvious reasons. And this is how we return to "private insurance shouldn't exist".
>First, private insurance shouldn't exist at all. It is rent-seeking of the highest order. There's no need for it. The US is the only country that works this way.
Some other countries have private insurance as an option. For example, you can buy private insurance in the UK and some provinces of Canada if you want. Some people obviously feel it is worth it to them to do so (faster time to treatment, private versus shared hospital rooms, etc.). The difference from the US system is that there is a public system available without this expense.
It can be problematic even as an option. Now doctors have a conflict of interest because they make more money from private insurances than within the public system. It also needs to be finely balanced otherwise too much of the spending is through private companies, starving the public system of funds.
It can work, but it needs to be very carefully regulated.