An idea whose time has come (Updated)

Regarding health care in the United States, it's difficult not to be concerned that our day of reckoning is coming. The data are not promising.

What to do?

Not National Health Insurance;
Not piecemeal tinkering around the edges of the current "system";
Not laissez-faire in health care;

Rather, mandatory, private, health Insurance - "universal coverage in exchange for universal responsibility."

Why mandatory?
As things currently stand, If someone without insurance falls grievously ill, they'll likely go bankrupt, and have greater difficulty obtaining new coverage in the future - representing a greatly "increased risk" (or simply too much risk) to potential insurers. This puts the rest of us - as "society" - in the position of making the Hobson's Choice of passively "allowing" people to be ruined by an illness, or ourselves risking collective bankruptcy if we, through the mechanisms of the state, assume the burden of assisting all those who wouldn't have been ruined, had they been insured to begin with.

Why private insurance?
Initiative and accountability are preserved and evoked in the loci of responsibility - those individuals who provide, and those who choose between and "consume," insurance policies. The private sector is astoundingly more efficient and innovative than the public sector; since the two sectors exist in inverse proportion to one another, self-reliance and autonomy are safeguarded with a less costly and intrusive state. Economically, the risk-pool resulting from "universal" insurance contributions would have great "absorbent" power, especially to offset the losses consequent on the inclusion of the (strictly speaking) uninsurable. Particularly in the United States, a country so large and variegated, and in which a significant reduction in defense spending is a non-starter, a socialized system of coverage would be disastrous.

To make a fresh start, a goodly amount of legislative-regulatory juggling would need to be done in order to reconfigure exisiting insurance companies, somehow "effect" a baseline average price for a package of basic coverage, and mandate that no one could be denied on account of pre-existing conditions. Since the average price could initially be rather costly, a proportional tax-credit scheme would probably be advisable. Those unable to afford the baseline would simply be subsidized (or at least "topped up") by the taxpayer until such time as they were able to be self-funding.

A critic will complain, "but this will simply create a two-tier health system." Why two? - it would create a fifty-tier system, or a one-hundred-tier one. But the bare minimum could entail old-style "hospital insurance," as well as coverage for (actuarially) uninsurable, chronic conditions, such as Crohn's, AIDS, ALS, etc. I am not (especially) troubled by inequality, so long as those in the lowest echelon possess a viable minimum, and have a reasonable chance of raising themselves up by their own efforts.

While there is no panacea for the delivery of health care, via competition such a scheme would put downward pressure on costs, and address one of the gravest defects in current American health-care - the dependence individuals have on corporate entities (firms, unions, universities, government agencies, etc.); Null homme sans seigneur is morally objectionable, and increasinbly impracticable. Health insurance could finally become truly portable, without such monstrosities as COBRA. Furthermore, authentic insurance - provision for risk - could be de-coupled from the bloated, price-increasing, pay-for-everything variety which most people expect now as a matter of course; those that wish for "insurance" to pay for everything can - pay for it.

Similarly, the familiar ills of National Health Insurance (aside from its even greater "feudal" aspect ) - mediocre care for all, queues etc. - would be entirely avoided, as all individuals would have stronger incentives to economize with respect to their health expenditures (as they do with other priorities in life), and health providers would compete to provide the best care at the lowest price.

Here, it will be noted, I depart from libertarian/free-market orthodoxy - both in being willing to intervene in actuarial practice, and require that everyone be insured. However, I follow Wilhelm Roepke in distinguishing between "assimilable" and "unassimilable" interferences in the economy, and I am increasingly inclined to think in terms of "political economy" rather than simply "economics." It may be that there is no satisfactory, purely "economic" (= solely market-driven) approach to health-care. But, we ought to encourage initiative, evoke responsibility, and leverage the dynamism of market actors to the fullest extent possible - protecting individuals by constraining the state.

It would take real imagination and temerity for a presidential candidate to advocate such a course - instead of the same old nostrums.