The Social Security and Medicare Rationing on the Horizon

As the number of active workers supporting each retiree falls from three to two, there will be some hard choices to make. You either cut benefits by 33% or raise the taxes that fund those benefits by 50%. Yikes.

Open buffets result in more consumption than a-la-carte purchases and are the most expensive when everything on the menu is included in the buffet. And that’s exactly what we have in America, an open buffet of healthcare. Is it any surprise at all that medical costs are skyrocketing when the individual is incentivized to consume as much as he/she pleases? According to Michael Tanner in his article The Case for High-Deductible Insurance,

Today, of every dollar spent on health care in this country, just 13 cents is paid for by the person actually consuming the goods or services. Roughly half is paid for by government, and the remainder is covered by private insurance.

Of course our healthcare insurance pre-paid medical service plans are expensive. And since the individual’s consumption is just a drop in the bucket of the aggregate other 87%, restraint in consumption will do the individual no good as others consume away.

So when the demographics-based rationing comes, as it must, what will produce better utility for American consumers? Government bureaucrats deciding what is important, with individuals still incentivized to grab as much as they can get, or individuals deciding what is important, because they have to pay a substantial portion of the bill to get that runny nose examined?

It’s time that we returned health “insurance” back to genuine insurance, and stop the madness of the all-you-can-eat service plan.

in·sur·ance  [in-shoor-uhns, -shur-] 
1.the act, system, or business of insuring property, life, one’s person, etc., against loss or harm arising in specified contingencies, as fire, accident, death, disablement, or the like, in consideration of a payment proportionate to the risk involved.