Single Payer System

I want to discuss why a single payer system for health care is better than insurance.  I am not going to go into ethics or what people deserve.  Instead, I am going to focus on value and efficiency.

First, it is important to fully understand what insurance is.  On an individual level, insurance is a bet.  The house bets that an event will not happen.  The gambler bets that it will.  For the customer, flood insurance is a bet that there will be a flood that causes more damage than the cost of the insurance.  For the insurance company, it is a bet that such a flood will not happen.  On a group level, insurance is a form of welfare.  It is essentially a means for distributing costs (you have probably heard of distribution of wealth; well, insurance is a way to balance distribution of debt).  When the insurance company looses a bet, the money used to pay for the losses comes from the money all of the other customers are putting into the pot.  As gambling, insurance is no different from any other kind of gambling.  The house always wins, and they want you to spend as much as possible, which is why they offer so many different options.  As welfare, insurance is actually pretty awful.  Imagine a welfare system where those administrating it constantly skim the poor box.  This is more than just compensation for work.  Insurance companies have CEOs, other extremely highly paid management, as well as shareholders who walk away with the house winnings.  No well designed welfare system goes to such extreme efforts to avoid helping anyone, just to walk away with the unused funds.

In short, insurance makes extremely poor and inefficient welfare.  It makes excellent gambling, at least for the house, but unless gambling is the whole point, insurance is actually pretty awful.  Economically, there is one useful thing that insurance provides: jobs.  Of course, paying people to spend 40 hours a week digging random holes would provide jobs as well, and those jobs might actually produce real value (good exercise for the employees, if nothing else).  Work for the sake of jobs is just plain stupid.  If work does not generate actual value, then it is not worth doing.

The better solution is real welfare.  Real welfare is not gambling.  Done well everyone wins.  Real welfare minimizes work, to maximize the help it can provide.  Real welfare does not have executives that are paid more in a month than most people make in a lifetime, and it does not have investors who ultimately get paid from the work of others.

It is very clear that our current health care situation in the US is unacceptable (despite Obamacare).  Aside from reducing costs (which not even the government seems interested in), the only way to fix this situation is to spread the cost of health care out.  Insurance is a very poor way of doing this, because insurance is more about gambling than welfare.  Long term, the costs of insurance on the economy are far worse than the long term costs of welfare, despite the loss of jobs associated with eliminating health insurance companies.  Economically, a single payer system is superior in almost every way to what amounts to mandated gambling.