However — I certainly hope that Dr Goodman’s tax credits are age rated. A flat $250 credit for everyone makes a young person’s insurance nearly free, and an older person’s insurance still unaffordable for many.

You and anyone else who takes interest in economics blogs are not normal consumers. Market based solutions to healthcare will work for those who can analyze, plan for, and set aside resources for possible needs many years in advance. Clearly, a significant number of people cannot do this consistently.

Markets can only work by accepting the notion of failure. In healthcare, that means a consumer failed to plan for the possibility of an illness that is now too expensive for them to deal with. There is no market based approach that will prevent this from occurring far too often for most of us to stomach.

I think those resolve themselves if 1st party payments became the norm.

I think previous government distortions have made 3rd party payment the norm and that is so engrained that any solution tends to try to preserve that. So, it’s not just because it’s too simple.

In my own experience, when I transitioned from full insurance coverage to HSA + high deductible plan, I was amazed at the questions I started spontaneously asking doctors and billing departments, how transparent things became (they’d answer them, to my shock) and just how easy it was to get discounts to make the fees very reasonable if you were paying out-of-pocket.

That made me think that if we went to more 1st party payments and let the markets work, we may even see a day where high deductible insurance would be bundled into product purchases, like how credit card companies provided travel insurance if you used their card to buy airline tickets. Maybe buy Coppertone sunscreen and you get coverage for treatments related to skin cancer exceeding $10,000.

One is division of labor. In this sense medical is very much like everything else. You don’t understand the vast majority of decisions that go into any product or service you purchase. However you do have to know enough. In fact a lot of doctors get informed about new treatments from their patients. Some only because of those “ask your doctor about X” drug ads bit others by highly motivated and intelligent patients.

Second is the idea that a doctor’s information on asymmetry makes it easy for them to sell you unnecessary procedures. I find this persuasive for high ethical standards for doctors but an odd justification for 3rd part payment with 1st and 2nd party decision-making, which is why the equilibrium always solves for some form of dea…I mean effectiveness panels.

Third is that neither doctors nor patients are on a position to know public health statistics. However it is their collective process that produces that information.

Healthcare markets are opaque
Healthcare is often almost impossible for non-professionals to understand
Healthcare is expensive
Our need for healthcare can remain non-existent for decades, but can also escalate without warning into five or six figure expenses, while at the same time our ability to earn money is compromised.

I think it’s an undertalked about point that democratic decision making in large groups has no inertial tendencies towards simplicity, no matter how much sense it makes.