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How to fix the health-care system

Get rid of Obamacare. Deregulate medical insurance. Raise the eligibility age for Medicare. But wait! I'm not done. You then repurpose Medicare as catastrophic reinsurance for everybody. That preserves a private market for health insurance and increases individual incentives for cost-saving, taking care of yourself etc. But at a certain level of individual annual medical expense the reinsurance kicks in, keeping the most expensive cases out of the private system.

That makes the private system more affordable while shielding people from the cost of catastrophic illness. (UPDATE: It's also a political compromise between those who want to socialize everythig and those who want to privatize everything. You socialize the catastrophic part with a single payer -- Medicare. You keep the non-Medicaid, noncatastrophic part private.)

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This idea is not mine. It's from Kim Meyers via Tyler Cowen on Marginal Revolution:


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