The trademark of the Administration’s approach to health reform is to point to problems and then propose solutions that do not solve them. For example, in response to the problems of cost, quality and access, Obama Care almost certainly will result in higher spending, lower quality and less access (at least for poor people). The individual mandate fits this pattern.

The case for government action is what economists call the “free rider” problem. Left to their own devices, some people will avoid buying health insurance and avoid self-insuring and consume all their income instead. Then if they develop expensive-to-treat conditions, they will throw themselves at the mercy of society as a whole. Since most of us are not indifferent to the suffering of others, we chip in and pay for the treatments. But this rewards the free riders (allowing them to be effectively insured without paying their fair share) and encourages others to become just like them.

Now, if you think this is a problem — and even if you think it is a serious problem — the type of mandate being proposed on Capitol Hill does not come even close to solving it.

Continue reading at the John Goodman Health Blog