h a l f b a k e r yQuis custodiet the custard?
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This is an insurance scheme, sponsored by government, that anyone is free to join between the ages of 21 and 50, if they are healthy and have worked for at least 3 years.
You must sign a twenty year contract, and once you are in, there is no way out. If, during those 20 years, you become unemployed
or ill, you will receive extremely generous unemployment benefits for 2 years and state-of-the art medical treatment. However, if you do well for yourself and earn more than €40,000 per year, you must pay a very high insurance contribution of 50% of your income (in excess of the 40k).
The insurance can be renewed indefinitely in 10-year increments once you reach the 20 year limit.
The 20-year bondage is necessary to prevent leeching. Otherwise people would drop out of the insurance as soon as they become wealthy. The 3-year work and good health clause is there to prevent too many free riders from joining.
This insurance is aimed primarily at young people who are attracted to the idea of socialism. It will give them a cushy safety net for their adult lives, at the expense of giving up a big part of their income in case they become well-off.
Since it is voluntary, the more right-wing half of the population would have the choice to opt out and expose themselves to the undamped highs and lows of the free market. Since everybody gets (more or less) what they want, this would end the tiresome discussion as to what extent government should provide welfare (except for the few who are not elligible for the insurance)
The Beveridge Report (.pdf document)
http://news.bbc.co....07_05_beveridge.pdf
The foundation document for what, in the UK, has been called The Welfare State. Page 9, paras 17 to 19 contain the core principles of the scheme. [DrBob, Mar 10 2008]
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wouldn't lots of 48 and 49 year olds sign up in droves? Also, wouldn't many many people in low-wage jobs without great earning potential sign up? How would this be funded if not enough participants end up making decent money? |
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"wouldn't lots of 48 and 49 year olds sign up in droves?" |
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yes, but healthy life expectancy is almost 80 these days. |
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"How would this be funded if not enough participants end up making decent money?" |
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The insurance would pay whatever it can afford. And a lot of left-wing people DO make a lot of money. |
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"Also, wouldn't many many people in low-wage jobs without great earning potential sign up?" |
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yes, but this is not a problem, since you only need a minority of high-potentials, and they have no way of escaping once they are in. Even high-potentials live in fear of poverty when they are young, which would motivate them to sign up. |
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In my experience, young people do not generally fear poverty or sickness. Only as you grow older, your health actually starts failing, and you suddenly have a mortgage to pay or a family to provide for do these threats suddenly become real. |
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I'm not sure how well the math works out. Other than that, I wouldn't mind this at all. |
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I think you'd end up with a lot of people taking 2 of every 5 years off. |
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sorry, but insurance like this seems like it's betting against yourself; that you won't ever achieve a job that pays well enough for you to be able afford health-care, and that you will get sick soon enough in your life that you will have to use it....:p |
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"In my experience, young people do not generally fear poverty or sickness." |
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You are probably American. Here in the UK they certainly do, especially since the uncertainties that globalisation has brough about. |
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It always amazes me when I meet young Americans who say that "they don't need health insurance", and at the same time are scared to death of terrorism. |
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This kind of reasoning seems totally incomprehensible to me and the culture I was brought up in (Whaaaat the fuck are you going to do when you break a leg and face a $100,000 medical bill?? Is life really that cheap for you?). But hey, what do I know? I'm just a safety-obessed European. |
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I guess this business model might not work in the US ... in the UK, on the other hand, there are plenty of angst-ridden bourgeois socialists. |
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"sorry, but insurance like this seems like it's betting against yourself" |
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I would see it more like narrowing the bell curve of where you are likely to end up 20 years in the future. |
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By the way, isn't ALL insurance a form "betting against yourself"? Isn't that what they call "moral hazard"? I guess my insurance scheme suffers from some degree moral hazard, but that doesn't mean it's not viable. |
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I thought the US was the main target audience for this, since their health care costs are high, it's hard to get commercial insurance as an individual, and the opt-in policy addresses concerns about government-controlled health care that seemingly are stronger in the US than elsewhere.
People are worried about health care in the UK? NHS isn't working out for you? |
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//the more right-wing half of the population would have the choice to opt out //
How? You said it's "sponsored by government", which means it's funded by taxpayers, most significantly by those most likely to oppose socialism. It doesn't even come close to ending the "tiresome discussion", it just offers another way of making some people pay other people's expenses. The opt-in groups will be those who realise that they'll never be able to earn high salaries and those who have no intention of trying.
//NHS isn't working out for you?//
Hardly at all, actually. |
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//How? You said it's "sponsored by government"// |
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Oh, I didn't mean government-funded. I meant that the government would legislate to allow the 20-year bondage clause. |
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So how is it funded? You're offering "extremely generous unemployment benefits for 2 years and state-of-the art medical treatment" but you have no guaranteed income. Also, no legislation is necessary; a contract is a contract, and would be just as binding as a loan agreement or a lease.
There are just so many things wrong with this, on a practical level. |
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This example exposes the fundamental flaw with socialism.
there is no incentive to do any better than you absolutely have to. Most of the people who are on welfare now (a socialist program funded by the government) will sign up because they have no intention of making enough money to pay into the system.
The reason that health care is so expensive in the United States is that the industry has found out it can charge medicare (a socialist program) outrageous prices as long as it charges everyone else the same prices. If the government didn't foot the bill, the prices would go down to what the market would bear. |
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"there is no incentive to do any better than you absolutely have to." |
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I don't buy this old clichee. |
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Surveys have shown thar MOST people are less motivated by money, once they earn more than about 40k. After that the main motivation to do better is work satisfaction, and getting recognition for your work, rather than money. |
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The marginal utility of money decreases as you get richer. |
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"So how is it funded?"
The idea is that 20% of the members subsidise the remaining 80%. The assumption is that those 20% will join when they are young because they DON'T KNOW if they will be part of the 20% in future. |
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I've been thinking of the same kind of voluntary social services scheme myself for a while. I could totally see this working here in the U.S., I won't speak for the rest of the world. Actually I can't see it working, the government here can't do anything right, but it'd be nice to try. [+] |
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You acknowledge the diminishing marginal utility of money, yet you still expect subscribers to strive to increase their salary from 38k to 40k, knowing that their marginal advantage will then be even lower than it would be outside of your scheme.
I assume that the 20% doing the funding are those in the high-earning bracket. Who funds their benefits until they achieve this salary? You'll need a huge pot to begin with. The advantage of your scheme is that soi disant socialists would only be sponging off like-minded people, but I don't think that even socialists are unrealistic enough to fall for it. The whole point of socialism is to take from "them" and give to "us". As a lampoon on Champagne socialism, it's OK, in the manner of "A Modest Proposal", but that's as far as it goes, I think. |
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//People are worried about health care in the UK? NHS isn't working out for you?//
One reason I've chosen to live (and plan to remain) in the UK is the NHS. Private Healthcare is a dangerous thing - considering that once you've ever been diagnosed with something unpleasant, you have to pay inflated insurance costs forevermore - essentially, the insurance only acts as insurance until you become ill, afterwards (when renewing premiums etc) you might as well pay directly for your healthcare needs. |
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Speaking as someone who has definitely had their money's worth out of the NHs (and then some)....
acutally I have nothing whatsoever to say. |
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//In university, for instance, everyone has the same incentive to do well, but there is a wide range of performance.//
That's because universties don't give out Firsts regardless of effort; there's a reward for performance. |
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What incentive does someone who already has a decent well paying job have to join this scheme?
your entire thing will work only if those who joined reach the over 40,000 limit soon.
Also what happens if people take long 'vacations'? |
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a modification is to have a sliding scale of 40,000, based on past performance and education limits, you dont expect a surgen to join your scheme do you? |
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lots of other issues,
i can see my perfomance/promotion review going like this (assuming my salary is 38,000),
boss- Great work, i'm giving you a 20% hike.
me - That wouldnt be necessary, rather than the hike give me equivalent added benifits like club memberships, company car, company leased house, longer time off, paid vacations. |
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I've been pondering whether it would be cheaper to sponser a kid through med school than to pay health insurance. In this system, I think the math definately works out. |
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//What incentive does someone who already has a decent well paying job have to join this scheme?// |
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Long term security.
A health insurance that doesn't drop him as soon as he is no longer healthy. The certainty that he could feed his family through a recession. |
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However, I agree with you. Those kind of people are not likely to join in droves. That's why the target group of this insurance is young people |
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//Also what happens if people take long 'vacations'?// |
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That isn't really a problem. It's part of the deal and it is aready factored into the equation when people join. The _reason_ for taking a paid sabbatical isn't really that important. What matters is that people have the _possibility_ to do it, and this is what gives them a sense of security, and makes them less prone to bullying by employers. |
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Also, I think that only a minority of members would do this. Taking 2 years of "vacation" incurs huge opportunity costs, probably far higher than the financial gain. A two-year gap in the CV is not good for most careers, and interrupting pension payments isn't a good idea either. |
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//People are worried about health care in the UK? NHS isn't working out for you?//
The NHS is being privatised by inches. Over the last 25 years hospitals have been closed in many areas and healthcare standards now vary quite dramatically across the country. Hence the phrase 'postcode lottery' has crept into the language.
Whilst I am in favour of a 'national insurance' scheme, I'm against manicdictator's version. If people are to value such a service and receive equal benefits then they should all pay the same amount if they have the means to do so. So the graduated contributions idea is a non-starter for me.
Also, I don't like the phrase //the tiresome discussion as to what extent government should provide welfare//. To my mind, the government is not providing welfare, it is merely administering the scheme. It is the funds from the contributors that provide the welfare. A subtle distinction perhaps, but an important one. |
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//the government is not providing welfare, it is merely administering the scheme. It is the funds from the contributors that provide the welfare//
That may be the case if National Insurance contributions were hypothecated to fund the welfare state, but that's not the case. NI is just more tax into the exchequer, and welfare payments are just more government spending out of it. |
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// Perhaps you'd have a chance at implementation if the unused portion of your extraordinarily expensive premium structure went into high-yield retirement funds // |
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I agree. Needless to say, everbody who signs up would receive exaclty the same monthly pension. |
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