Regarding health insurance, health insurance is really not insurance it seems to be simply a payment system. It does not fully insure for catastrophic risk as there are caps of typically $2 million lifetime. Many middle class families breach this cap every year for a variety of reasons and file for bankruptcy. I would rather insure for true catastrophe say any health emergency that exceeded $10,000 per year. Such a deductible would likely lower my monthly premium to about $300. Less than half what my employer provided plan now costs. My costs have more than doubled in 4 short years. I think it is possible to structure a catastrophic excess policy whose premiums are very low.

If I had confidence that the charges on my hospital bill were market prices then I would gladly adopt such insurance. But until there are comprehensive reforms of how hospitals do business I wouldn’t accept such high deductible policies as I would be at the mercy of a bloated institution without incentives to innovate. Simply raising copays through high deductibles does not give a hospital incentive to innovate.

Translation: Win-win. No sacrifice. All gain, no pain.

Yes, we should invest where appropriate in better use of information (for both outcomes and cost containment), and yes, as Keith points out, incentives are an important element, too, but what is missing in the hyperpartisan talking points of those who imply that we just need win-win healthcare “reform” and the huge problem of the long-term fiscal impact of projected Medicare and Medicaid will mostly go away is that even with whatever net savings are produced via better use of information, more preventive care, universal coverage (perhaps single payer), etc., we will still (I strongly suspect) need to reduce entitlement eligibility and/or benefits to get our fiscal house in order. That means options like fairly broad means testing for Medicare and Social Security, higher retirement age, and reduced benefit levels vs. current law.

We need to reduce the influence of hyperpartisans who mislead the public or…

Get the hyperpartisans on the left to admit the necessity of actual sacrifice on entitlements or (if they can) produce credible analyses showing how we can adequately reduce our long-term fiscal imbalance without such measures.

Get the hyperpartisans on the right to either admit that we will need to raise tax revenues in terms of rates (and/or new categories of taxation) and as a percent of GDP or at least lay out with appropriate specificity how much less they would spend to adequately reduce our fiscal imbalance without any increase in taxation.