When I was first reading Mickey Kaus’ riposte to my argument that universal health care would be more affordable than he thought it seemed to me that we had some yawning disagreement about the nature of health care costs. Upon reflection, though, the disagreement is different. His vision of a universal health care system is one that will be sufficiently generous that even families in, say, the 89th percentile of the income distribution never feel inclined to make private expenditures for additional services on top of what the government provides and that won’t involve any potentially innovation-starving price controls. That, I’m inclined to agree, really would be very expensive.
And if you could really pay for such a system by severely means-testing Social Security benefits I wouldn’t have a particular objection to that. I don’t think that provides a case for pre-emptively slashing Social Security. The way, in practice, that you would get from where we are to where Kaus wants to go is that the politicians proposing the generous health benefit would either lowball the costs or else simply ignore the question of payment (see, e.g., the 2003 Bush Medicare bill) and then when it became necessary to cut something, means-testing Social Security would look like one reasonable approach.
Fundamentally, though, I find this an unlikely path to universal health care. I think it’s much more plausible that we’ll either put something together based primarily around individual- or employer-mandates (which is an idea that I think has a lot of problems but sharply reduces the need for new taxes by financing the system primarily through the de facto tax of the mandates) or else by continuing the upward creep in Medicaid eligibility (this would be my preference) which would lead to a system that’s universal, but not nearly as generous as the one he’s envisioning.