Who Should Pay for Health Care Reform?

July 14, 2009

Let’s begin with the assumption that government is going to pursue health care reform in a way that expands the role of government in that market. Let’s even assume that such a policy is truly correcting a market failure in a positive way. From a public interest perspective, there are some possible market failure justifications for this intervention, the key ones being: (1) paternalism, (2) public health, (3) lack of adequate competition in health care market, (4) adverse selection, moral hazards and other similar market failures, and (5) redistribution.

But from a benefit principle perspective, none of the first four justifications would seem to imply that only those tax returns earning more than $350,000 in adjusted gross income should pay for those supposed benefits.

Therefore, the only argument you can really make for the very rich being the sole group to finance greater health care expansion is if you believe that the current level of income redistribution from the very rich to the non-very rich is not large enough.

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