Megan’s model

Megan from up the street in Sacto (that’s Sacramento for you out of town folks) thinks people don’t think enough about risk, they know too little about the various options available in the market and they don’t like to comparison shop and would rather some else would do it for them. She says,

You know what makes good sense for that model of the individual? Government based health care that does a decent job by me. You know what doesn’t make sense? For profit insurance agencies who do not have my best interests at heart.

My model of individuals is very similar to Megan’s. I think they have, what economists call, behavior anomalies. But where Megan and I part ways is in her suggestion that government has my best interests at heart. My model of government is that its filled with people that happen to have the same behavior anomalies as the rest of us. Why should I believe those people, with those flaws, will do better by me than I would?

(h/t MR)

UPDATE: VC has some better thoughts.

SUPER UPDATE: Megan (the one down the street in Washington D.C.) has even better thoughts.

9 thoughts on “Megan’s model”

  1. There’s a two-tier issue here: even if government officials have your best interest at heart, will they be able to do a decent job by you? And, secondly, what if they don’t have your best interest at heart?

    I think we should be skeptical in both situations, to a certain degree, not only in the second one.

  2. How does one comparison shop when they are part of an employer’s group plan, and can’t get individual coverage at anything approaching the same rates? What if they have been denied coverage outside of an employer’s group plan?

  3. Complain to the employer, get a new employer, etc, etc…

    But the status quo isn’t ideal. We shouldn’t give incentives for companies to sponsor health care.

  4. I actually wonder how that would play out. I guess coverage in sectors with tight labor pools would remain the same or improve, while sectors with bigger labor pools would see their coverage drop entirely. Hopefully, it would force insurers to compete by reducing prices for individual coverage, since their overall subscription rate would go down.

    Industries with large, unskilled labor pools already have ways of dodging compulsory health coverage requirements. Ask anyone who’s ever worked in retail.

  5. Neat insights in the super update. I agree that “boring” isn’t the best criticism of due diligence when evaluating goods for safety. I shouldn’t need a mass spectrometer and a culturing rack in my kitchen just to see if a pack of ramen is safe to eat.

    I seem to remember a section in Collapse (Jared Diamond) about private trade co-ops that granted a certification for sustainably harvested lumber. Over time, other groups were formed by competitors that offered similar labels, but had much looser standards. You might see lumber at Home Depot that had the “Green Certified” logo on it, the “Certified Sustainable Harvest” logo, or the “Eco-Friendly Green Carbon Friendly” logo. Which one would you choose (or would you just give up and pick the finest cheapest product)?

    If I were a corrupt manufacturer of lead toys right now, I’d be looking at ways to compete with Consumer Reports in the reputation markets. I wonder if “Dickens’ Choice” is a registered trademark.

  6. “Might it be cheaper to just, you know, improve the safety of your product?”

    You could do that, and leverage it in your marketing (Now Anthrax Free!). Or source your products/components from more reputable vendors with verifiable production processes, and leverage that in your marketing. Or don’t, and don’t mention anything in your marketing, and hope that rumors of your product’s failings don’t make it to the level of urban myth. Or don’t, and dump your product on a less regulated market that’s never heard of you.

    I’m reasonably certain that we’ll see “Lead-Free” or “Phthalate-Free” logos (or substitute the OMGscary compound of your choice) appearing on toys in the near future, even from companies not involved in the recent string of scandals. Kinda like “Low Tar” cigarettes.

  7. I dunno, their organs may absorb unacceptable amounts of lead when they are executed, making them poor candidates for transplant.

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