Good afternoon Monday listeners. This is the Cato Daily Podcast for February 5th and I'm your host

Anastasia Glova. This month Cato's online magazine Cato Unbound features a debate

about rethinking health insurance. The lead essay is authored by Cato

adjunct scholar Arnold Kling, who also wrote the book, Crisis of Abundance,

rethinking how we pay for health care, which is available from the Cato online

bookstore. Arnold discusses the difference between insulation and insurance in

today's podcast. You start your essay with the question how many American families have proper health insurance?

How many indeed?

Well, I would say actually less than 10%.

It's not just that there are people who are uninsured, there are many people who are really

overinsured.

That is, they are insulated from all their health care costs.

Whereas with insurance, they would only be insulated or protected against extreme health care costs,

the kinds that we used to call major medical.

What do you mean by insulation?

Insulation means that people don't have to worry about spending their own money at all on health

care. In fact, the United States, 85% of all health care expenses are paid for by third

parties. And when you're not spending your own

money you're not paying attention to the value of what you're getting compared to what it costs.

How can you make insurance companies accept individuals that are more likely to require

prohibitively expensive treatment?

The whole point is that companies offset the cost of ensuring the individuals who consume the

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