Class 12 slides: Equity and Redistribution following Rawls Other conceptions of Welfare (151) Alternative Concepts of Utility (154) Cash versus In-kind Transfers (156) Implications for redistributive policy in the health care area (159-65) Analyzing The Struggle for the Soul of Health Insurance

Other Conceptions of Welfare: Equal Shares of Something Important …[to defend] the inequalities of many variables,…[theorist] needs to relate [inequalities]to equal consideration for all in some adequate substantial way….Sen (151) Equality versus fair or just distribution…Mooney (152) What is being equalized under utilitarianism? What should be equalized? Resources (Dworkin). Opportunity (Roemer). Capabilities (Sen).

Alternative (broader) concepts of utility (154-6) Why do people vote for their favorite candidate or contribute to charities in the face of overwhelming ‘free rider’ incentives? Commitment to projects that are not in ones self-interest (Amartya Sen) Two distinct altruistic motivations, “goods altruism” and “participation altruism” (H. Margolis) “multiple utility functions” (Henry Aaron)

Cash versus In-Kind Transfers of Wealth Why should policy makers pay attention to donor and taxpayer preferences to in-kind over cash transfers? –Because people that extend aid to the needy do so to alter their consumption patterns rather than increase their general welfare. (157) –Since in-kind transfers reduce the chance welfare recipients squander the payment, they encourage a more efficient redistribution of wealth (158) –In- kind transfers are less likely to change the consumption patterns and work effort of welfare recipients (158)

Three key implications for redistribution policy in the health area Providing Health Services Rather than Cash: Worldwide, social policy regarding transfers of wealth to those in need is conducted in a manner not consistent with what we might expect under the traditional economic model. Instead, in U.S. and other countries, donor and tax payer donations are more often as in- kind transfers. (159) Focusing on People's Health, Not Utility: Do people consider health as higher kind of wealth or resource? “Good health provides people with the opportunity or capability to achieve other desired things.” Perhaps because people consider health a ‘primary good’ policy makers support programs that seek to equalize people’s ability to obtain needed medical care. (160) National Health Insurance (163)

The Struggle for the Soul of Health Insurance Abstract: The politics of American heath insurance is a struggle over which visions of distributive justice should govern: the solidarity principle or the logic of actuarial fairness. Actuarial fairness is central to American private health insurance. It is both an antiredistributive ideology and a method of organizing mutual aid by fragmenting communities into ever-smaller, more homogeneous groups, leading ultimately to the destruction of mutual aid. This fragmentation is accomplished by fostering in people a sense of their differences and their responsibility for themselves, rather than their commonalities and interdependence. Actuarial fairness [in the US] has developed as a business strategy for gaining market share. Medical underwriting, which is far more extensive than commonly known, is the information technology used for implementing actuarial fairness. Despite significant changes in the political context of health insurance which are leading toward restraints on underwriting, the logic of actuarial fairness is so deeply embedded in the structure of competitive markets in insurance and so deeply consonant with social divisions in American society that eradicating it will take more than any current reform proposals contemplate.