I'm not the first person to suggest that insurance break markets. It does. And recently I had an experience that reminded me how retarded markets get once there are enough people with insurance.

So about a year ago I decided it was time to get newer glasses. I had used and abused a pair to shreds for about a decade. I had done every sport imaginable in them and been in every environment. They had been crushed, scratched, bent, bent back, re-glued with gorilla glue, been pegged by a basket ball, stepped on, skateboarding accidents, all about 30 times each thing in their lifetime.

So ok. I'll get some new ones. I'm a cheapskate so I started figuring out how little I can spend. Turns out not very little for my prescription. So ok, let's do the opposite. I'll invest in everything possible, best frames possible, then I'll take care of them. Just shy of $500 in the end. But now I have perfect glasses. Worth it I tell myself. I've cheaped out on a phone and invested in top glasses instead. I experience the world through them and they shape every social interaction I have. Easily smarter to get the best possible glasses than the best possible phone I say.

So now I'm babying these things, or so I thought. I'm dedicated to the idea I'm going to have perfect glasses. I'd spent a decade looking through scratches. If I'm going to spend a lot I'm going to look at the world with perfect vision, or at least as good as can be done.

But what I thought was babying wasn't anywhere close to enough. My gosh, you get rain or sweat on these things once it mineralizes and fucks the coating. Glasses already fucked within a year.

So now I'm thinking I do like having perfect vision. I'll double down one more time. Let's go somewhere cheap and ask them how much it would be to get two pairs. The most premium possible and one pair of the most junk glasses possible. Now the premium pair I don't even sweat in or get caught in the rain in. The other pair I do all the mountain biking, running, hiking, sports I want to do.

So what was the price for each of them? Identical. This is the Walmart optometry. $380 for the most premium glasses they can put together. $380 for the jankest possible glasses. Why? It's two factors. They are vision insurance and reinforcement by medical regulation.

I'm pretty sure most people with glasses don't have vision insurance but I think that may change soon. But the ones who do, maybe 1/3rd of the market, creates enough people with complete price insensitivity that the business model of "there isn't a cheap option" works.

See, businesses think in terms of margins, not prices. Even for medium ticket items like glasses, in a natural market they would only ever make a few tens of dollars margin after materials and labor. But if even a few customers in a market have zero price sensitivity they can get a hundred dollars of margin off of someone like that. Why couldn't they? And the margin you get off of that one person even if they were 1/10th of the market is enough to say, well, fuck those other guys. And if everyone else in the market does the same thing those other customers now don't have a choice but to give you that margin anyway. Now as everyone else is competing with you to get these price insensitive customers you have a reason to invest in better materials. Anything to attract these people who are only looking at the end product and not the price tag. So maybe your margins do come down a little after your costs go up. But this is no happy message to the rest of the consumers. Because prices have only one direction they are heading. Up.

If you get the insurance you aren't really saving money because the insurance company needs to make back their money on average. The end result is no matter how you pay for it, everyone is paying multiples what they should have to.

This is why medicine is so expensive in the US. It's the percent of people who have insurance. If you go to a place like Turkey, or Thailand, or Malaysia, places that have functional medical markets. You can get better care in a system that isn't over burdened, for a penny on the dollar.

I saw a video by Nomad Capitalist where he showed what you can get in Malaysia. You can spend an entire day getting checked over by an entire panel of experts and pay $60. That includes every test imaginable including imaging. To even get that much face time with that many experts over a whole day in the US would be 30k minimum. These are all top notch Asian doctors. Not slouches either.

Why? Yes, Malaysia has a better PPP (purchasing power parity). But that doesn't come close to accounting for it. The people in these areas don't have insurance and so they have functional medical markets. And they don't need insurance because medical services are cheap, even after adjusting for PPP.

This brings me to my point that there should be a tax penalty on insurance. Currently in the US we have the opposite. We have tax breaks, for employers, when they offer insurance benefits. In theory if it wasn't tied to your employer getting insurance or not getting it would be a half dozen or the other. Because they need to make back their money you'd have 50:50 odds if it was cheaper or more expensive to have insurance, when you weight for all the probabilities involved. It all depends if you value security or saving money more.

But the cost on society isn't break even. The cost on poor people is absolutely not break even. Now they get priced out of basic shit, and necessities. Now there is an argument for more government. Because poor people don't have access to a fair market, for things they potentially would struggle to afford even if it was fair. Not for discretionaries, but for necessities. So the choice is either establish a parasitic model in which the less fortunate need to have a handout or let children go without actual needs. So the choice to get insurance isn't even close to being externality free. So you should be paying extra into a pot to make up for destroying access for everyone else to fair prices.

Consider it a wealth tax. And if you don't want to pay that tax, at least you'll not have insurance in a fair market where things will be ok even if you don't.

Now if insurance is a coffin and a lid, the nail is regulation. Even if every US optometry had access to a sufficient number of price insensitive customers to run that model, in that case someone could easily buy a pair of complete glasses off of Amazon for $15. All it is are bits of plastic in the right shape. That can be made in Asia for $15 for sure. There is a finite number of specs glasses can have. You could buy them pre-spec'd and they would be close enough to be your sports glasses. BTW you can buy reading glasses from Amazon for that much. The only difference is the shape of the lens. They are already using optical grade plastic and forming it to a specific shape to do their optic magic. Change the shape and you now have prescription lenses.

But nope. That would be illegal because they are a medical device. The result of it being labeled a medical device + regulation + insurance, isn't consumer protection. It's a consumer fucking.

Let me get this straight. I can buy jack stands off of Amazon made of Chineseum, which if they fail a car lands on me. But if I put plastic over my eyes made by an Asian that's a danger?

Also I bought a welding mask off amazon for $15. It's also plastic that goes in front of your eyes with accompanying headgear. In theory, for the sake of eye health it is far more important that that $15 eye plastic does its job. Why can that be bought from Amazon, but vision enhancing eye plastic can't?

We even see commercials where if you buy a product $10 will be given to an African vision program. Where the $10 from your purchase will go toward providing glasses to three African children. It's not like the manufacturer is doing charity work. If you can make a $3 pair of glasses what would be wrong with me giving him $3 to make me a pair? Then I can still spend $400 on some premium glasses, but have a $3 pair to roll in the mud with instead of a $380 pair.

Now maybe using taxes to price people out of getting medical insurance and expecting them to face serious risk as a result is wrong. But for vision and dental insurance we should be using taxes to encourage enough people to participate in a real market vs a non-market, so that proper market calculation can happen. You could even make a scheme where this is used to subsidize non-insuranced purchases. I'm sure you could convince the optometrists and dentists to be happy enough with that scheme. Without that the ADA will probably threaten to shank your congressman.