The #2 reason this plan is a bad idea is the enormous amount of waste it would create due to moral hazard. Moral hazard is the technical term used by health economists, but it refers to something every reader intuitively understand even if the term itself is unfamiliar. If you give something to someone for free, they will use more of it and they also will be less likely shop vigorously for a lower price. In short, such consumers will typically use more and pay more (i.e., be willing to accept a higher price) for “free” services.
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