Take as an example, your argument in favor of licensing medical professionals. The premises as I understand them are as follows:
1. People in need of health care should receive scientifically approved medical care.
2. Unless the medical field is regulated then there will be individuals who attempt to defraud others by marketing harmful or non-helpful medical products and services.
3. Some people will not be able to distinguish between the charlatans and the legitimate service providers, and some of these people will be harmed.
4. So many people will be defrauded and harmed by charlatans that restricting everyone’s individual liberty through a government licensing scheme is justifiable because it results in the greatest good for the greatest number.

The fourth premise is where the ethical disagreement is most clear. I believe that restricting the liberty of individuals who wish to purchase or provide legitimate, unlicensed medical services is unjust. So the likelihood that some individuals would suffer because they make bad choices concerning their health care does not justify violating everyone else’s rights.

A more subtle disagreement arises in the first premise. You argue that government should differentiate between legitimate and illegitimate medicine by licensing the former and criminalizing the latter, but how should government determine legitimacy? Should government assume that any treatment that eliminates the target disease or corrects the defect is legitimate, regardless of whether it causes suffering or is morally objectionable to the patient? What if the patient believes that morality is more important than eliminating the disease? You see, before you can determine the legitimacy of a treatment method, you have to enshrine a particular medical goal. I strongly disagree that government should dictate to a patient or physician what his or her medical goal should be. Certainly, if a medical provider harms a patient by selling services which do not further the patient’s stated medical goals then there are grounds for legal action. Note that it is important to differentiate cases in which the medical provider harmed another intentionally, knowingly, or recklessly, from cases in which the medical provider’s actions caused harm through ignorance. The former case provides grounds for criminal punishment while the latter only provides grounds for civil damages.

Our foundational ethics disagreement leads me to disagree with your general comments about health insurance as well. I don’t think that the purpose of health insurance is “to pool risk among lots of people to protect the future sick at the expense of the future healthy.” That may be a social planner’s purpose for insurance, but social planners have no right to make decisions on behalf of others. An individual’s purpose in buying insurance is to ensure against his or her own potential risks. I don’t think that there is anything immoral about an insurance company refusing to insure a high-risk individual. Need does not give one individual a moral right to take from another. Otherwise, the hungry thief would be no thief at all. No one has an absolute right to medical care, and I don’t agree with the position that a healthy individual should be forced to pay for the medical expenses of the sick. It is certainly charitable for one person to assist another, the fact that we think an act is charitable doesn’t give us the right to force others to do it.

Ethics aside, though, is it clear that government licensing is the best method for eliminating medical fraud? What about private credentialing services, private rating systems, and personal relationships? Looking back to times prior to government licensing, was the problem of medical fraud a bigger problem than it is now? Personally, before I entrust myself to a doctor for any major treatment, I seek out recommendations and comments about the doctor’s reputation and expertise. The fact that the government has put its seal of approval on a provider doesn’t reassure me at all.

As to whether there really is a shortage of licensed doctors, consider the following article from The New York Times: http://www.nytimes.com/2009/04/27/health/policy/27care.html

In summary, I reject utilitarianism as an appropriate tool for moral judgment (I still owe you a broader explanation of why), so I reject the proposition that the need of one or many individuals can justify wronging others. Consequently, even if it could be shown that government licensing and government insurance would provide the greatest good for the greatest number—a claim of which I am thoroughly unconvinced (there are fatal incentive problems there)—I still believe that such a course of action would be immoral and therefore unacceptable.

Additionally, we’ve seen how easy it is for snake-oil salesman to peddle medical wares under the guise of homeopathy, alternative medicine, faith healing, or other non-scientific nonsense, some line dividing so-far-as-we-know legitimate medicine from known illegitimate medicine is valuable. I know I don’t have time to find & read scientific research on every possible treatment myself, so I’d like to know I can trust a medical practitioner upfront to be using real medicine (litigation thereafter is cold comfort). Note that you can still get homeopathy but you can’t get a homeopath to do surgery or prescribe drugs. I don’t see a problem with that.

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Obama’s plan will cost an additional $1T in the next ten years. That’s massive and we can’t afford it. However, according to a preliminary CBO estimate, healthcare can be extended to more people without a massive increase in federal liabilities. For example, the Wyden-Bennett bill would be “roughly budget neutral” and would sweep away other, less efficient, programs like Medicaid, CHIP, Federal Health Benefits Program, and State CHIP.

Is health insurance something the government should get into? I don’t know. It seems many people want health insurance but can’t qualify or afford it. At least for those who can afford, but don’t qualify, clearly there is some kind of market failure going on. For those who can’t afford health insurance, it doesn’t seem reprehensible to me for the government to step in, if we can prevent the costs from suffocating the country. Drawing the line between “can” and “cannot” afford is tricky, but that shouldn’t mean we abandon efforts to draw it.

Eventually I can’t see how we can stay away from a forced monopsony. As we find ways to learn more and more about our predispositions and likelihood of different diseases, defects, and conditions, we’ll chip away at the purpose of health insurance: to pool risk among lots of people to protect the future sick at the expense of the future healthy.

For example, if DNA testing is kept out of the hands of insurers, it will exacerbate asymmetric information problems and exaggerate existing moral hazard concerns. At some point if the testing is accurate enough, these problems will swallow up any health insurer. If this kind of testing is shared with insurers, the level of insurance will shrink to whatever “unknowns” are left after testing, and people with known high likelihoods of expensive diseases will be left to pay for care themselves or get whatever the government is offering for care.

So eventually, I think our current system is going to disappear and some force will be required to get the future healthy to pay for the future sick. This could be requiring health insurance for everyone, the way we require car insurance (although you can ditch your car if you can’t afford insurance, there is no analog for your body), or just insuring everyone with some universal government-sponsored plan.

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Back to scarcity, the claim (of which I’m not totally persuaded) that there are long lines for treatment, tells me medical care is underpriced currently – that is to say people are paying with time rather than money. If true, this tells me the problem is “time costs” don’t benefit anyone, thus don’t encourage entry into the field. To expand the number of people demanding treatment will drive up costs – either time costs or money costs. If we can hold down time costs, the increasing money costs *will* encourage more people to enter the medical profession – licensing notwithstanding.

The government is not incapable of affecting both supply and demand. For example, somethings which could be done to increase the number of providers include giving grants to medical/nursing/tech schools, subsidizing these students, providing tax breaks for new providers of healthcare, or many other things.

Ultimately if artificial labor scarcity is the primary cause of high costs, I’d prefer cost problems to greater quality of care problems.