Over at Brad Delong's there has been some fervent expressions of opinions about this. Tar and Feathers were mentioned.

.... [C]onsider Elizabeth, who has just been diagnosed with breast cancer. Without insurance, she would purchase only the $20,000 mastectomy required to rid her body of the cancer. If she had purchased an insurance policy for $4,000 that paid off with a $40,000 cashier’s check upon diagnosis of breast cancer, she might purchase the $20,000 mastectomy and also a $20,000 breast reconstruction procedure. For economists, this behavior implies that the additional $40,000 in income from the insurance pool had increased her willingness to pay for the breast reconstruction so much that it is now greater than the $20,000 market price, causing her to purchase the second procedure. This moral hazard is efficient because she could have spent the additional $40,000 on anything she chose but opted to purchase the breast reconstruction. The purchase of this additional procedure represents a moral-hazard welfare gain to the extent that with the additional $40,000 in income, she would have now been willing to pay more than the $20,000 that it cost to produce the procedure...

This is about the 4th manifestation of this proposition. Brad picked it up from another site named  the Incidental Economist which in turn was reprinting an updated  2004 article from Health  Affairs...

As to the issue posed by it, whadaya think ?  I think it-like Paul Ryan's gift to political discourse-is anachronistic.The theory that empowering-  i.e. depriving of health care- Elizabeth will result in lower medical expenditures could have  been worth discussing in  1911, Today the chance that she could be terrified into becoming an efficient  do-it-yourself- evaluator of medical options is about  equal to her chance of becoming a self taught astronaught.Or Cardiac Surgeon.

Theoretically an insurance company could be that savvy buyer  but that fatally conflicts with its mission of increasing shareholder value. .. 

Or single payer could provide a skilled medical buyer who would actually prefer to keep Elizabeth among the living. . At least-and perhaps, only- while there's a democrat in the White House. Right now the relatively new conservative UK government is recreating the long waiting lists  which the talkradioheads claim to be a characteristic of socialized  medicine whereas in fact it's one of socialized medicine under a conservative administration.