If you infect one person, the social cost will be higher than that. So I guess $500 is a bargain rate.
The social cost?
Infecting one person leads to others getting infected, such as the person's immediate family. It can result in tens of thousnds of dollar in co-pays. It can lead to children losing parents, and so on.
Doesnt the flu do the same? So maybe we should protect people from the cost of social loss. The social cost of driving is awfully high, we should ban driving. Lots of people drown, let’s stop swimming. Add to that people that smoke, overeat, drink, we ban all of that then the social cost would drop considerably, wouldn’t it?