HillaryCare 2.0
My erstwhile Bloggingheads.tv counterpart, Ezra Klein, has an interesting piece in The American Prospect arguing that John Edwards’ strong early support for an aggressive overhaul of the health care system is forcing other Democrats, notably frontrunner Hillary Clinton,to do the same.
He starts with an analogy, arguing that Edwards is playing the role of Harris Wofford, the Pennsylvania Democrat appointed to fill John Heinz’ seat after he was killed in a plane crash and then went on to win in a stunning upset when he had to stand for election.
The secret of his remarkable victory? A 34-word catchphrase that pithily expressed the agonizing injustices of our health care system. “The Constitution says that if you are charged with a crime, you have a right to a lawyer,” Wofford kept telling the voters. “But it’s even more fundamental that if you’re sick, you should have the right to a doctor.”
Two things immediately strike me about this example. First, Wofford didn’t actually get his plan enacted into law. Second, the slogan may have been effective in garnering votes but it has to rank very high on the list of the dumbest things ever uttered by a politician.
Despite a strong predisposition toward laissez faire economics and the power of incentive, I’m sympathetic to the argument that a society as wealthy as ours ought to be able to provide basic health coverage to the downtrodden. The reason the Constitution guarantees free lawyers to criminal defendants* but not free doctors to the sick is not because we think the former provide a more worthwhile service but as a check on the power of the state. With rare exceptions, the state doesn’t make us sick; in all cases, however, criminal defendants are there because of state action. Ensuring that those at risk of life, liberty, and property because of state action have adequate legal representation is, therefore, fundamental.
That said, I agree that debating the government’s role in the health care system is worthwhile. Ezra summarizes HillaryCare 2.0 thusly:
Her plan includes an individual mandate to ensure universal coverage, offers all Americans access to the same menu of regulated private insurance options that members of Congress use, creates a new public insurer based off of Medicare that anyone can buy into, bars the insurance companies from price discriminating based on preexisting conditions, and uses refundable tax credits to limit the percentage of a family’s income that health costs can consume (a more detailed summary of the plan can be read here, the full plan can be downloaded here.).
Kevin Drum has some wonkish disagreements with the plan but figures he can only chose from among the plans proffered by the three leading Democratic presidential candidates and finds Hillary’s “not just substantively as good as any of them (and better in some ways), but also the politically savviest and most practical of the lot.”
Gabriel Malor is much more skeptical of the details, wondering “whether Clinton plans to criminalize failure to purchase health insurance in similar manner to auto insurance.” Certainly, as with Edwards’ plan, the implementation details are tremendously important.
None of these plans will get passed anytime soon. While I understand the appeal of a universal pool, forcing people to buy health insurance is a non-starter. And it’s simply idiotic to deny insurance companies the right to charge people different rates based on their existing health; the entire business is one of calculating risks.
Ultimately, these plans are solutions searching for a problem. Simply expanding Medicare so as to cover those who fall through the cracks of the current system makes loads more sense than trying to overhaul the entire system. Most of us, after all, are reasonably happy with our current coverage.
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*It’s actually a lot more complicated than this but it works as a shorthand. See FindLaw for a more nuanced discussion.
It shouldn’t be a for profit business at all.
It’s disgusting to have an entire industry predicated on the principle of gambling on people’s health, like they were slots in a roulette table, and with massive financial incentives to deny their clients medical care whenever possible.
The problem isn’t that we don’t provide free doctors, it’s that only a very small percentage of Americans can afford doctors outside of regular physician checkups. Hell, each one of my children’s births ran up $100,000+ in hospital charges.
If healthcare was something average people could afford, the Government wouldn’t need to provide it. Even with insurance, average people are declaring bankruptcy because of medical bills that insurance declines to cover. I got stuck with $10k of that $100k for each child, I’ll probably be paying on those for years.
“And it’s simply idiotic to deny insurance companies the right to charge people different rates based on their existing health; the entire business is one of calculating risks.”
This points to a fundamental weakness in the free-market approach to health insurance. Of course it would be totally irrational for a health insurer to offer a policy to someone who is highly likely to incur costs. Given the rapid advances in genetics, which will lead to all of us having our sequenced genome as part of our medical records in the near future, this problem is going to get a lot worse. If you are sick, or have a predisposition of disease, you cannot expect to get coverage.
The only options seem to be 1) live with that system (easy for healthy people who already have insurance to take that position, I suppose – 2) completely junk the private insurance approach to health care – or 3) impose some mandates to limit the power of insurance companies to deny coverage.
It may be “idiotic”, but do you really support the other options?
“Simply expanding Medicare so as to cover those who fall through the cracks of the current system makes loads more sense”
Prediction: In such a system, insurace companies will go whole hog cleansing their rolls of all but the young, super healthy with great genes, with the knowledge that Medicare will be there to pick up those they dump. As more and more people fall under Medicare, and as taxes to support this system get higher and higher, it becomes less rational for any individual or business to buy private insurance – given that they are paying for Medicare anyway. Great way actually to bring about a national health insurace system on the sly.
No need to wait for the future to get here. I have an autism spectrum child, and I can’t get any private insurance to cover him.
Why are those the options? We have to completely junk the system because a relative handful of people aren’t served well by it? Why not just close the gap?
Food and housing are something average people can afford and government still provides it for the poor. Yet, remarkably, we don’t socialize the grocery stores; we just provide vouchers for the poor.
Politicians seem to offer us silver bullets rather than gradual corrective steps that can be modified based upon success or failure. Why is that? To get elected, not because they really believe in what they are saying. The cure (like the cure for many market failures) is a series of small steps that add up to the changes we need. That type of sound byte will not excite the base.
I must respectfully disagree with Tlaloc. Everything is a for profit business. Even non-profits and governments reap a type of profit that is paid to employees and grows the organization. It’s not quite like a corporation but each protects their interests and looks to ensure it’s viability over time. We could argue that corporate owners take hone too much profit but we could also say non-profit and government agencies are inefficient and waste that money.
The search for profits has resulted in the high standard of living we enjoy today. That standard of living allows us to provide a great deal of health care to those who cannot provide it to themselves. The search for profits drives innovation and investment. The search for profits is a great equalizer in our society.
Which is all fine and good, here the “gap” or people who can’t afford food and housing is relatively small. I don’t think you want the government writing vouchers for the hundreds of millions or Americans who can’t afford non-routine healthcare.
We appear to be focused on “rights” By what right does anyone force me to pay for someone else’s Healthcare?
“a relative handful of people aren’t served well by it?”
Boy are you out of touch.
Since when are multiple millions of american a handful?
And in a subtle way your analogy is actually spot on. we do give the poor vouchers, and the result is that the poor have terrible eating habits because cheap food is terribly unhealthy.
Some on the right like to sneer that the poor in america are obese. They think this is a great point against any welfare system because obviously even our poor are eating too much. But it has little to do with eating too much and a lot to do with eating poorly. Raman is dirt cheap and it’s also incredibly fattening. It has no nutritional value to speak of but it fills you up when you’re hungry.
So yes we do give vouchers to poor people for food and the net result is a piss poor system where they get served garbage.
I don’t want to emulate that on a much larger scale with health care.
I’m sorry. Didn’t we just pass 3 hundred million in American population. Are you saying that 2/3 or more of the American population can’t afford non-routine healthcare. Do you mean they can’t afford it without having insurance? Maybe you meant to switch the “of” and “or” in that sentence.
Of course every group looks to it’s own interests but when are a service provider and those interests are profit they are often served by slighting anyone and everyone they can.
in a field like medical care where you need a lot of schooling to be reasonably fluent in the field it’s pretty easy to slight most people.
A government program absolutely is going to try and take care of their needs. But what they need is public support so that politicians are eager to carry their water in budget discussions. How do they get public support? By providing their service well. It’s a positive feedback mechanism whereas profit is a decidedly negative one.
Of course it will require oversite, plenty of oversite with real power to correct issues.
Profit is evil. Got it. I don’t think there is much more to discuss then. But I do have a couple of questions. Do you really have that much faith in the good intentions of the government, or are you just that desirous of turning everyone who works in the healthcare industry into slaves to satisfy your good intentions? What happens when the inevitable shortages of highly skilled and educated people willing to work for below market wages makes it impossible to staff your good intentions?
Steve,
The ‘or’ was a typo, it should have been ‘of’. And yes, I am talking about affording healthcare directly, not affording health insurance. And without health insurance, non-routine healthcare is prohibitively expensive.
In my case, I can’t buy private health insurance for my son, so my choices are to work for an employer who offers group coverage, or take him to the emergency room for even minor things because they can’t refuse to treat him there. I’ll rack up huge bills from the ER, but I don’t have to pay them before I get treatment, and the ER will write much of it off as a loss. And guess who’s subsidizing the ER? That’s right, it you, and Bithead, and James, all because the freemarket left gaps and even with a relatively well paying job, I can’t bridge those gaps on my own.
I look through the yellow pages at “physicians” and find it hard to believe that there is a shortage of people in the medical profession.
No, what I have is a realistic appraisal of which is easier to maintain a level of oversight on- the government or a few thousand individual corporations. I also have an appreciation of which has an incentive to do at least a competent job (the government) and which has an incentive to always short the job (the corporations).
Let’s just say I don’t buy your appraisal of the situation. Nor do I think that paring the medical field of those people who went into it for the money is a bad thing per se.
Actually let me say further-
Why is it you say it is inevitable that there will be short staffing when this does not seem to be a problem in the rest of the first world, all of which use some form of socialized medicine. I guess the inevitable takes a while sometimes.
How does looking at the phone book now, when doctors can get market wages, tell you how many people are going to be doctors in the future when their wages are going to be capped by the government? How many really smart people are going to go through 4 years of professional school plus more years of residency to make the government wage?
JohnG,
I was more contesting the theory that there is a supply-side shortage that is somehow responsible for the current cost of medicine. I also doubt the theory that a national healthcare system would cause a supply-side shortage, since most physicians are in it for the practice not the wealth, and I’m sure the government will be giving grants to medical students who agree to work in the government’s hospitals for some period of time, like they do for public school teachers already.
James you need to pull your head out of the clouds. It’s not a “relative handful” of people who are not being served well by the present system. It’s a significant percentage of the total population of the richest society in the history of the world. It’s a fricking disgrace.
And I don’t know about anyone else, but I am not at all happy about the 100%+ increase in health care costs under Bush. Especially when I read about the kind of profits companies like Wellpoint make.
Perhaps when Bithead sees a bit more of life, he will realize just how quickly just about anyone, including Bithead, can lose their health, their savings, everything.
News flash Bit. God forbid, but you too could end up as someone who is helpless, has no assets, no ability to work, and is dependent on others to pay for their health care. If you don’t realize this, you really need to grow up.
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But that is exactly what happens if you get your insurance through your employer. Insurance does not calculate individual risk, it calculates the risk for a pool of individuals.
It depends on the plan, no? Surely, an insurer for a small company is going to up the rates substantially if the company hires on someone with, say, HIV or on the kidney transplant list?
Which, of course, drives the sick out of the insurance market and makes them entirely dependent upon emergency rooms for care, driving up costs for everyone.
Either we pool risk intelligently (probably requiring national scales) or we eliminate the requirement that emergency rooms care for all. Let them die in the street, and we can be economically efficient with privatized insurance.
Funny I didn’t see James’ mention profits. And if you are not going to run the business for profits you’d still have to calculate risks unless you are a complete and utter idiot.
That being said though, with a pooling outcome you’d expect to see exactly the same price for everyone. The problem is that the healthy subsidize the sick. Furhter, you might also have the suburban and rural subsidizing the urban, or the poor subsidizing the non-poor, etc. The rate at which different groups within the population access and consume health care and health care resources is different and hence you could have cross subsidies in all sorts of different directions.
This is why when you have community rating there is alot of discussion of what comprises a community. Define the “community” poorly and you have one group subsidizing another group based not on health, but on where they live, or some other demographic variable.
That people like Tano and Tlaloc don’t seem to be aware of this underscores a massive deficiency in their understanding of the issue.
As it should be with regards to insurance…of any kind. Insurance only works when the bad state is unlikely to occur. If you can predict who is likely to have a probelm then you can’t insure them. It is like asking an auto insurance company to insure somebody who is legally blind. You know they will get into an acccident.
The issue of whether or not this is a market failure is interesting, but how far down this road are we willing to go? How about genetic tests on babies and those that fail are terminated whether the parents agree or not? Seriously, the parents unrestricted breeding is causing an external cost on the rest of society, so shouldn’t society be allowed to intervene in this kind of activity? Or maybe there will be more development in genetic engineering to eliminate predispostion towards various health risks. Is that a good idea? And should it be mandated nation wide so as to reduce the external costs of producing babies that are physically deficient?
Translation: We don’t know what we are talking about.
If you look at government run systems they are all in trouble as well. Britain, Canada, France, Germany, etc. all have large and growing deficits associated with their government run health care systems. They are doing things like implementing waiting lists, allowing illegal private clinics to open, or simply denying certain types of care, etc. In places like England you have growing budgets and deficits but a declining number of beds and other measures of output.
Now to be fair, there is indeed a problem with health care, but the idea that we can make it something like a right is just stupid. We live in a world of finite resources and making things rights that shouldn’t be is a recipe for over-consumption and/or under-provision. How many people who can afford legal counsel in a criminal proceeding go with the public defender? Why? Because public defenders are over-worked and and the quality isn’t very good.
As for the solution I don’t pretend to have any silver bullet, but I’m not convinced that the answer is to turn blindly or even with our eyes open towards government. Medicare in this country is seriously underfunded, yet we are supposd to expand this system to include everyone who is currently not insured? I’m sorry, but that is just insane. I’ve long thought that having a mandate for health insurance was the idea, but not I’m less ure.
The preferred pool, or community if you like, of most who support universal health care is the nation.
Of course any time you pool risk some will subsidize others, that is the nature of pooling risk. That someone does not think it necessary to make a listing of who is subsidizing whom is not indicative of ignorance on their part. It is at least as likely that they take it to be understood in the context of the discussion.
So what is your answer for health care for people who require expensive treatment or are likely to require expensive medical treatment once you accept that private insurance companies will not or cannot insure them?
Yet every single one of them runs substantially more cheaply than ours. If they met us even halfway in per capita health care expenditures their financial troubles would be gone and some would have a surplus.
The British have what is probably the most troubled of the universal systems, but I don’t see anyone seriously advancing their model for the US.
…life, liberty, and the pursuit of happiness…