Jonathan Gruber has just written a very useful and comprehensive paper on health insurance (I don’t yet see ungated versions). He estimates that without a universal mandate, but using subsidies, a typical plan for covering the uninsured would cost $4500-$5000 a year per person, and that is cost in the narrow budgetary sense. With a mandate the fiscal cost of the government (again, not social cost, which includes the cost of paternalistically forcing people to buy health insurance) is estimated at $2732 per person per year. Of course it is cheaper to tell people what to do, comparing to paying them to do it. That cost estimate is assuming that the mandate is effectively enforced, which I do not expect.
I would have preferred the primary estimates to be in terms of social cost. And I would have liked a discussion of how mandates and minimum benefit requirements distort the price of health insurance and limit competition. Read Shikha Dalmia. Nonetheless this remains is one of the best papers on health care economics to be had.
Gruber also poses an interesting philosophical question for the paternalists: would you rather be uninsured in today’s America or obese? And if you, like I, answer "uninsured," why not first direct paternalistic interventions toward obesity? And I’m not talking about subsidies to olive oil, I mean real mandates. After all, they will lower health care costs, no?
Maybe because the obesity mandates won’t work?:
http://www.nytimes.com/2007/05/06/books/review/Bazelon.t.html?_r=1&oref=slogin
“Most people who are overweight struggle to change their shape throughout their lives, but remain stuck within a relatively narrow weight range set by their genes. For those determined to foil biology, strict dieting is a life sentence.”
> And I’m not talking about subsidies to olive oil, I mean real mandates. After all, they will lower health care costs, no?
Pure FUD. In Canada, where we have had fully socialized health insurance for more than a generation, no such mandates exist.
Oh, and I love the double-speak here:
> paternalistically forcing people to buy health insurance
That isn’t how socialized health care insurance works at all. A better representation would be: you are automatically insured (no forms, no payments).
Of course, I don’t expect these comments to penetrate your bias against public health care. This is something that would be worth exploring. Instead of simply passing along talking points, I’d like to hear what it is about public health care that scares you so much.
I suspect that mandates toward the uninsured have little to do with paternalism.
Instead, people who would not buy health insurance are most likely to be very healthy, and most likely do not need it. If only the sick are in the insurance system, then insurance premiums are going to be higher, as the sick will have to pay for more of their own health care costs.
So mandates are more about income redistribution on the basis of health then paternalism.
I’d rather be obese. From what I have read, obesity only slightly reduces life expetancy.
Why not cover everyone de jure and instead issue credits to those who *don’t* use it.
I like the idea of being covered for every scenario, but the truth is I go to the doctor less than annually. I’d like to be credited if I’m not utilizing health services, but not charged if I do.
“What would it cost to cover the uninsured?”
The answer ought to be readily availabe to us right now. After all, we do cover the uninsured. Why does everyone speak as if we don’t?
Get sick/have an accident and go to an ER. Leave your insurance card at home (if you have one). You’ll be treated if you need to be treated (yes some triage will be done, of course), regardless of insurance status. It’s the law. So: we have universal health care and we cover the uninsured. The rest is details.
So surely it could be figured out how much it costs us to be doing this.
We do not leave uninsured people to die in the street like road kill, so people who do not buy insurance are still insured at the public expense for catastrophic accidents or illness. People who claim not to need insurance, unless they have a lot of assets, are free riders on the system.
“Wow, the government creates something from nothing for you! It doesn’t cost anything!”
Wow, neither does anything else. Like roads, national defense, education, and so on.
I have an idea: let’s privatize everything!
Problem is: most Americans don’t want to live in a world like that. It’s inefficient (for one thing) – something libertarians don’t really “get.”
Public insurance is a massive, massive subsidy from young to old, and from those who preventively take care of their health to those who do not. *Catastrophic* health care is often cheap – as a 24 year-old in Virginia, I can get a decent plan for 60 bucks a month – and I would be fine with the government mandating or providing this type of insurance (indeed, it seems much more sensible that providing it at the workplace level). Further, general public health measures (vaccination, sanitation, nutrition labeling, etc.) are also sensible to aggregate at the government level.
In between, though, I just don’t see why this shouldn’t be the responsibility of the individual. If you’ve already got catastrophic, the most you’re on the hook for in a disastrous year is $3-5000. It’s just inconceivable that any working person in the richest country in world history can’t have saved this amount.
I don’t know how health care can be discussed so often without noting how much of it is voluntary, or marginal in terms of benefit or decrease in pain. When I was with insurance, I was very careful about what tests I asked for. I didn’t see a doctor when I had cold or a minor sprained ankle. I took better care of my health in general. Demand curves slope downwards.
Everyone should be able to get three things regardless of their station, food, shelter and medical care. Short of this we are killing ourselves by allowing diseases to spread and mutate into incurable strains. These diseases in turn will not care if you are covered by insurance or not, they will kill you just the same (ie. the “Black Plague”, annual flues and other Pandemics). My view is that the economics must include in any decision self preservation and humanitarianism. Is this a perfect solution, no, but it is better than anything I have heard from other sources.
Unless of coarse you subscribe to the view that the planet needs a good pandemic every so often to clear out the lower classes and those unworthy along with “innocent” by standers.
How much does it cost to cover the uninsurable? It seems specious to simply assume it is the same as covering the insured.
No paper on health insurance will be either useful or comprehensive if it does not:
1. Make a distinction between the people that are chronically without insurance and those that merely had a period in their lives in which they were uninsured (say, between jobs). The ever-popular 40+ million number doesn’t do this.
2. Point out that it is the nearly ubiquitous and permissive nature of most insurance coverage that has sent demand for services through the roof and, thus, a corresponding increase in price, and why the universal coverage plan du jour somehow doesn’t exacerbate this.
3. Note that the oppressive paperwork and controls put in place on the health care industry by the government to extend coverage to much of the population further exacerbates expense, and any government-sponsored effort to eliminate the last fraction of society that doesn’t have health care will cause still greater cost.
4. Figure out how to put an upper limit on the litigation-induced additional expenses on the industry.
5. Address the fact that health care providers are always considered natural resources in studies such as this, despite being actual people who might be a little ticked off at spending many years being trained for something few people can do only to be treated as servants to government whim. The current brain drain from western countries with more socialized programs to the US might be a good place to start.
6. Determine how much the legitimately productive members of society are going to react to even greater taxes (direct or indirect, by whatever euphemism is used.) “The last straw” is proverbial for a reason.
“why not first direct paternalistic interventions toward obesity?”
Why not paternalistic interventions toward cancer? Cancer involves genetic and lifestyle choices too…
This ridiculous analogy exposes your argument as ideological rather than logical.
Tyler, the answer to your closing question is easy. This is by no means the only problem of tackling obesity, but suffice to say that the lobbies (like restauranteurs, farmers, and the auto industry) who would be opposed to serious efforts to curb obesity are far more sympathetic than those who oppose universal healthcare (overwhelmingly the insurance industry). Politics is, after all, the art of the possible.
To take but one example, there is a large contingent of senators and rural representatives standing in the way of doing something to improve the cost structure of food. I’m sure you’ve seen the subsidy pyramid / food pyramid comparison by now; our farm subsidies are overwhelmingly directed toward unhealthy rather than healthy foods, distorting downward the true cost of eating red meat, carbohydrates, and fat on a daily basis. A fairer distribution would make it more economical to switch to a healthier diet and would help fight obesity.
Similarly, placing greater emphasis on public transit, which inherently involves more walking than automobiles do, would help. Making children’s food that is healthy also taste good (I remember school lunches) would help. Etc. The paternalist, as you call it, in me would love to do these things, but the concerted efforts to stop them are stronger than the concerted efforts to make them happen at the moment, and that’s true within the Democratic Party itself. This is not the case on health care, where most opposition comes from elsewhere.
Tyler,
STOP referencing papers that we can’t read.
,dave
This blog and its comments are extremely interesting. However, I would like to comment with a different but related angle. The paper, blog, and associated comments refer to the cost of insuring the uninsured. However, the topic of obesity is also briefly mentioned. I found this article which describes the cost of obesity in the state of Minnesota. Imagine multiplying the 3.6 billion by 2020 (in Minnesota alone) by 50 states (give or take a few billion). One thing is for sure, obesity translates into dollars†¦ fast.
Consider the amount of money that will be spent on the food associated with becoming obese (i.e. fast food); then amount of money that will be spent on the food associated with trying to lose weight (i.e. Slimfast, Weight Watchers); then there is the gym memberships, personal trainers, athletic apparel, and sports drinks associated with trying to exercise properly; and finally the dollars associated with the medical procedures and prescription drugs designed for weight-loss or the appearance of weight-loss. All this leads to one question: What impact (negative or positive) does obesity have on the US economy? And are we trying to change it? And if so, what are our true motivators?
You’re running a bit behind the curve. So to speak
Mississippi seems to have figured out how to deal with obesity.
See the proposed bill at:
http://billstatus.ls.state.ms.us/2008/pdf/history/HB/HB0282.xml
Title: AN ACT TO PROHIBIT CERTAIN FOOD ESTABLISHMENTS FROM SERVING FOOD TO ANY PERSON WHO IS OBESE, BASED ON CRITERIA PRESCRIBED BY THE STATE DEPARTMENT OF HEALTH; TO DIRECT THE DEPARTMENT TO PREPARE WRITTEN MATERIALS THAT DESCRIBE AND EXPLAIN THE CRITERIA FOR DETERMINING WHETHER A PERSON IS OBESE AND TO PROVIDE THOSE MATERIALS TO THE FOOD ESTABLISHMENTS; TO DIRECT THE DEPARTMENT TO MONITOR THE FOOD ESTABLISHMENTS FOR COMPLIANCE WITH THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.
In the above comment the source is “The New England Journal of Medicine”. All other information is in the comment.
It has been the experience of Massachusetts, that requiring health insurance purchases by everyone, results in higher prices – not lower prices.
See, for example, this article in the WSJ last Thursday.
http://online.wsj.com/article/SB120173996744030445.html?mod=opinion_main_commentaries
So much for obesity leading to increased costs. This shoots your idea down –
http://news.yahoo.com/s/ap/20080205/ap_on_he_me/obesity_cost;_ylt=Au_LH9teY5MoDYGCx6bOlnKKOrgF
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Very nice article! Thanks for this!
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