Andrew Samwick writes:
So all the government needs to do is establish a premium schedule for
Medicaid and require proof of insurance on the tax form to be exempt
from paying that premium. The premiums should rise with income to the
point where any middle class working family with employer-provided
coverage would likely prefer the employer coverage. The premium levels
should be high enough so that the taxpayer isn’t paying through the
nose for someone else’s premiums. That’s universal coverage in two
straightforward steps, without a lot of disruption to the way health
insurance is currently provided or an enormous infusion of government
funds.
Here is more. He is likely right that this is the easiest path toward near-universal coverage. But I am not sure I understand the actual goal of the plan. Many people who do not currently have coverage are taxed so that they will obtain coverage. In other words, in terms of a consumer sovereignty standard, these currently uninsured are brought to a less preferred position and thus made worse off. This is a major tension in many health care plans, namely how much the goal is coverage per se and how much the goal is to make people better off by their own standards. It is harder to make people better off than it is to get them covered, yet the latter is easier to claim as a political victory.
I should add that this plan, without amendment, would encourage rather than discourage health care cost inflation.
“So” under this plan “all the government needs to do” to put you in jail is for you not to have health insurance and not pay the tax imposed.
Brilliant. (And libertarians think the drug war is stupid?)
Hey, remember the good old days when you believed that compulsion by the state is violence?
I guess that the idea is that the uninsured fall into two categories:
1) People for whom the Medicare/Medicaid rates would be a bargain, presumably because of pre-existing conditions, and
2) People from whom the Medicare/Medicaid rates would not be a bargain, who are disproportionately young, single, and healthy. Presumably the idea is that these people need to made worse off in order to improve the insurance pool for everyone else, and that forcing them to purchase will lower rates. You would have to believe that moral hazard causing healthy people to avoid insurance is a big factor.
I should add that this plan, without amendment, would encourage rather than discourage health care cost inflation.
Yes, well, we just had an election. If there’s anything I learned from all the Obama advertisements on McCain’s health care plan, it’s that people absolutely reject a lan designed to discourage cost inflation. It’s way too easy a political target.
This plan just misses the boat in so many ways. Employer provided health care is killing our manufacturing, notably Detroit. It must be replaced with single- payer if only for competitiveness. The Germans do this well & we should just copy them.
My university recently did the same thing to me. Needless to say, I don’t feel better off on my terms.
Also, needless to say, my insurance plan had to cover all manner of things I find despicable in order to qualify for exemption from the coerced default. Also, my insurance plan, despite being perfect for me and my family, being a minimal coverage , low cost, high-deductible, catastrophic-type plan that I consider is part of the “healthcare problem” solution, doesn’t seem to qualify, but luckily the administration doesn’t do a rigorous job checking this. The government, with more yakking liberals will most certainly make sure that all approved insurance policies cover every imaginable political condition.
Paying for the service of Medicaid may even be a good development (as long as the fee isn’t subsidized (haha), driving out private competition). However, I’m not an optimist. Also, the politicization of disease and remedy is an evil in itself. We also need to get away from the fact that big dumb goals only achievable by the biggest dumb brute are political victories. In general, the government can do things others can’t or won’t do. I realize this. It doesn’t impress me.
One of the primary problems with healthcare is its demand curve. I don’t see how forcing people to have coverage (of any type) ultimately addresses this goal.
Let’s face it, if the choice is between death (or my perceived death) and a medical bill that goes against my credit, I’m going to pick the medical bill everytime. This essentially gives catastrophic medical care an inelastic demand curve. On a supply and demand graph, that’s a vertical line.
Do you know what else has a vertical demand curve? Heroine. Addicts will do anything for this, pay any price. The “market” for heroine is subject to huge inflationary pressures. Do you think we have a healthcare crisis now? Wait until we allow the demand curve to go entirely vertical!
This is why we have laws which require someone to be stablized if they are at the ER. It doesn’t matter if they can pay, and we don’t spend time negotiating a price with a dying person. We treat them and defer the cost through other’s medical bills.
Now, this may imply that we should force healthcare coverage on everyone so no one has to pay extra, but think again. Insurance actually works by “spreading around” the risk. Everyone will pay for those emergency room visits either way, be it through taxes, through insurance or through medical bills.
Universal healthcare doesn’t change the economic facts. Forcing the treatment of those with catastrophic needs does. It encourages efficiency, since the hospital cannot tell whether the patient will pay beforehand, while having insurance basically gives them a blank check to do whatever they think they can get away with.
Think that last statement isn’t true? I know I’ve been hospitalized when I didn’t need to be. My brother was going through a rough time in his life, and his therapist thought he should be institutionalize. That is, until we told him we didn’t have any insurance, then it was a different story completely.
Universal healthcare through universal coverage will only make things worse. If catastrophic medical care is a public good, then demand that every hospital also operate an ER. If they refuse, we revoke their license. If they can’t make ends meet, they should shut down.
One of the problems with hospitals is that there are too many small ones and not enough big ones. Medicine is subject to huge fixed costs that need a huge customer base to defer properly. Dealing with catastrophic medical care by simply legislating it will encourage better utilization of economies of scale.
You want to fix healthcare, treat it like pollution. Pass a law that moves exhorbitant externalities (i.e., catastrophic medical care) into the internal costs of the firm (the hospital). Don’t put the onus on the victim – put it on the people who can actually do something about it.
Yes medical care is fundamentally different than other goods…we don’t really need food or clothing or housing….people are willing to not have those things if prices go too high, so it is ok to allow the free market in those goods. However medical care is special…and this causes market failure and that is why we need to have strict licensing laws that limit the supply of medical care givers.
“In other words, in terms of a consumer sovereignty standard, these currently uninsured are brought to a less preferred position and thus made worse off”
Of course, with a tax credit for those with low income levels, this is of no impact for the vast majority of people currently without health insurance. I am going to assume that these people would prefer health insurance but cannot afford it.
“Of course, with a tax credit for those with low income levels, this is of no impact for the vast majority of people currently without health insurance. I am going to assume that these people would prefer health insurance but cannot afford it.”
Of course people “prefer” to have more money to buy things. However, the point being made (without a tax credit reference) is that if you force someone to buy insurance who does not already, you force them to change his or her consumption bundle from what they have decided to be optimal. If they really wanted insurance compared to what they already have compared to their budget constraint they would rearrange what they purchase to obtain it. Forcing someone to buy then forces them to do something they don’t want (otherwise they would already be doing it) and makes them worse off. If you muck around with the budget constraint (through a tax credit or whatever), then of course they may be better off with in insurance, but then again it still might not be optimal.
As opposed to Obama’s actual proposal, which would tax the companies of those people and presumably make them actually worse off rather than having no effect.
Some of the people without health insurance (even without much income) don’t want it because they’re young and healthy, and they would be forced to risk pool with sicker people. Some of them live in states like NY and NJ with mandatory community rating services that simply perversely encourages people to not buy insurance until after they get a condition.
The president-elect apparently believes (or his team does) that adverse selection is the biggest addressable problem with health care in this country. The losing candidate’s team believed that it was insulation from costs and the distortion of getting health care through an employer.
Contrary to a statement made above, Germany does NOT have a single-payer system and a person who earns above a certain amount can opt out altogether and be “freiwillig (un-)versichert.”
How do you universal healthcare mandate fans propose to provide healthcare to expatriate or even vacationing Amerikans, like those millions of expatriate retirees in Costa Rica, Guadalajara, Italy and Brazil who can’t now participate in Medicare A, B or D though they’ve paid lifelong into that socialist program?
So the current model where the sick (and not so sick) uninsured use emergency rooms as their ‘health insurance’ is less costly exactly how?
I would like to attack the meme expressed in the post of “StreetWalker at Nov 6, 2008 8:43:06 AM” that a single payer system will make american industry more competitive, at least in the high-end jobs we presumably would like to retain.
Let’s start with the auto industry, which is canonically the poster child for this meme, as in “spending more on health care than on steel” or some such. My logic applies to any industry where the employees are better paid than average.
How much do auto workers get paid? The amount boils down to “they get paid an amount below which the workers would rather strike and above which the employers would rather accept a strike”. This depends on how much money the car companies have coming in, and also on how the auto workers perceive their living standard. If auto workers are so well paid that they’re very comfortable, they will not call for a strike even if they think they could squeeze out more. In years that the auto industry is doing well so they’re willing to offer enough to sate the workers, the range is ample and there is no strike. In tough years the range can be negative and there is a strike.
Now consider the passage of a single payer plan that saves the company, say, $5K per employee-year. Where does the money come from? It would come from a tax increase. No serious person can reasonably believe otherwise. And how much would that tax be, for the auto workers? Since these are the “good jobs” that we presumably want to preserve with the meme that we need single payer to avoid making our manufacturing non-competitive, we have to assume that these incomes are above average, and since we have a progressive tax system the taxes would be considerably above average.
An employee would get a nominal raise, perhaps, but they would find hirself unable to buy as much — fewer and less exotic vacations, less consumer electronics, fewer nights out etc., even less college tuition for the kids. The amount by which the employee would be more likely to vote for a strike exceeds the extra amount that the company would be willing to shovel onto the table to avoid a strike. A compromise will be reached. Labor costs will go up, even counting the pre-single-payer health bills, and living standards of auto workers and others who are well paid decrease.
-dk
This plan will create another variant of the mortgage disaster.
‘Do you know what else has a vertical demand curve? Heroine. Addicts will do anything for this, pay any price. The “market” for heroine is subject to huge inflationary pressures.’
The aggregate demand curve for heroin has been shown to be a sigmoid, but for rhetorical purposes I suppose we can let you describe the steep part of that curve as ‘vertical’.
As for ‘huge inflationary pressures’, you seem quite confused. Inelastic demand leads to price volatility depending on the supply (see: oil). Historically, heroin prices have not gone up up up, as suppliers seem to be pretty good at providing heroin.
If you want to straighten out your thinking, maybe start by considering why food is by and large cheap despite that fact that we can’t live without it.
What happens to your premiums once you get very sick, or old? Both are most likely going to happen at some point.
No problem if you can afford $10K-$15K per month premiums.
Is it too expensive to pay $200K/year for a good health care? Every free market pundit will gladly do it, it just happens that they usually have taxpayer paid sinecures with fat health insurance benefits.
It is enlightening!
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