Brad DeLong attempts a Theory of Mind task:
Tyler Cowan [Cowen] would probably say: tough. If you were born with a tendency toward high cholesterol you ought to have known that by age 20 and been busily saving all your life in order to pay the extra expected costs of treating your heart diseases. But I don’t think the rest of us are willing to say that a bad dice roll in the genetic lottery plus an absence of foresight should doom you to an early, untreated death.
Since I believe none of that, I will offer no grade. Nor do I believe in privatizing Medicare, as another part of Brad’s post (“In Tyler Cowen’s world, those who want to buy Medicare almost surely cannot. The market to sell and buy medical risk is unlikely to exist.”) seems to suggest and it was only last week that I distinguished my view from this, endorsing the Yglesias-Krugman argument that privatized vouchers bring higher costs.
I do believe in a core set of Medicare services, topped off with the ability to choose how much of your extra benefit comes in the form of either Medicare or Social Security benefits (cash). It is nonetheless an interesting question whether that system would encounter adverse selection as a major financial problem. A few points:
1. When it comes to the elderly, adverse selection as a problem is overstated. The real problem is usually a high degree of information about many conditions, so often insurance is difficult per se. It’s not the asymmetry of information that is the core issue, it is the existence of lots of information, and that is one of Arrow’s subtler points. That distinction matters a good deal for mechanism design.
2. An old person might know better his health care condition, but not know better his expected health care costs. That is a critical distinction. You can’t reach age 60 and credibly say: “I’ve been healthy so far, I guess my lifetime health care costs will be low.” It’s not even clear whether the healthy or the unhealthy will have lower health care costs in their later years; the unhealthy might die rather quickly and decisively. Adverse selection on the grounds of health care costs need not be high and arguably actuaries can estimate those as well as the individual himself.
3. Perhaps most importantly, adverse selection in this context doesn’t have to be a problem; if low cost people take some cash it could be that the system is working well (if only on grounds of equity), not badly, and remember this is all tax-financed.
4. You can imagine patients visiting a combined doctor/financial analyst service at age sixty and asking for the best information and whether they should take the cash or the fuller Medicare package, possibly leading to adverse selection in terms of program finances. But a lot of people don’t listen to their retirement planners either.
5. When choosing a future benefits package, if impatience for cash (one cognitive bias) outweighs overestimation of the value of medical care (another cognitive bias), my preferred system will work not so well. If the net bias is runs the other way, the system will capture some but not all available gains from trade.
6. The general approach of “give everyone some basic benefits for free, and then allow everyone to top off at some opportunity cost” applies to food (food stamps), education (free K-12), housing, and now, with ACA, to health coverage for the non-elderly, among other areas. And yet many people think the approach is morally outrageous. The correct way to proceed is not to lash out, but to start by admitting in which spheres the approach makes sense, and then seeing how far outwards those arguments can radiate.
You do not have to hypothesize on any of this.
You can be an economic historian and ask: how did the insurance markets work for the elderly before medicare.
When you say: ‘When it comes to the elderly, adverse selection as a problem is overstated, ‘ you should be able to go back to 1965 data to prove it.
How did the insurance markets work for the elderly before 1965. Any guess.
“How did the insurance markets work for the elderly before 1965″
Actuarially.
Well said.
Well, if you mean by “actuarilly”, adverse selection and exclusion of persons with risk, you are correct and prove my point. Thank you, Andrew.
Not really because what you are talking about is not really insurance. You’ve started calling a transfer insurance so then you could try to claim that all insurance isn’t enough of a transfer.
Not true, Andrew. Go to oyc.yale.edu and listen to Shiller’s lectures. I can’t summarize it here, other than to start with the law of large numbers, choices made before the die is cast, adverse selection, different types of equilibria, yada yada yada. This is not a transfer issue at all. It is actually a cost minimization issue if you understood it.
Its an interesting thing, the intersection of government and healthcare. There had been a greowing tendency to provide “industrial medicine” for decades. During WW2 the feds enacted wage and price controls and so employers competed for scarce labor with “fringe benefits”. After the war, they attempted to impute income taxes to the cost of employer paid health plans. In 1954, the recodification of the Internal Revenue Code allowed for unlimited tax free treatment of employer paid health plans (IRC Sec 106) and we were off to the races cost wise. The enactment of medicare and medicaid made third-party payment mechanisms so complete that medical services had no marginal cost to consumers at the point of consumption.
And no the government wants to give us.. more of the same. But hey, we’ll have “experts” telling us what’s good for, er I mean the most effect, er I mean least expensive,
Or take another country. India is a great example. Insurance has kicked in only a decade ago and is right now entirely private. No Medicare. Social medical net is practically non-existent. If you are above 55 it is almost impossible to buy an insurance policy.
It wouldn’t be quite so easy because of differing life expectancies, medical technology and cost between now and 1965. But it would be a start.
I wonder what percent of the cost comes under the “basic benefits” category. It seems like the really expensive things – cancer, dementia, heart disease – are also the things for which it would be impossible to deny treatment.
Do you think people would accept age-limited benefits, like no bypass operations over the age of 80?
It’s quite considerate of DeLong to tell you what you think, though, rather than make you go through the trouble of actually thinking. Of course, he’s so much smarter than you are that it’s only decent for him to do so. Noblesse oblige.
Shorter Tyler Cowen:
“Down, boy! Sit!”
And in fact that is the correct response.
“But I don’t think the rest of us are willing to say that a bad dice roll in the genetic lottery plus an absence of foresight should doom you to an early, untreated death.”
I for one am willing to say that that sentence is a straw man that has nothing to do with Medicare.
I think that the statement is hyperbole but It is to a certain sense valid if absurd. Health care to a certain point will always be covered, what that point is is needed to determine whether Tyler’s ideas are worthwhile.
I for one am willing to say that that sentence is a *fact of human mortality* that has nothing to do with *health care*
FTFY (true at least until the singularity, or rapture, whichever you prefer).
“I for one am willing to say that that sentence is a *fact of human mortality* that has nothing to do with *health care*”
And you would be right. Healthcare is concerned with morbidity, not mortality.
“Since I believe none of that, I will offer no grade. Nor do I believe in privatizing Medicare, as another part of Brad’s post… seems to suggest”
Since Brad DeLong’s blog is “reality-based,” you must indeed think those things without realizing it yet. Instead of denying the thoughts, you should thank DeLong for bringing them to your attention before you had a chance to realize it.
Regarding #6, you’ve lumped together examples that have quite different eligibility standards, and definitions of “free”. K-12 is open to all for the same price — poor, middle-class or wealthy. For food stamps, you have to be poor and the cut off is quite abrupt — make more than $X, and you’re not eligible. The ACA is a mash-up of odds and ends. Consider the situation of a 25-year-old looking for health insurance: you may be eligible under your own employer’s plan; you may be eligible under your parents’ employer-provided plan (or not, if they have retired and are covered under a separate employer-provided retiree plan); you may be eligible for Medicaid; you may be eligible (eventually) to purchase coverage in a state-run exchange; and there’s a sliding scale of premium assistance.
Worth adding that under the ACA, you get insurance. That doesn’t necessarily translate into care. There are many rural areas where it is almost impossible to find a doctor who will accept new Medicaid patients.
Could you be more specific about the many rural areas where it is almost impossible to accept new Medicare patients.
One of the reasons we have medicare in the first place is that pre-1965 private insurance companies would not insure seniors. Are you sure that that would not happen again under the proposed voucher system? In which case under ACA it would be the insurance policy that no one could afford. That is like the free market price where no transactions take place.
I think M Cain said Medicaid, not medicare.
Be that as it may, so what.
Do you want a system where EVERY doctor would accept a payment offered to him/her? Blue Cross/Blue Shield plans don’t offer payment plans targeted to get 100% participation. They target off of the 70th or 80th percentile.
Look, I’m a lawyer. Do you think that everyone would pay my rate, or that you would expect everyone to do so, despite my high quality? Are public defender rates as high as private practice rates? (Answer: No, and they probably rank at the 30th percentile).
Just because you ask does not mean you receive.
absolutely ridiculous. before Medicare came to be in 1965, about 55-60% of the over 65 crowd had private health insurance. im tired of this history revisionism. just because a good chunk of the elderly did not participate in the private insurance market, does not mean it didnt exist. Medicare destroyed it, but it could just as easily be resurrected with the dismantling of Medicare. it seems people really dont want to go back to individual health insurance. God forbid people have to pay for their life choices, rather than having morbidly obese Americans riding around on power scooters paid for by good ol’ Uncle Sam.
So, you were happy paying for the healthcare of the 45 to 40 percent who didn’t buy or get health insurance. My, you are generous. With Medicare, everyone, including the working poor pays.
Does anyone else find it inappropriate of Tyler not to hold the opinions that DeLong says he holds? I mean the cheekiness of it. Tyler should stop having his own opinions right now and start consulting DeLong about what he believes.
I think most of the critics believe that number 5 is the biggest problem with your argument and makes it unworkable. I believe 5, even if limited in the population, is severe enough to throw the entire system out of whack. I do though favor the proposal that most non-healthcare benefits be given in cash subsidies (negative income tax preferably).
Exactly. You could simplfy 5 to:
5) If people behave as people have always behaved, my preferred system will work not so well.
It is fortunate that Tyler has his own blog, so that DeLong can’t simply delete his response.
Can anyone tell me if DeLong has registered a similar concern with the “nationality lottery”? It is morally arbitrary what society you are born into. Why should place of birth be allowed to influence health outcomes? How about a policy of transferring wealth from all countries with median ages above the world median to those countries with median ages below until equality is reached? Or are the “rest of us” not interested in that?
The petty sniping of the people who don’t like Brad DeLong is cute, but I still wish Tyler would take E. Barandarian’s suggestion and actually spend the time to tell us what his ideal health insurance/health care delivery system would look like. I enjoy these medium length bullet point posts but at some point it would be nice to move beyond these “You said that I said that you said…” quotefests to something a little more substantive.
Plus it would probably raise the quality of comments, even if only marginally.
It’s not petty when he deserves it. He completely mis-characterized what Tyler has written. And he does this consistently, over-and-over, with people who hold both converging and diverging viewpoints. He is a middle-aged child.
As opposed to the petty sniping by Brad DeLong?
Have you actually read any of Cowen’s recent health care commentary, where he accuses people who disagree with him of being irrational? Health care is a subject that brings out a lot of strong emotions in people and that’s normal – what DeLong is doing is forcing Cowen to actually detail what he believes the health insurance should look like, instead of a bunch of vaguely libertarian bullet points. Don’t mistake lines like “What would terrify the left, of course, is the likelihood that genuine privatized cash would actually win that competition.” for actual substantive debate because it isn’t.
Obviously I’m not going to pretend like DeLong is as civil as I’d like him to be, but this is the internet, after all.
“,,,actually spend the time to tell us what his ideal health insurance/health care delivery system”
Has nobody stopped to consider Hayek’s quote about the “curious task of economics”?
That Hayek quote is about the importance of skepticism towards big, complicated schemes – not nihilism.
@Peter: ” It seems like the really expensive things – cancer, dementia, heart disease – are also the things for which it would be impossible to deny treatment.”
Not impossible, but very hard. Until we are willing to make hard choices, we will continue to overspend on health care for the very old / very infirm.
In the context of healthcare how does one decide what is “overspend”?
People get denied treatment every day. There are no cures for most things.
In the UK, the National Health Service simply refuses to pay for any procedure that costs more than 20,000-30,000 pounds per QALY (quality adjusted life-year) gained.
Would they pay for the same procedure done abroad if it is cheaper?
In the UK, the National Health Service simply refuses to pay for any procedure that costs more than 20,000-30,000 pounds per QALY (quality adjusted life-year) gained.
Accountants practicing medicine. Awesome!
Every health system has to face funding realities in some way. In the UK we do it by only buying the most effective treatments. In the US you do it by not treating some people.
Which one sounds preferable?
A combined medical and financial analysis service would be a useful thing to have. Some years back I had to decide whether to annuitize my 403(b) stash and, if so, how to choose from a menu of annuities. My doctors were worthless: they all assured me that I was highly likely to live longer than any of the men in my family ever had. I suppose they had once been taught that one should try to make patients optimistic. In the end I mostly guessed.
My doctors were worthless: they all assured me that I was highly likely to live longer than any of the men in my family ever had.
Why would you disbelieve that? The mere fact that you were living later than them, with access to medical treatment that didn’t exist in their time, makes this pretty likely. (Well, I suppose it depends on precisely what they died of, but for a lot of possibilities.)
“You can imagine patients visiting a combined doctor/financial analyst service at age sixty …”
(commenter) “A combined medical and financial analysis service would be a useful thing to have. …”
Why YES … for the 5% elites who can afford such services, great. Just like the few that can competently wade thru the privatized medicare options currently.
As for the rest … sadly, the dominant public opinion seems to be screw em.
Seriously Tyler, Thank You for “endorsing the Yglesias-Krugman argument that privatized vouchers bring higher costs” and “I do believe in a core set of Medicare services”.
At this point such sanity is refreshing and rare.
So far I have not heard any of the economics of social insurance expressed in this post, and that really is quite surprising, and, frankly, disappointing.
If you want to see and hear an exposition of the economics of this, including infinitesimal small variance across large population with social insurance, the elimination of adverse selection (and MUCH more, as adverse selection is only part of the issue), you might want to listen to Robert Shiller’s Yale lectures on the economics of finance and insurance at oyc.yale.edu. Look for the lectures on insurance where he discusses regular insurance v. social insurance.
You might also want to ask how behavioural economics plays in Tyler’s proposal as well. He is certainly ignoring human economic behaviour. Does he assume that people are rational economic actors, and what happens when they are not? How much information does he presume a person has in making a decision? As we move to genetic testing, and not just family history, will some who otherwise thought they were good risks be excluded from the pool? Will you pick your spouse differently now or in the future based on the health model you establish and do you want to live in that world.
Social insurance has to have a limit. So, I would argue that Tyler’s discussion is talking about social insurance economics. I would argue strongly that it is people like DeLong that are misapplying such economics, and in seriously misguided, or, in DeLong’s case, a dishonest manner.
Without calling anyone dishonest or not, of course all insurance has a limit. Even private insurance policies have policy limits. But, we’re not talking about limits here, or even death panels, or even cost controls. We’re talking about the concept of private insurance markets for people over, say, 65.
Now, if Tyler were talking about death panels, limits on coverage for 95 year old hip replacements, etc. there wouldn’t be this diagreement.
Don’t confuse the issues.
Cowen is trying to develop a system of limits (or at least starting a conversation about them) that might actually be politically palatable to a large enough cohort of the electorate- and possibly a more just one, too. Whether his suggestions will work or not may require actual experimentation, but many (and I am not actually pointing you out specifically since you have actually offered some reasonable ideas in some of these threads that recognize the limits in this case) are simply denying the reality of those limits, and that is basically what DeLong has tried to do here while, at the same time, completely mischaracterizing Cowen’s writings.
Until you can convince the electorate that there are, in fact, limits to what the government can pay for, then all this talk about reforms to do this or that are likely to not amount to much. Take the criticism leveled about people who would take the cash payout, but then get a medical condition requiring government to pay for, and that the electorate won’t be able to enforce that contract. To assert that such a person would receive as sympathetic a response from the public equal to that received by any ordinary Medicare/Medicaid recipient seems quite strange to me, but let’s assume that I am wrong- that means that saying no to sick and dying people is much, much harder than even I think it is, and if it is, then that probably means there is no way to control costs until the government literally can’t find any more money to spend. Cowen’s suggestion is a potential way to buy this acceptance of limits from the electorate by actually making them put a price on their medical care after age 65. Sure, there isn’t a much of a market for medical insurance after age 65, but this is because the concept of insurance is badly malformed in the public’s mind. It is a literal impossibility to insure against aging since the entire population suffers, or will, from this malady. A 65 year old either has to have saved his entire life to cover his medical needs related to aging and dying, or he simply has to accept the inevitable in the end. Right now, we are in denial about this, and the evidence is that the resources being consumed by the elderly are vastly outstripping the medical taxes and premiums paid by such people over the course of their lives. It worked for a while because the non-elderly population was large enough to carry the increasing load, but that is coming to an end, and rapidly. We can discuss where the government should stop paying, and we can disagree, but that limit is surely lower than where it is being set today, and at the same time the entire culture is being told it doesn’t have save against the heart disease, cancer, diabetes, dementia, and other maladies of aging because the government will be there to take care of it. We might well be screwed, and this applies to all of the Western European countries, too.
1. Tyler’s post is not focusing on limits to medicare. It is focusing on a private insurance substitute to medicare. If we focus on end of life care, limits on what is within the realm of reasonable, rational care, we would be having a different discussion.
2. The government doesn’t pay for anything. Citizens pay, one way or the other.
3. It also seems strange to me that the public would accept a cash payout for someone. In fact, that is probably not what the final stages is of Tyler’s game here: the next stage would be, “Why give the money to the government in the first place if they are going to give it back to you later.”
4. We can price medicare after 65 by, for example, not paying for the last six months of care–that would come from the estate (with an exclusion if there is a surviving spouse) and would make people rational about emotional issues involving futile care.
Bill,
I don’t think Tyler’s post says anything about private insurance?
That’s a good point, but in terms of medicare or any insurance policy he is in promoting private insurance in the sense that if a person exits the system he is self-insuring, which then creates a pooling problem, and even a problem in setting the initial premium (if you know in year0 that in year45 those who self select out (either because they need cash or because they have a view of their health that differs from the average of the entire population), how do you write the premium in year0 through year45). What would probably happen for the exiter would be that the person would go out and try to buy private insurance, leaving only the bad risks in the pool.
Bill,
Of course Cowen is talking about limits on Medicare- but he is attempting to get the seniors to define those limits themselves by giving them an option to take it as traditionally offered or not, so #1 is wrong flat out. He is assuming, and I agree with his proposal to this extent, that the cash taken for the opt out will be smaller than the costs of keeping them in the traditional program. As it stands, a senior has no incentive to not consume as much as Medicare will pay for since practically none of the saved resources accrue to the individual.
#2 is kind of irrelevant to the discussion since the consumer of Medicare/Medicaid isn’t paying directly for the services to the extent of the actual cost. The cash buyout is a way of making this cost more direct on the actual consumer, but in a roundabout way that I am not sure I actually would support, but I do find the idea coherent.
#3 is something that might happen, or not. This is why you have try things.
#4 is an interesting idea. I think it may run into some problems, but I wouldn’t dismiss it out of hand.
Re your response
1. Your comment: “As it stands, a senior has no incentive to not consume as much as Medicare will pay for since practically none of the saved resources accrue to the individual.” That is like saying: It’s sunny outside and I want to go to the hospital for a good time. I don’t know many people who choose to visit the hospital for a good time or chose medical procedures to get their jollies. And, medicare does not cover things like wrinkle removing, facelifts, etc. It does deal with strokes, heart attacks, and other such fun things.
2. Your comment: ‘The government doesn’t pay for anything. Citizens pay, one way or the other.” That’s my line. I’ve used it elsewhere and should have copyrighted it. And, that’s the point: citizens chose this, didn’t they.
3. You’re not making a criticism of my point that Tyler’s proposal would, for those who don’t think about it, eliminate medicare deductions in the first place, leaving us with the problems we had before. But, at least you’re honest.
4. Agreed
Genetics aren’t dice.
It is before the sperm hits the egg, unless it is a dominant gene.
In every sense of the word, you were an accident and a random occurence subject to Brownian motion.
And, a good swimmer, too.
“And, a good swimmer, too.”
And even then, you just said it isn’t dice. I suspect that the sperm has to be a good competitor is one of the first (and not even the first) screens. Not even that is random.
More and more people are failing the Turing Test.
The question then becomes “what is the level of basic, for “free” care”. We already have that system in place, and people are free to buy Medigap policies to cover the difference. The Ryan plan is something completely different.
Glad to see DeLong is bringing the principles of positive economics to his readers.
anne said…
“Tyler Cowan would probably say: tough. If you were born with a tendency toward high cholesterol you ought to have known that by age 20 and been busily saving all your life in order to pay the extra expected costs of treating your heart diseases.”
Quite a monster, but no surprise.
DeLong is implying that plentiful medical resources are going to sit idle while we watch people die. This assumes a lack of scarcity. What we are talking about is how we deal with scarcity. That’s why we are talking about this in the first place, In fact, it’s not even a scarcity of medical services but of government funds. Someone is going to die from a lack of treatment if you assume scarcity. How does DeLong propose that gets decided? Not voluntarily with the use of foresight? How will the capital be allocated and rationalized without tapping foresight? How are we going to have the desperately needed individualized medicine (this is one reason the drug pipeline is drying up) if these things are determined by the panels in D.C.? This is accomplished in places like the UK by simply not having as many MRIs and not doing the biotechnology research and clinical trials. There are some merits to such a minimalist approach to medicine, but what it ain’t is providing everything to everyone.
I am struck by the shrillness and unprofessional manner of DeLong’s post.
Then you haven’t read the comments here.
Bill, just a reminder: as of my post 9 of a total of 49 posts are yours.
So? That makes 50.
At some point, we will realize the absurdity to trying to insure against getting old and dying of age related illnesses. And I don’t give a flying f*&k if we try to do that via private insurance or Medicare. To get the flavor of this ingrained absurd belief system, just look at the part of DeLong that Cowen quoted:
Now, just add to heart disease all the other age-related diseases (cancer, diabetes, dementia, other atheroscleroses, organ failures etc.), humans suffer from and eventually die from if they live long enough. You have literally included nearly everyone in the insurance pool drawing from the insurance pool. Then add to that the advance of medical technology that, while extending life spans, simply extends the time during which said people draw from that pool and at increasing costs. Certainly one can see that the major part of the solution has to be expecting people to be busily saving all one’s life in order to pay the extra expected costs of treating one’s age-related diseases, or accepting that there will be a tradeoff later in life.
Now, ask DeLong what he thinks an “early death” is. Is dying of a heart attack at 70 an early death? Or is it at 60? Or at 85? Which is it? Surely, at some point, medical care, if it eats up available resources to a certain point, will have to be rationed by age. It literally makes no sense to me to be spending scarce resources treating 75 year olds when you could spend the same amount of money treating 3 50 year olds. It makes even less sense if you are taxing the 50 year olds to treat the 75 year old who didn’t busily save to cover his health care in retirement.
God bless you, Yancey.
I was going to say something like that, only not as eloquently.
And I was probably going to be meaner to Brad DeLong, too.
Cowen makes vague but politically charged points about his preferences for Medicare. Then he disagrees with Delong’s interpretation of his remarks and follows up with more statements that fail to specify what he means. For example, as some commenters have asked, what is the “core set” of benefits that everyone would receive?
Nothing is stopping you or the other commenters from suggesting this “core set”. The economics of the programs today suggest the core set is already far too large and extensive.
YW4tWin
Ceaser,
That is because what Cowen is doing is economics. What DeLong is doing, at least in this particular post of his is advocacy. It’s barely even advocacy, but more like political polemic.
With healthcare coverage (I will not say “insurance”) the usual sensible suggestion is to provide catastrophic coverage (catastrophic being defined by income) and then allow people to be responsible for their more routine costs by whatever arrangements they wish. This is what the more responsible, non-social Darwinist conservatives argue for. I wonder why Tyler doesn’t go that route instead. This solves largely the free rider problem, greatly reduces adverse selection, and introduces cost competition into the system in a serious way.
Hey guys – what if MOST PEOPLE (not 100% but more than DeLong implies) could prevent THEMSELVES from getting dangerously high small, dense particles of LDL (THIS is what causes heart attacks/disease – not “cholesterol” in general).
All these controlled experiments CAUSED decreases in LDL –
Weight training
http://www.ncbi.nlm.nih.gov/pubmed/3824017
http://www.ncbi.nlm.nih.gov/pubmed/21459690
Other exercise (I think walking/jogging/cycling in this experiment)
http://www.ncbi.nlm.nih.gov/pubmed/9789849
Fat loss through a comprehensive program of diet, exercise, vitamins
http://www.ncbi.nlm.nih.gov/pubmed/12173568
High-protein diet
http://www.ncbi.nlm.nih.gov/pubmed/15941879
http://www.ncbi.nlm.nih.gov/pubmed/18469290
And wow, here’s a direct answer to DeLong’s question –
http://www.ncbi.nlm.nih.gov/pubmed/19524157
“Three cohorts, with a total of 678 children (49.1% female, 79.9% nonblack) initially aged 8, 11, and 14 years, were followed at 4-month intervals (1991-1995)…Increase in body fatness was significantly associated with increases in total cholesterol, LDL-C, and triglyceride levels.”
Since people like living more than money, that is, the will to live dominates the desire for money, you would expect that we would be doing the above exercise routines Notwithstanding the prospect of a lower copay for private insurance in one’s old age.
Yet we do not.
That tells me that even if there were no social insurance and only private insurance for old age medical care that the treadmill would still be, unused, in the garage. Which it is.
But, it also tells me that you must be young. Which means you are doing all this exercise for the chicks and probably not your health. Chicks bring happiness. Lower copays are too distant.
This isn’t about lowering my future medical expenses but rather avoiding future hospital stays and sickness. To me, the stress, pain, boredom, waste of time, etc. associated with disease and its treatment is a VERY high personal cost.
Yes, vanity also plays a role. But I know plenty of people who stay fit with a low body fat % well into middle age and above.
Explain your sentence to me: “This isn’t about lowering my future medical expenses but rather avoiding future hospital stays and sickness.” Is that like, in algebra, A does not equal A?
Of course this raises the question of how much medical spending goes on treating exercise-related injuries, and what people will die off instead of the high cholesterol. If it’s instantaneous heart attacks, it probably saves money, if it’s Alzheimers, it probably doesn’t.
Ever heard of “dying in your sleep” at home? It’s what happens to 90-year-olds (dying of pneumonia at home, etc.). Tends to be a LOT cheaper than the ways in which 60-year-olds die.
“The correct way to proceed is not to lash out, but to start by admitting in which spheres the approach makes sense, and then seeing how far outwards those arguments can radiate.”
Nice job convincing them not to lash out.
Do you have any numbers on point two? I assume that someone who smokes a pack of cigarettes a day versus a pack a week has higher healthcare costs – is this correct? And if this is so then there is a likelihood of asymmetric information occurring – insurers have no way of knowing if you smoke a pack a day or a pack a week, but you will know for sure. This strikes me as a key flaw in private health insurance that can only be got around by insuring all are insured.
Also, re point five – I think this is the key flaw – the situation where someone takes cash at age 65 but then hits age 80 and gets sick will still require healthcare, and unless you are suggesting that they should not receive this healthcare (is this acceptable?), then somebody will have to pay for it – be it the patient, a relation, or the government. I can’t see many sick people meekly accepting their death. But perhaps this is what you are suggesting – just to clarify.
How is that a flaw in private but not public health insurance? What is the difference? In public insurance they can’t discriminate on the basis of smoking at all, right? So not only do you have to cover those people but you encourage them to smoke.
Once “the public” (as in, the government) pays, then they declare themselves justified to dictate more behaviors than just smoking. Are they going to let you take your chances with smoking as long as you promise not to burden the system with smoking-related (or other behavioral) diseases? No. Are they going to determine that some people have the genetic polymorphisms that make smocking a non-problem? No.
I will take this opportunity to point out that they finally after about 2 years got the direction of adverse selection right.
“I think Ezra is completely correct. But Ezra misses a big point: adverse selection. Some seniors will cost Medicare zero. Some seniors will cost Medicare $2,000,000. The seniors know more about their health status than the insurance companies do.”
And I won’t assume that they will simply switch it back when it fits their argument du jour.
Of course the big point that DeLong misses is to bring that asymmetric information out into the market. Simply fining all the poor people $750 a year doesn’t cut it, and it isn’t ‘compassionate’ either.
You tried to set a link between this two contradicted matter. It’s a great job.
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