ACHA, the Republican health care plan, appears to be a non-starter

by on March 7, 2017 at 8:23 am in Current Affairs, Law, Medicine | Permalink

Here is Ezra Klein on the new health care bill.  Avik Roy doesn’t seem entirely crazy about it either.  I don’t have anything to add to their two fine reports.  Read Bob Laszewski too.

1 Dave Barnes March 7, 2017 at 8:32 am

ACHA. Soon to be called TrumpCare.

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2 Lee A. Arnold March 8, 2017 at 5:45 am

TrumpNoCare.

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3 Rock Lobster March 7, 2017 at 8:44 am

The Repubs were lying the whole time? I’m shocked.

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4 Rock Lobster March 7, 2017 at 8:48 am

I’m sorry, this was not a productive comment. I take it back.

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5 mulp March 7, 2017 at 1:09 pm

If you really believe in free lunch economics, are you actually lying when you introduce and advocate policies and legislation consistent with free lunch economics?

Since Reagan, conservatives have convinced Republicans to believe in free lunch economics.

Applying free lunch economics to this situation, this Republican bill argues that if no one can pay for the cost of costly medical treatment, then the mandated costly medical care will be free.

In other words, eliminating Medicaid and eliminating the mandate for buying insurance that will be done by those with no assets including high income job security, millions of people will have cheap medical bills at trauma centers from accidents, heart attacks, strokes, gun shots, flu, pregnancy, genetic problems like ALS, CF, etc.

It’s the same free lunch economics that argues that by not paying to fix congested roads, washed out roads, broken water mains, etc with taxes, roads will never become congested, the pavement will never deteriorate, the steel in bridges will not rust, storms will not wash out roads, water pipes will not break from shifting land caused by water or cold or heat and drought.

The only reason for expensive medical bills and expensive to fix infrastructure problems is the liberal ideology of paying medical bills and paying people to fix infrastructure, the liberal religion of tax and spend to pay people to work.

Conservatives believe in free lunch economics of cutting labor costs and not paying people to work to create wealth and create jobs.

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6 Todd March 7, 2017 at 8:52 am

Wow. ‘Worse than imagined’ is a pretty low bar to trip over in DC. If they can’t agree on anything that makes any sense maybe they could just admit it and quit.

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7 rayward March 7, 2017 at 9:01 am

Who comes out ahead with the Republican HCP? High income earners who get a big tax cut and the nearly old who likely don’t get a subsidy under Obamacare but likely will get a subsidy under the Republican HCP (a full subsidy with income up to $75,000 for a single person or up to $150,000 for a married person, reduced in 10% increments above those income levels). Redistribution upwards is, of course, the Republican Party’s primary policy goal, so nothing surprising here. For the nearly old, it’s give and take, with the Republicans hoping the nearly old won’t notice the take. During the deliberation of Obamacare, I often commented that Obamacare lacked a dependable constituency (people with low incomes don’t vote), and questioned why the Democrats didn’t go after a more reliable constituency, in particular the nearly old (there are a lot of them and they vote in large numbers). The Republican HCP attempts to reach that constituency with subsidies generally not available to them under Obamacare (because their incomes are too high). The nearly old will appreciate the subsidy because it’s transparent, but may not notice what’s opaque, namely that the Republican HCP allows insurers to charge the nearly old five times what they charge the young (as compared to three times allowed under Obamacare). What might say that the Republican HCP combines the Republican’s natural constituency (the wealthy) with Trump’s natural constituency (the stupid). Win, win!

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8 AlanW March 7, 2017 at 9:34 am

Good comment. Republicans, though, have benefitted from the silence of the insurance industry (and health care providers). There’s not much here for them to like. If they walk away while this bill is being debated and crash the individual market, who gets the blame?

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9 mulp March 7, 2017 at 1:35 pm

Obamacare has a huge and powerful constituency: the entire health care industry.

This bill will slash payments to the health care industry by perhaps 10% if passed.

Doctors will lose paying customers.

ERs will gain large numbers of non-paying customers, many who show up sick because they have not been treated for diabetes and high blood pressure.

Drug companies will lose paying customers.

Medical suppliers will lose business.

Medical staff will lose jobs.

All these parties have lobbyists and do engage in politics.

In the past, they blocked Democrats in the 60s seeking Medicare for All, limiting Medicare to only the old who could not pay medical bills requiring doctors to provide it for free, and to the poor who ended up at public hospitals unable to pay.

They blocked Clinton on an effort to rationalize US health care delivery in 1994.

Obama, like Romney, focused on paying for medical care that was going unpaid, and on the high cost to businesses who got stuck with the costs of medical care that went unpaid: employers.

Obamacare requires everyone to have the means to pay for medical care when they need it, except for the carve outs conservatives have succeeded in creating. But Obamacare has mostly eliminated hospital bailouts, so in the Republican States that refused to adopt Obamacare, hospitals are going bankrupt, making big parts of rural America unacceptable to corporations.

Corporations are willing to abandon rural America which means they eliminate jobs in Trumpland. Corporations demand to be paid, and refuse to pay all the costs of a community on their own. They will not go into a place run by Republicans with high unemployment where the corporation is required to build road, water, sewer, schools, hospitals, plus their factories. Much easier to go someplace where the government pays all those costs, say Mexico or China.

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10 Ricardo March 7, 2017 at 9:01 am

Some of our resident right-wingers like to indulge in the conspiracy theory that Democrats deliberately structure the safety net to provide disincentives for the poor to work harder. So I thought this paragraph from Avik Roy’s summary was important to emphasize: “As I wrote last month, the AHCA creates a steep benefit cliff between those on Medicaid (subsidizing approximately $6,000 per patient per year), and those just above the poverty line who will get tax credits of about $3,000. People just below poverty will be strongly disincentivized to make more money, effectively trapping them in poverty.”

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11 prior_test2 March 7, 2017 at 9:19 am

Republicans love the poor.

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12 The Anti-Gnostic March 7, 2017 at 11:26 am

A lot of people living paycheck to paycheck vote Republican. The idea of Republican voters as all these fat robber-barons with cigars stuck in their mouths on their way to golf at Augusta National is downright silly.

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13 mulp March 7, 2017 at 1:41 pm

Republicans promise that tax cuts will put money in your pocket.

The tax cut most workers get from Republican policies is lower wages and job loss.

Trump is promising to bring back the jobs destroyed by Republicans by spending a trillion more on infrastructure. But Republicans have been cutting spending on infrastructure for years which has killed jobs delivering huge tax cuts to millions of workers.

Ironically, Trump is promising to hike the taxes of workers by giving them middle class jobs building infrastructure and working in factories.

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14 prior_test2 March 7, 2017 at 12:36 pm

‘The idea of Republican voters as all these fat robber-barons with cigars stuck in their mouths on their way to golf at Augusta National is downright silly.’

Of course it is silly – those fat robber-barons with cigars stuck in their mouths on their way to golf at Augusta National love the poor as much as any Republican voter living paycheck to paycheck. Republicans are well known for the degree of compassion they display towards the poor, after all.

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15 Cliff March 7, 2017 at 1:23 pm

I wonder who gives more to charity? Republicans or Democrats? Rich Republicans or rich Democrats? Rich Republicans or Germans?

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16 Dan in Euroland March 7, 2017 at 12:13 pm

The goal of the liberal elite is to create a permanent underclass through which they can perpetuate their rule. They can credibly commit to redistributive policy and once they undermine the human capital production process through their “re-education” system they can permanently destroy the human capital of millions. Thus they have a locked in constituency.

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17 Troll me March 7, 2017 at 12:39 pm

Doesn’t add up.

It’s the billionaire Republicans who find ways to get large number of working class to vote against their interest for billionaire tax cuts and reduced services which benefit the working class.

As in, it looks rather the opposite of what you say.

The point about free stuff affecting incentives is true, but very often there is a lack of resources which impedes upward progress and the handout pays off well for the taxman on average in the long run. Also, it is easier to engage in risk taking to the extent that will have higher expected value without having to worry too much about downside risk if there is an OK safety net.

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18 Hazel Meade March 8, 2017 at 8:58 am

Maybe the working class has a better idea of what it’s interests are than you do.

More importantly all of those services are NOT paid for by billionaires. They are paid for by the middle-class. There is no other group of people large enough to supply the necessary tax revenue. The social distance between the working class and the middle class is not so large that working class people do not see how the marginal tax rates affect them and make it harder to build a middle-class lifestyle. Moreover, working class people already have some idea of what will help them achieve upward progress, they don’t need a social worker telling them to go to job retraining programs – they can make their own decisions about what sort of career path they want to pursue. And they would rather you just let them keep the money and reinvest it in themselves then tax it away and spend it on paternalistic services that someone who has no clue about their lives thinks they ought to be using.

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19 FUBAR007 March 8, 2017 at 12:22 pm

Hazel: The social distance between the working class and the middle class is not so large that working class people do not see how the marginal tax rates affect them and make it harder to build a middle-class lifestyle. Moreover, working class people already have some idea of what will help them achieve upward progress, they don’t need a social worker telling them to go to job retraining programs – they can make their own decisions about what sort of career path they want to pursue.

Hazel, I really, deeply, truly wish this were true. I truly do. Unfortunately, it’s not.

The vast majority of people are not competent enough at life to accurately perceive their long-term interests. By nature, most humans are foolish, lazy, stubborn, overconfident, short-sighted, and awful at calculating long-term risk. Due to the unraveling of mediating institutions–church, family, local community, etc.–which transmitted general best practices in life, this incompetence gets more pronounced and pervasive the further down the socio-economic ladder one looks. Individual initiative is only one of many determinants of how well one does in life. All the pluck and elbow grease in the world is pointless when one is clueless.

Are there exceptions? Sure. Horatio Alger was mostly, but not completely, full of shit. Nevertheless, highly motivated, disciplined, and diligent auto-didacts are only a minority of the population. The rest have to be taught, if not told, what to do.

I agree the state has generally proven to be a mediocre-to-crap substitute teacher. The question then concerns who, in the absence of the aforementioned mediating institutions, ought to do the teaching.

20 Troll me March 8, 2017 at 11:43 pm

It is possible to have an education and many ways to understand the working class at the same time.

I’m tlaking about billionaires in their capacity as shareholders, CEOs, venture capitalists and the rest. Not as consumers. I don’t think billionaires are very relevant as consumers, except in B2B markets, which generally receive very little political attention.

21 mulp March 7, 2017 at 2:01 pm

So, you believe in creative destruction of broken, old, unproductive human capital?

Euthanize the sick, old, unemployed, uneducated and harvest their organ for sale to the rich!

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22 Thor March 7, 2017 at 3:30 pm

How’s your liver? Asking … for a friend.

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23 Troll me March 8, 2017 at 11:44 pm

I wouldn’t have mentioned that it’s nice to have a safety net if that were the case.

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24 byomtov March 7, 2017 at 4:59 pm

Actually, the goal of the conservative elite is to create a hereditary tax-free aristocracy. No estate tax, little or no tax on investment income. Looks plain as day.

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25 Ricardo March 7, 2017 at 6:44 pm

So then why did House Republicans just propose legislation that provides a disincentive for the poor to work?

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26 Boonton March 7, 2017 at 2:55 pm

“Some of our resident right-wingers like to indulge in the conspiracy theory that Democrats deliberately structure the safety net to provide disincentives for the poor to work harder.”

This is less about conspiracy and more about conflicting goods. If you want to help poor people, you will have a steep drop off so someone will loose a lot of help as soon as they pass whatever your income threshold is for being poor. If you try to get rid of the steep threshold you end up with a program that costs 100 times as much because you will end up subsidizing everyone all the way up to $100K or more. Paul Ryan’s ‘solution’ is to stiff the poor so they can’t really get much health care, in that case there is less to ‘lose’ by additional work. Universal Income schemes fall into the same issue. You are either giving them to everyone (which inflates the price tag) or targeting them to the poor (which inflates the tax the person just on the edge of poverty faces when considering working some overtime or taking a slightly better paying job).

I’m open to analysis along these lines but I think we need to consider the following:

1. Cash benefits can be spent while non-cash can’t. Telling a 30 year old who sees the doctor once a year who has Medicaid that they are getting $10K per year in ‘health coverage’ just doesn’t seem very convincing. A person could eat, drink and have some fun with $10K a year cash. $10K a year insurance not so much.

2. In an ‘average is over’ age, what exactly is the economic benefit of greater labor force participation by those at the bottom of the income ladder and skill set? Will GDP really surge if many collecting food stamps suddenly started flipping burgers? Is this a moral issue, that we think people will become decadent, lazy, or immoral if they fall into sloth? Then we can subsidize low paid work or require people do volunteer ‘public service’ type work for some types of benefits.

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27 JonFraz March 7, 2017 at 3:44 pm

Re: If you try to get rid of the steep threshold you end up with a program that costs 100 times as much because you will end up subsidizing everyone all the way up to $100K or more.

This could be avoided by creating a point at which people have to start paying something, but are not cut off entirely. In the case of healthcare we could buy-ins to Medicaid whereby anyone over the poverty level (or whatever level seems best) has to start paying a premium pro-rated to their income for their coverage. This avoid the steep drop-off while creating an income stream from the people who are above the poverty level. It shouldn’t discourage work any more than the fact that most company health plans today require people to pay some of their premium.

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28 Boonton March 7, 2017 at 4:07 pm

That helps but you still get the same effect. If you are providing a $9000 benefit and for every $100 per year the person makes you make him pay $10 towards the benefit….the benefit will go all the way up to those earning $90,000. Even then you are talking about an effective marginal tax rate of 10% on top of all the regular taxes you pay whenever you earn $100. In 1993 Bill Clinton raise the top tax bracket from 36% to 39.6%, just 3 points. Imagine the hell raised if the increase had gone from 36% to 46%. 10 points is a big deal when it comes to taxes.

On the other hand if your goal is to just make sure the bottom 10% are covered you could accomplish the same thing with a fraction of the money by simply having a direct cut off. But that does create a margin problem. For example, Vox’s The Weeds podcast had a anecdote about a cab driver who just got a $1/hr raise. Normally that’s good for the worker but in that case it pushed him out of Medicare (where almost everything is paid for) into the exchanges where he had to pay for a plan with copays and deductibles.

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29 Adam March 8, 2017 at 9:52 pm

Really, a UBI or a negative income tax seem like the least disruptive way to deal with entitlements. They aren’t perfect, but better than the complete mess we have now.

30 Hazel Meade March 8, 2017 at 9:20 am

1. The poor may not prioritize health insurance for legitimate reasons. Living a really long time isn’t always a universal value. Many people would rather spend their money reinvesting in themselves, improving skills, starting a business, or providing for their children, and would accept a shorter lifespan if that’s the cost. Now, a lot of people would also just blow it on drugs – many poor people are poor because they have mental health or substance abuse problems. But I don’t see medicaid really changing that significantly. Does giving drug addicts $10K a year in health coverage actually change their behavior? I suspect that rather than harvesting resources from the economy and forcing everyone to spend it on health care, having a lower tax rate and a more vibrant economy would improve living conditions enough that some of these problems would be mitigated. Hopelessness and drug addiction has something to do with a weak economy and lack of opportunities. So, do you cure substance abuse problems by providing people with methadone, or do you cure them by providing them with economic opportunities?

2. The thing is that burger flipping is supposed to be a first job for a teenager, it’s not supposed to be a permanent full time job. We want people to be incentivized to make progress and move upward beyond the low skill burger flipping jobs. Those people aren’t supposed to stay at the bottom of the income ladder and skill set forever. It’s not about morality or sloth, it’s about showing people a path to self-sufficiency, self-respect and pride.

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31 Boonton March 8, 2017 at 10:19 am

1. I’m not sure I follow this. Say a poor person (or rich person for that matter) values quality of time over quantity. Rather than avoiding a heart attack in his late 60’s, he would rather eat, drink and party hard. He doesn’t want to take a lot of pills to keep his BP low so he won’t. So what’s the issue here? You may say he has ‘$10K in health coverage per year’ but the reality is he is consuming less health resources than the person who wants to maximize time no matter what.

2. “It’s not about morality or sloth, it’s about showing people a path to self-sufficiency, self-respect and pride.” This is not capitalism. Consider a person on an assembly line fastening pieces of metal together versus a plumber unclogging drains. The first job might be easily automated by a robot while the 2nd may not be so easily automated because the plumber actually has to get to the home or business. The plumber is going to make a nice income while the first guy is going to be hanging onto his job by a thread and even then might end up unemployed. Why should the plumber feel great pride and the first guy feel shame? If Apple invents ‘Smart Pipes’ that unclog themselves that plumber will suddenly be totally non-self-sufficient.

Work is not good in and of itself and if it is we very well may find giving everyone an opportunity to work may be in conflict with a market based economy.

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32 Hazel Meade March 8, 2017 at 2:05 pm

1. I don’t see the problem here. I’m saying that forcing someone to take 10K a year in the form of health benefits is a paternalistic value judgement that you are imposing on them. Let them make their own choices. Some people will prioritize long life and some won’t, and it won’t cost me anything.

2. I totally agree work isn’t good in itself. But I don’t agree that automation will create a class of superflous people that can’t contribute anything else to society. I think people just need to rethink how they can do something that someone else values and how that can be converted into a “job”. Maybe not even a literal job but a means of support, like being a stay-at-home-dad, or the guy in the group house that does all the cleaning.

33 Boonton March 8, 2017 at 5:03 pm

In regards to #1, the health insurance isn’t what costs, it’s the health care utilized. If you have poor people who are uncovered and then you cover them but they happen to prioritize enjoying quality of life rather than utilizing any and all medical means to enjoy quantity of life over quality then they simply will not use as many health resources and the cost of covering them won’t be as much.

Saying their coverage ‘costs $10K’ per year is a bit deceptive. It’s like when the public school says they spend $10K per year per kid. Yes strictly speaking that may be true but it doesn’t mean if one added kid goes to the school costs go up $10K.

34 Meets March 7, 2017 at 9:23 am

It reduces some of the more onerous and job-killing requirements so I consider it a marginal improvement to a bad situation.

Well, if it is really a bad situation. Maybe we just want to spend that much on healthcare.

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35 Jan March 7, 2017 at 10:17 am

I will surely also increase the deficit and result in many millions without insurance, and those that retain coverage will have skimpier plans with higher deductibles and co-pays.

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36 meets March 7, 2017 at 10:45 am

I don’t know that it can both increase the deficit and leave more without insurance.

As far as skimpier plans, shouldn’t those be available?

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37 Jan March 7, 2017 at 10:51 am

Of course it can increase the deficit and leave more without insurance. You do that by repealing the taxes, which is the whole point of repeal for Republicans.

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38 Cole March 7, 2017 at 12:13 pm

I love how reasonable being incredulous about this is, but welcome to the GOP in 2017. And the tax cuts benefit 0.1% of earners. Tells you how bad the Democratic Party is that these politics won them the White House, Congress, and 1000 state legislature seats.

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39 mulp March 7, 2017 at 2:36 pm

Democrats can’t lie like conservatives can. Democrats do no believe in free lunches. Republicans have fully embraced free lunch economics.

By making sure large number of people will not pay medical bills that must be created (by EMTALA), free lunch economics promises costly medical treatments will be free.

Free lunch economics promises the tax cut from lower income will put more money in your pocket.

After all, Republicans argue that progressive tax rates make workers keep their income low, or cause workers to not look for work, because getting paid $1000 a week more will make you poorer because of the $200 to $400 more in taxes taken from your pockets.

My taxes were much lower after the Bush tax cuts. But my net income thanks to Bush economic policies turned from $70,000 ($30,000 in taxes) to negative $10,000, plus $6000 in taxes. I then stopped paying Americans to work because it cut way back on spending to cut costs. If I were still paying $30,000 in taxes in 2002, I would have paid for a new $35,000 car and almost all cars in the US are manufactured with mostly American workers.

Instead, I bought a trike which has much less American labor cost because most bike technology is developed in Europe and Asia. Especially electric drive components. The core technology was American, but conservatives are opposed to new technology because that cuts the pillage and plunder of natural capital.

40 mulp March 7, 2017 at 2:15 pm

So, in your view, skimpy plans that won’t pay more of the costly medical bills will create jobs?

I gather you are thinking jobs in boiler rooms trying to collect on medical bills from people with lots of bills need to be restored.

But what of the health care jobs that have been created since Obamacare increased the number of medical bills that get paid which increases the number of jobs in health care?

Do jobs paid for by your required spending not could as jobs?

Until Republicans not only repeal EMTALA but call for death panels and government promoted assisted suicide, nothing will cut the costs of medical care, and given the high costs of government mandates to keep people alive in an environment promoted by Republicans that lead to premature risk of death, medical costs will keep increasing and THEY WILL BE PAID BY THOSE WITH MONEY TO PAY THE COSTS.

Republicans hid the costs with hospital bailouts. But Obamacare has phased out hospital bailouts because every patient is not only required to pay, but provided with the means to pay, except where Republicans got carve outs, and hospitals are going bankrupt because patients can’t pay and there are too few paying patients to pay for medical care for all.

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41 mb March 7, 2017 at 9:26 am

How does this fit in with the complacent class narrative? Would most people not care? Do you see that helping Trump win and the republicans with the repeal?

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42 Why think? March 7, 2017 at 9:43 am

Then what ?

Is there an alternative solution ?

Will you allow your viewpoints to be criticized or examined as much as you criticize and examine viewpoints?

What if instead of debate, a real attempt to learn the worries, fears, dreams and desires of others?

Can we admit that the whole system is in need of some serious overhaul?

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43 Hazel Meade March 7, 2017 at 11:30 am

Well, they could show some balls and actually try to tackle the actual problems – such as the tax deduction for employer-based insurance.

It’s mind-boggling to me. They have Donald Trump to distract everyone’s attention while they control both houses of Congress and instead they show themselves to be the most spineless pussies imaginable. When the D’s had both House and the White House, what did they do? Did they puss out and pass some watered down bullshit or did they ram through the most aggressive takeover of health care they could get through the Senate?
What’s the point of having power if you’re not going to use it?

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44 ChacoKevy March 7, 2017 at 1:31 pm

D’s had 60 senators back then. Without 60, these days, does a party really have a majority?

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45 Hazel Meade March 7, 2017 at 2:20 pm

If the D’s are going to use the filibuster, you should make them use it. Don’t puss out without a fight. Also, if they are going to filibuster you no matter what you propose (which they will, obviously) then you should propose something GOOD that will actually work, and not some weak-ass bullshit designed to curry favor with people who will spit on your hand.

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46 mulp March 7, 2017 at 2:52 pm

Actually, Democrats had 57 votes plus a socialist, plus a McCain supporting independent kicked out of the Democratic party, plus Arlen Specter who was kicked out of the Republican Party by Mitch McConnell in April 2009.

McConnell has maybe 45 conservative Republicans plus 5 anti-government burn the house down anarchists elected as Republicans, and maybe one or two 60s era Republicans.

I don’t think McConnell can pass anything that will become a Republican law with just 50 votes. (Plus Pence).

For many conservatives, Obamacare is better than anything that isn’t totally “free market” and thus results in death and destruction. Of course, these people believe in free lunch economics which holds that if you don’t pay for something, you will get that something for free. Ie, don’t pay to fix roads, and the roads will be fixed for free. The free in free market means free stuff. Everything should be Google. Google roads would be free. Google health care would be free. Or even better, Snap roads and health care which don’t have the ads that Google does.

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47 JonFraz March 7, 2017 at 3:41 pm

Getting rid of the tax deduction for health insurance would raise working people’s tax bills enormously (the special deduction is for the employee, not the employer). Do you think the GOP wants to become the party known for enacting a steep tax increase on the working and middle class?

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48 Daniel Weber March 7, 2017 at 7:44 pm

Replace the tax distortion with a flat tax credit of, say, $4000 per person.

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49 Hazel Meade March 8, 2017 at 9:27 am

You could replace it with a tax deduction for all individual insurance policies. That should make it roughly tax neutral, although people may choose not to spend their money on health insurance at that point.

The idea is that if you get rid of the deduction employers should just pay their workers more salary and stop paying them in health benefits.
The worker can then spend those extra salary dollars on health insurance, possibly buy a cheaper policy, and have additional income to spend on other things. The net tax burden might rise, but the additional income (savings from not spending it on expensive insurance policies) is more than the additional tax you pay from not getting as much of a deduction.

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50 Hazel Meade March 8, 2017 at 9:34 am

Also, I should point out that the deduction we’re talking about applies to both employer and employee. Health benefits are not included in your salary, and premium payments are deducted pre-tax from wages on your W-2. The employer can also count it against earnings as part of expenses. You don’t actually have to claim it as a deduction on your tax forms because it’s automatically taken out of your W-2 earnings.

What I would do is change it so that you can deduct ANY health insurance policy in addition to the standard deduction, whether it is something you purchased yourself or got it via an employer. That makes it neutral and removes the incentive to get your income in the form of health benefits. Then I would remove the employer mandate and allow employers to slowly transition out of paying for health benefits.

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51 lambert March 7, 2017 at 10:04 am

“Is there an alternative solution ?

Most certainly. Revert to the year 2011 status quo.

Longer term, get the government entirely out of the health care business.

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52 Jan March 7, 2017 at 10:19 am

Ultimately, the solution that will cover more people for far less money is single payer. We will end up with some version of that, but the question is how long it will take.

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53 Cliff March 7, 2017 at 1:25 pm

What would be the mechanism by which that would reduce costs?

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54 Thomas March 7, 2017 at 2:53 pm

Ending pharmaceutical and medical device research and development by legislating MC=MR for medicine and medical devices.

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55 Lee A. Arnold March 8, 2017 at 5:53 am

Cliff: “What would be the mechanism by which that would reduce costs?”

Getting private insurers out of the healthcare business would save approx 20% of every dollar spent on healthcare.

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56 msgkings March 8, 2017 at 11:44 am

It would destroy the insurance industry and the good paying jobs that go with it. Might be worth it, but again, every dollar saved in medical spending reduces someone’s income.

57 Alain March 7, 2017 at 10:49 am

It is very hard to roll back entitlements. This was well known during the drafting of the ACA.

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58 Hazel Meade March 7, 2017 at 11:31 am

it’s certainly hard if you don’t even bother to try.

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59 Alain March 7, 2017 at 12:37 pm

It is impossible to stand up to the media stories that will focus on the 3 year old child who suddenly, somehow, is no longer applicable for some random medicine. Loss aversion is a thing.

ACA was an access entitlement sold as a cost savings plan. It was disingenuous to be sure, but it is what we have to deal with.

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60 msgkings March 7, 2017 at 12:53 pm

There’s a lot in the ACA that is very much about cost containment, and a lot of that has been working very well. But there’s no way to discuss it because it’s “Obama bad! Obamacare bad!”

61 Hazel Meade March 7, 2017 at 1:02 pm

It is impossible to stand up to the media stories that will focus on the 3 year old child who suddenly, somehow, is no longer applicable for some random medicine.

Perhaps Trump’s most redeeming quality is that shit like this doesn’t even faze him.
He’ll just tweet something about Democrat fake news while inventing his own.

Seriously, if you’re going to be afraid of three year old boys and scare stories you’re going to be pussies forever.

62 Chip March 7, 2017 at 6:00 pm

Bingo.

The UK’s NHS may lurch from crisis to crisis while providing 5-year cancer survival rates similar to Bulgaria, but the people adore it.

I suspect this partly explains the attitude of Pelosi et al in passing anything at the time. They knew creating the entitlement was 99% of the battle. Having it work was relatively unimportant.

Societies slip toward statism incrementally like a pebble bouncing downhill. Reversing statism is hard and infrequent.

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63 Ricardo March 8, 2017 at 9:51 am

It is well-known that you cannot compare cancer survival rates across countries. Long “survival” rates may mean better cancer treatment or they may simply mean earlier diagnosis with no improvement in the mean outcome.

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64 mulp March 7, 2017 at 3:03 pm

“Longer term, get the government entirely out of the health care business.”

Basically, adopt the health care system of Africa, big parts of Asia. The best health care system is certainly in Somalia where there is no government in most of the country.

Healthy care there is really really cheap because no one can pay anything and the private power keeps out all government assisted medical care.

My guess is you think it was a bad move for the US and Europe to provide health care in response to ebola because the free market health care in Africa was doing a great job handling the spread of ebola. And US governors were corrupt for getting their State governments involved in dealing with ebola.

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65 JonFraz March 7, 2017 at 3:42 pm

Also a non-starter politically. The vast majority of people do not want to go back. the want to keep the ACA’s good elements and ditch the bad.

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66 Alan Gunn March 7, 2017 at 10:17 am

The Republican plan is indeed awful; probably worse than Obamacare. But Ezra Klein seems to think there’s a Medicare trust fund that will someday be “exhausted.” Hard to take a criticism from someone who believes that seriously.

What I’d find amusing if it weren’t so sad is that Trump is doing exactly the same thing Obama did: taking no interest in the policy issues and leaving the design of the program entirely to Congress. Who would expect an approach like that to produce anything good?

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67 RobZ March 7, 2017 at 12:24 pm

There are two trust funds that are lumped together under the Medicare trust fund label. One of the two funds is projected to run out
of money in 2028. (The one that pays for hospices and hospital stays for the elderly, as I recall.)

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68 Alan Gunn March 7, 2017 at 2:37 pm

Neither “trust fund” has any money to run out of. All they have is the government’s promise to keep paying. All the money that supposedly went to the trust funds was spent long ago.

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69 blades March 7, 2017 at 2:24 pm

AG, fully agree with you on Obama. Surely you didn’t expect Trump to take an interest in legislation?

He has already shown how he will “manage”. Take no interest in anything other than his talking points, then blame others when things go wrong.

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70 mulp March 7, 2017 at 3:11 pm

“What I’d find amusing if it weren’t so sad is that Trump is doing exactly the same thing Obama did: taking no interest in the policy issues”

You mean Obama didn’t fix health care by executive order?

I gather you believe Trump should issue executive orders making health care cost nothing, and the problem will be solved?

If all medical treatments are free, no one will need insurance or employer tax exempt benefits to pay for their health care needs.

And if you do not pay for your medical treatments, your medical treatments will be free. That is the free market which delivers stuff for free if you can’t pay the price listed. Or won’t pay the price listed.

The only reason things aren’t free is government interferes and dictates you must pay the price listed for stuff.

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71 Alan Gunn March 7, 2017 at 3:53 pm

How do you get from my complaining that Trump takes no interest in policy issues to claiming that I believe he should rule by issuing executive orders? Some presidents have from time to time made proposals for legislation, and made efforts to get it passed. Obama didn’t do that with Obamacare; he just let Congress design whatever he wanted, and then approved of legislation that did just the opposite of what he said he wanted when he was campaigning (remember when Clinton wanted a mandate and Obama ridiculed the idea?).. Trump is doing the same thing. Not that I really expect him to have any serious ideas to communicate.

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72 Alan Gunn March 7, 2017 at 3:54 pm

… whatever it wanted …

Wish we could edit these comments.

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73 Ray Lopez March 7, 2017 at 10:19 am

Foreign doctors are great, I use them too, but I will confess a prejudice: having been overseas and interacted with Chinese, Thai, Filipino and Greek doctors, I find their machines are a bit dated, their knowledge (with exceptions) less advanced, than US physicians, which explains why foreign doctors get jobs with the US poor (less competition).

PS–my personal US physician is a Muslim, a very good doctor, but they were trained in the USA.

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74 Viking March 7, 2017 at 10:20 am

The collusion between insurance and drug companies is synergistic, insurance is allowed a percentage, by accepting ridiculous high drug prices, insurance increases the value of cost +5%. Just like the case with immigration, the existing laws (racketeering) are perfectly capable of solving the problem, just the will is not there.

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75 Matt March 7, 2017 at 10:34 am

Much has been made (rightfully, I would think) about how long this has been in the works for how little there is to show for it. After seven years of promises to repeal the ACA, this bill has major, fundamental changes from a leaked version a few weeks ago.

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76 Moo cow March 7, 2017 at 10:37 am

They’ve had 7 years to come up with “something wonderful” and this is it? Obamacare Light? Less care! More expensive!

Wow.

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77 The Anti-Gnostic March 7, 2017 at 11:02 am

If they blow this they lose big time.

What the GOPe has not come to grips with is that they are no longer the party of solely the middle and upper classes. (H/T Ross Douthat). I think the US generates enough wealth that we should be able to find a way to socialize catastrophic medical events.

Also, wouldn’t a good starting point be de-linking medical insurance from employment?

Americans also need to grow up and realize there are trade-offs. The tort system is outrageous and needs to be pared way, way back. No country that socializes medical risk allows unlimited pain and suffering awards. And routine events cannot be economically socialized. Just as an example–perhaps incorrect and I’m happy to be proved wrong–past a certain age if granny needs a new hip joint she will probably need to pay for it herself. There is no reason that the market cannot lower costs in this area like it does everywhere else.

If Canada and Germany can do it I’m not sure why we can’t. Or maybe they’re not doing so well. I am not dogmatic about this either way. The government footprint is so large in so many things that some socialization of medical risk no longer alarms me.

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78 mulp March 7, 2017 at 3:45 pm

The US system is so superior because the wait time in the US varies inversely based on wealth from one hour to years to death, while in Canada everyone waits equally except for the wealthy who must wait until they can book travel to the US which has gotten more difficult as the US restricts entering the US increasingly.

The fundamental difference is in economic theory. Outside the US cost drives price, so cutting cost to customers, the price, means cutting both profit and costs.

In the US, the free lunch economic theory argues that by cutting the price by making sure customers can’t pay a higher price, and seeking to introduce profits into everything, costs will go down, especially labor costs. Cut prices and increase profits and labor costs will be driven to zero, and that will create jobs.

Conservatives believe cutting the payments for medical care, more jobs in health care will be created providing more and better medical care.

Liberals believe TANSTAAFL.

Progressives had increasingly adopted free lunch economics.

Voters vote for free lunch political economics.

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79 anon March 7, 2017 at 10:44 am

Some time ago I noted that the Republicans have a wonk shortage. Their philosophy of government (being anti-liberal) suppressed the need. I was pleased to see that theme picked up by Niel Irwin.

Why the Trump Agenda Is Moving Slowly: The Republicans’ Wonk Gap

You heard it here first.

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80 A Black Man March 7, 2017 at 12:05 pm

Wonk: A person who believes they are a genius because they memorized the rantings of other people.

No, we have a surplus of such people: https://www.bloomberg.com/view/articles/2013-11-20/blame-rich-overeducated-elites-as-our-society-frays

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81 anon March 7, 2017 at 12:34 pm

That does not actually connect on a rational level. I say “do the math,” and you reply “no, hate the people who do math.” Well, that leads back again to my observation and the Irwin article. When you “hate the people” you stop doing the math.

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82 Rich Berger March 7, 2017 at 12:50 pm

Like Jonathan Gruber?

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83 anon2 March 8, 2017 at 10:40 pm

Another factor, which you don’t mention, is that there’s been a lot of moderate Republicans who are reluctant to work with the Trump administration, leaving only the people who are bad at math behind.

I also think that this goes deeper than just a recent move towards libertarianism among Republicans. Observationally, you’re right that Republicans are allergic to theory, but your diagnosis of the causes is lacking. Informed libertarian positions that rely on statistics and model building and such are totally a thing. I think a bigger cause is the longstanding lack of quality representation for Republicans and libertarians in academia generally. Discrimination likely plays a part in this, see Jon Haidt’s work for details, but other factors are also probably involved. It’s a really big problem with deep roots, and I’m not sure how it can meaningfully be addressed.

Part of the reason this problem concerns me is that I’m a big believer in the ability of debate to sharpen people’s minds. If Republicans are a poor sparring opponent, then Democrat’s policy proposals also start to become worse. I think that the weakness of intelligent Republicanism is a major cause of the intolerant liberal left. A lot of millennials are communism-curious because they don’t hear any intelligent, nuanced viewpoints criticizing the weaknesses of centralized planning. For an example, look at the opposition to free trade among Bernie supporters.

I’m more of an independent than anything, but I think the Republican wonk deficit is bad for everyone.

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84 anon2 March 8, 2017 at 10:44 pm

Also, I think the people advocating for Democrats to be obstructionist towards Trump, even on good pieces of legislation, risk weakening their party in the same way that your article claims the Republicans have done.

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85 GoneWithTheWind March 7, 2017 at 10:51 am

I say let the Obamacare disaster die on the vine so that the press and the public will finally understand what a pile of shit it always was. No need to rescue it or save it let it die the horrible death that Obama had always planned for it. Don’t resuscitate it, don’t subsidize it, don’t fix it, let it fulfill Obama’s dream for health care which it seems fated to do.

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86 Jan March 7, 2017 at 10:52 am

If it dies it will be because Republicans were actively seeking to undermine it. They have been since it passed, and the administration did that this year by pulling the ads for enrollment sign-ups. Despite that and despite allegations of some death spiral about as many people signed up this year as last.

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87 anon March 7, 2017 at 10:55 am

Lol, to really play that game you should have voted Clinton.

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88 Barkley Rosser March 7, 2017 at 11:18 am

Does this mean you want to leave it alone because you think it is dying on the vine, Gone with the Wind? I know there are plenty of people out there who think it is dying, bu it is not, in spite of a spate of large premium increases last year. In any case, if you want to leave it alone to see if it will die, OK with me. When it dies, then maybe this plan or something else can be dragged in to replace it. Otherwise, well, the critics have pretty much put to rest any idea that there is anything worth anything in this Trumpcare plan, less care and more expensive indeed.

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89 GoneWithTheWind March 7, 2017 at 12:09 pm

It is a tar baby. It was always intended to fail. It intentionally took full effect after Obama left office. One would think that if it were so good he would have had it become fully effective right away rather than after his watch. As a tar baby no one should touch it. Remove the most harmful provisions i.e. the mandator feature for the enrollee and employer and the subsidies and let people decide themselves if they really want it. I’m sure most people will abandon it and let it die. The trick is to not be holding this tar baby when the music stops. leave it in Pelosi’s hands. If you want your Obamacare you can keep your Obamacare.

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90 Troll me March 7, 2017 at 12:44 pm

This is precisely one of the biggest problems in US politics.

You’d rather something bad happen just to have some partisan mud to throw.

It’s almost like sabotage for the country when too many people are up to such shenanigans. And, I do believe, this is rather more common among Republicans then Democrats.

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91 mulp March 7, 2017 at 4:18 pm

“I say let the Obamacare disaster die on the vine so that the press and the public will finally understand what a pile of shit it always was. No need to rescue it or save it let it die the horrible death that Obama had always planned for it. Don’t resuscitate it, don’t subsidize it, don’t fix it, let it fulfill Obama’s dream for health care which it seems fated to do.”

Where is it dying?

Oh, right, in the States that got carve outs from SCOTUS for implementing it, ie, Medicaid expansion.

Given Obamacare eliminating hospital bailouts because all patients will be able to pay their medical bills, the hospitals in rural Republican States are losing money on the working poor and shifting their costs of care to the insured by Medicare which involves private insurers for Medigap and the few with income to buy private insurance, small businesses and the wealthy, so the insurers find they can’t cut deals with providers to keep their bills down, so they pull out. Or if they force the prices down, the hospitals go bankrupt, so the insurers pull out.

The Blue States, and States that embraced Obamacare like Kentucky, have really benefited from a thriving health care system that is controlling costs for everyone because there is no cost shifting by providers from the poor to the middle class.

Obama focused on paying medical bills, and Obamacare pays far more medical bills.

Other than those covered by Medicare, the people with the biggest health care bills are the poor, most of them working poor. And when the poor got sick in the past, their medical bills were much larger. Trips and stays in hospitals from diabetes and heart problems cost more than trips to doctors and the cost of generic drugs, but those big hospital bills did not get paid, so those higher costs were shifted to everyone else.

And it’s cheaper for hospitals to see patients and write prescriptions and get paid by Medicaid, than to see patients in health crisis and admit them and then spent a lot fighting to get some payment from government or payments in higher overhead costs included in payments by insurers.

Note SSDI rolls have stopped increasing since the working poor do not need to be declared disabled to get government paid health care. When health problems make it impossible for older workers to work as required by employers and workers can’t afford to pay doctor and for drugs, they are defined by SSDI as disabled. But if they get Medicaid and get regular treatment that makes them fit for work, they are not disabled and thus not qualified for SSDI.

TANSTAAFL- refusing to pay bills for costs will not eliminate the costs.

When conservatives advocate death panels and government promoted assisted suicide, Republicans will be able to eliminate the costs they do not want to pay. Euthanize the poor, the sick, the old, the unemployed, and harvest and sell their organs to pay for the death panels, and you can eliminate the costs so you won’t have to pay for them.

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92 Benny Lava March 7, 2017 at 11:00 am

Conservatives care about deficits only when a Democrat is president. This bill has all the fixings of increased deficits so I expect conservatives will line up to fellate it. After all conservatives never met a deficit they didn’t like when a Republican is president.

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93 The Centrist March 7, 2017 at 3:40 pm

It cuts both ways. Within minutes of Trump winning the election, Democrats were worried about spending, and deficits. And suddenly against infrastructure investment.

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94 mulp March 7, 2017 at 4:55 pm

Which Democrat came out against infrastructure spending?

If Trump turns the roads you drive over to private corporations giving them a tax credit for 100% of the price they pay for the concession, and then approves a toll of 50 cents a mile for all your travel on that road, will you cheer!

That will not hike taxes nor sneak in a government tolls which is just a tax. Instead it will be free market profit seeking.

Of course when Republicans turned the Indiana Tollway over to the private sector, the government agreed to prohibit government building any roads that might compete with the private sector, but the government prohibited to private toll operating hiking tolls in a free market, so it went bankrupt. Tolls are being hiked anyway. Privatizing did not cut costs. It did create lots of winners on Wall Street who got huge fees from the privatization. Hoosiers did not benefit.

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95 Jonathan March 7, 2017 at 11:12 am

PPACA took a year to create, with last minute compromises to rope in the reluctant Democrats. Unwinding it will take a year, with last minute compromises to rope in the reluctant Republicans. This is the sausage factory at work, and focusing on the initial shipment of pig parts won’t tell you much.

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96 The Anti-Gnostic March 7, 2017 at 11:32 am

Fair enough, but there are plenty of extremely smart people in medicine and insurance that Trump could have been consulting. Public opinion has shifted, and the idea that a government of 320M people that takes in trillions in tax revenue per year is not going to join all the other industrialized nations in providing some level of universal coverage is simply not tenable. This is the tide Republicans need to take at the flood if they want to retain power instead of just being principled losers.

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97 Hazel Meade March 7, 2017 at 11:56 am

This is where the Republicans decide they have always been at war with East Asia.
Let’s bust out the posters of muscular union men with hammers.

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98 Hazel Meade March 7, 2017 at 11:33 am

Lipstick sold separately.

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99 rayward March 7, 2017 at 11:23 am

Avik Roy, Obamacare critic, reacting to Trumpcare: “Expanding subsidies for high earners, and cutting health coverage off from the working poor: it sounds like a left-wing caricature of mustache-twirling, top-hatted Republican fat cats.”

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100 Hazel Meade March 7, 2017 at 11:50 am

Here’s what we SHOULD do with health care:

1. Go back to the pre-2011 health care system. Square one.
2. Get rid of the subsidies for employer provided insurance.
3. Add guarenteed reissue with limits on premium increases for people that have conditions that last longer than the policy term.
4. Establish a regulatory body to monitor insurers to make sure they aren’t wiggling out of #3.
5. Add a small insurance tax that funds an “uninsured” backstop insurance pool, which only provides catestrophic hospital-only coverage for the uninsured with a very high deductible. Basically it compensates hospitals for providing emergency treatment for the uninsured. Sort of like UI but for the health insurance market.

Theoretically, what should happen is that #2 will cause people to start paying for their own insurance. That will lead to more high-deductible policies and more cost-control in the health-care market, which will ultimately lower premiums. #3 will cover people who develop chronic conditions while maintaining coverage. #5 deals with the issue of uncompensated care and medical bankruptcy for people that don’t maintain insurance.

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101 rayward March 7, 2017 at 12:06 pm

Of course, the heart of the Republican HCP had been elimination of the subsidy for employer provided health insurance. Then the Republicans discovered that doing so would prompt employers to drop group health insurance, casting millions into the world of individual health insurance policies and casting politicians who did such a thing into the wilderness.

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102 A Definite Beta Guy March 7, 2017 at 12:31 pm

Right, it’s politically feasible for anything beyond a small surcharge. The Dems imposed a so-called Cadillac Tax (which is the only feasible option), scaled so it would eventually hit EVERYONE, but even then it’s so distasteful that it’s basically dead.

It’s also just giving Dems another funding mechanism for their pet projects. They want the money, make THEM pay the political cost for implementing it.

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103 A Definite Beta Guy March 7, 2017 at 12:33 pm

Meant politically INfeasible.

More broadly, there’s no way to wonk your way into lower costs on this. Healthcare sectors require money to operate. That’s it. Thinking you can change incentives such that you will dramatically change the equation to somehow unite the parties on this is a fool’s errand. It’s a permanent fight over the pie, and the only argument is over who gets the pie and how large the pie is.

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104 msgkings March 7, 2017 at 12:59 pm

Only way to lower costs is to break the AMA and hit the doctors (and insurers) in the wallet. Easy for me to say, I’m not a doctor, but that’s a simple fact. Every dollar spent on healthcare is someone’s income.

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105 Sure March 7, 2017 at 1:46 pm

Let’s say you enslave the doctors and force us to work for free. You will save you under 10% of costs. Or put another way, you will get about three years of typical inflation before you are paying the same amount.

There are only a few cheap options in healthcare:
1. Start healthier – less drugs, alcohol, obesity, and sedentary lifestyles.
2. Let patients die.
3. Lower the paperwork burden.

Most everything else is dancing around the edges.

106 Hazel Meade March 7, 2017 at 2:25 pm

2 is actually “let patients pay their own bills and make their own choices” . In some cases maybe that means “death”. In others it means “maybe I don’t need to get a CAT scan just to make sure that my arthritis isn’t actually bone cancer”.

3. Will happen a lot if people move to HDHPs. Paying cash for services below the deductible will bypass a massive amount of paperwork.

107 msgkings March 7, 2017 at 2:31 pm

@Sure: again, lower costs = lower income for someone. Who’s it gonna be?

108 A Definite Beta Guy March 7, 2017 at 2:50 pm

“maybe I don’t need to get a CAT scan ” -You mean you want to kill grandma. Because that’s how it’s going to be interpreted, and it’s how politicians will spin it, in order to win more votes.

109 msgkings March 7, 2017 at 3:43 pm

@ADBG: Yeah, politicians like Sarah “Death panels” Palin. We need some way to ration.

110 HL March 7, 2017 at 4:51 pm

msgkings is right, if you want to take down healthcare costs to 10% of the economy like other developed countries ur gonna hurt hundreds of thousands of people and essentially gut the entire system. maybe it is worth it, I dunno, but any serious “health care savings” is going to affect many middle class jobs in one of the few growing sectors in the country. that the opportunity costs are rarely discussed shows how unserious the talking heads are.

111 Sure March 7, 2017 at 9:30 pm

The real problem is not the amount paid to individual healthcare workers (nurses, doctors, aids, etc.), but rather the proliferation of such. Right now the number of bodies needed to do things keeps increasing. Additionally, many of the newest warm bodies providing “healthcare” merely exist for compliance reasons. For instance, all of my coding is reviewed by one or more warm bodies; they ensure we all get paid, but they did not exist 10 years ago and they keep proliferating.

I certainly agree that people will make less money with cheaper healthcare, but the docs and AMA are at best a rounding error. Long before the doctor takes his cut, the vast majority of the money has been sucked out by the hospital bureaucracy, the med school bureaucracy, the compliance bureaucracy, and the insurance bureaucracies. Certainly the cheapest options I know of tend to be direct (cash) pay that are skating the edge of compliance laws. Even at cash pay practices, a huge amount of the overhead still goes to compliance.

As far as patient health goes, say you come in crashing with a subdermal hematoma. I will get you intubated, do a CT scan of your head, and jack your blood full of fun things to keep oxygen flowing an cranial pressure down. This is all chump change. I will then turn you over to surgery. They will decompress your head in an OR and then you get to enjoy a long and expensive recovery while we worry like heck that you will develop infections. This is an order of magnitude more expensive (at least), and is still basically chump change. What is actually expensive are the long term sequelae, like increased dementia, that do not show up for a decade or two. These chronic, terminal conditions burn huge amounts of money.

The better we are at fixing health problems that are relatively simple (e.g. everything health economists tend to love), the more patients we will have who live long enough to develop some hideously expensive chronic condition. The things we can treat now are almost invariably the cheap things, but without healthier patients there are so many other things they can “catch” it pretty much is assured to cost more if we let fewer of them die from things we can cheaply fix. For instance, we all celebrate the effectiveness of modern HIV treatments, but last I looked the CDC about doubled the lifetime costs of an HIV patient – they now live long enough to rack up bigger bills. The more effective your care is, the fewer patients who die young and avoid costly care as elderly patients.

Ultimately, the vast amount of money that is “wasted” in healthcare comes from two main sources: society is asking medical care to backstop societal changes (like obesity, decreased religiosity, social isolation, family care, etc.), to outsource political costs (e.g. EMTALA), or is actually succeeding and giving everyone more chances to rack up other bills.

112 Hazel Meade March 7, 2017 at 11:34 pm

Ultimately letting people make their own choices is the only solution because everything else is unsustainable and/or morally repugnant.

113 Hazel Meade March 7, 2017 at 11:42 pm

I mean face it, gramdma is GOING to die, sooner or later. We all are. How much of our resources do we want to burn through trying to deny this simple, universal truth? We’re all going to die. It’s not a matter of whether anyone dies, it’s a matter of when.

114 Hazel Meade March 7, 2017 at 1:08 pm

More broadly, there’s no way to wonk your way into lower costs on this.

Because price signals have NEVER been known to produce efficiencies and control costs.
How much defensive testing would be eliminated if it was coming in under the deductible on an individual policy? What do you think?

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115 A Definite Beta Guy March 7, 2017 at 2:42 pm

Analogy: economic growth prior to the industrial revolution doesn’t measurably increase living standards, it just increases the number of mouths to feed. Due to the fertility decision, it’s inevitability.

There’s a lot of different players and policies in the US healthcare system, and they ALL force healthcare dollars to be spent on marginal/negative healthcare uses. Eliminating employer health care subsidies just means more tax dollars that are going to be shoved right back into Leviathan in some other fashion. The only difference is that the health care dollars aren’t spent on marginal health care FOR ME, they are spent on marginal health care for Democratic constituents.

So, there’s no political reason for (R) to support this policy, unless they can drive those dollars to win over some of those constituents.

116 Hazel Meade March 7, 2017 at 11:18 pm

I do not understand this objection. Dollars not spent on marginal/negative healthcare uses are dollars you can spend on something else. It is not inevitable that those dollars will be spent on healthcare. The dollars we are speaking of are the dollars that middle-class people with employer-based policies would otherwise be getting in income. Right now they get a tax deduction in exchange for being forced to buy overly expensive insurance policies, but the deduction is still money you can’t spend on non-healthcare uses. If employees were free to purchase their own insurance policies they might well (probably WOULD) buy a less expensive insurance policy and spend the money on something else. That would mean more income for Republican constituents to spend on non-healthcare uses.

The problem is that a lot of people are idiots and they think that losing employer-provided health coverage would be a pay cut. They think the employer would not increase their salary in exchange for losing the benefit. Or they are even dumber and enjoy being forced to get paid in health insurance.

117 msgkings March 8, 2017 at 11:46 am

Hazel, what is the mechanism that guarantees employers raise wages to compensate for the lost benefit? Why don’t they just pocket it? Or keep a large portion of it?

118 Hazel Meade March 8, 2017 at 2:14 pm

@msgkinds, suppose that the employers didn’t raise salaries to compensate. What would happen? Well the first thing that happens is that suddenly, it is much cheaper to hire people. Labor costs have just dropped. If the price of something drops, people buy more of it. So employers go on a hiring spree. Now the labor market gets tighter. Wages go up. Ultimately, they will settle at some new equilibrium. But why would it be different than the old equilibrium? The cost of salary is just as deductible as the cost of health insurance, so it is just as cheap to pay people more by exactly the equivalent amount that the health insurance cost, and the number of workers in the labor market has not increased. Real demand for labor has not changed and real supply has not changed either so the equilibrium will settle at exactly the same price point.

119 Hazel Meade March 7, 2017 at 1:03 pm

Then the Republicans discovered that doing so would prompt employers to drop group health insurance, asting millions into the world of individual health insurance policies

THAT’S THE WHOLE POINT!

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120 efcdons March 7, 2017 at 12:22 pm

Magic! When people die from choosing the wrong options we will all get so much useful market information. Kenneth Arrow died for your sins.

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121 Cliff March 7, 2017 at 1:29 pm

How would people die exactly?

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122 efcdons March 7, 2017 at 2:28 pm

A market system means some people won’t get care or choose the wrong care and they will die.

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123 Hazel Meade March 7, 2017 at 11:36 pm

Nobody dies in a government run system, nobody!

124 Troll me March 7, 2017 at 12:50 pm

Sounds good theoretically, but even if it’s economically superior, the idea of having an explicit health insurance tax for what would be earmarked redistribution in health spending would make it “too easy” of a target to eliminate. People would look at that tax, see it for explicitly what it is, hate the tax, and ignore arguments about how it all adds up to something more efficient and maybe even offering better service delivery in the end.

Generally speaking though, for different reasons, I think that taxing and spending decisions should be made separately. If all sources of tax revenues are considered separately for their utiltiy, and same for expenditures, then it is more likely to have more efficiency over time. Whereas if you have too many bundles of earmarked spending from specified tax sources, it is much more complicated for many reasons to have efficiency. (Although … maybe given the legality of major influence of major money in US politics, possibly the opposite applies …).

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125 Hazel Meade March 7, 2017 at 1:13 pm

I don’t think so. People pay “uninsured motorist” taxes and fees on their car insurance. How’s this different?
The thing is if you unbundle taxes and expenditures, then you can’t explicitly tie a specific tax to a specific program. All taxes are just general revenue, and then the tax can be exploited to raise revenue because the rate isn’t linked to the actual expenses it is supposed to fund. I pay all sorts of fees on my phone bill that are allocated to things like rural phone service and maintainance of the telephone network. Those fees would be LESS tolerable (not more) if they were going into general revenue and weren’t tied to specific programs.

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126 Troll me March 7, 2017 at 2:43 pm

“then you can’t explicitly tie a specific tax to a specific program”

That’s precisely the point. Each program and tax should be considered on its own merits.

For your example, the optimal amount of taxes collected at the economy-wide level would not necessarily be the same as the optimal amount of spending for that purpose on the economy-wide level.

I’m usually averse to household-level examples for economy-wide issues, because they lead to dumb thinking. But here I think it’s a good example.

Imagine that you work one job for rent and another job for all costs associated with leisure and another job for all other stuff.

If you want to spend more money on leisure, you need to increase the income at that one job. And the same goes for all three situations.

It would be much better for you, a more efficienct use of time and better allocation of resources on average, if your spending deicisons were not tied to the specific income source, but if instead you could work towards this theoretical notion of 0 net utility, at the margin of an increase or decrease in each source of income and each area of spending.

Say, then, you get a raise at the job used to pay rent but no raise at the other two jobs. Is it better if you can only allocate this money to a more expensive rental or reduce your working hours to balance for the raise? Or is it better if you can allocate smoothly across all spending and income generation decisions?

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127 Hazel Meade March 7, 2017 at 3:38 pm

Imagine that you work one job for rent and another job for all costs associated with leisure and another job for all other stuff.

The government is supposed to provide services in return for all those taxes and not spend money on whatever it wants, just for fun. It’s not a person that should have the freedom to spend money on it’s personal priorities. It is supposed to be constrained by the taxpayers desires.
Imagine that you have one contract for Product A, and one contract for Product B, and another for service C. Do you get to charge Customer A extra because you feel like spending money on C? No, that would be illegal. You can only charge customer A what the contract permits. That provides A with accurate feedback about the cost of that product and allows them to decide if it is worth funding. The taxpayers should be in control, not the government.

128 Troll me March 8, 2017 at 11:47 pm

Maybe some meditation on the meaning of the lambda in 2nd year economics optimization problems?

Especially, considering that a non-market Soviet system could theoretically use the same lambda to reach the same efficiency.

This is the theoretical argument that the marginal costs and benefits of taxes should be equal across the entire system, rather than simpliy optimizing for marginal costs and benefits at the level of each specific tax/allocation decision.

129 Hazel Meade March 7, 2017 at 1:25 pm

Also, the tax/fee doesn’t have to go into government revenue at all. It could be a privately run insurance fund of some sort. It’s collected by the insurance company and goes into something like the health insurance equivalent of Fannie Mae. The government backstops it in the event of unusually high losses, but ultimately the fee is set at the rate that covers the expected losses.

I think the bigger worry is how to make the coverage shitty enough that nobody will want to rely on it. You don’t want too many free riders.

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130 Walsh March 7, 2017 at 4:30 pm

Forget it, Hazel, it’s Canada.

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131 mulp March 7, 2017 at 5:02 pm

“Theoretically, what should happen is that #2 will cause people to start paying for their own insurance.”

So, how many Africans pay for their own insurance?

There is no Obamacare, no NHS, no employer tax exempt health benefits, etc in any significant part of Africa, making it 98% free market health care.

Care to argue health care in Africa is fantastic? It is very low cost.

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132 Hazel Meade March 7, 2017 at 11:24 pm

People in African have other priorities. You do realize that resources are finite right? Spending money on health insurance means you can’t spend it on something else.
It’s just possible that people in Africa aren’t that concerned about living to be 80 at this point in time. They aren’t just morons who forgot to buy health insurance.
And who are you to decide that health care is what Africans ought to be spending their money on, anyway?

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133 Art Deco March 7, 2017 at 11:57 am

At the core of our problems I suspect is that first-dollar coverage of medical expenses is not sustainable absent administrative rationing, and you cannot sell either high deductibles or administrative rationing at this moment in time.

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134 msgkings March 7, 2017 at 1:00 pm

+1

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135 mulp March 7, 2017 at 5:09 pm

For the working poor during Bush-Cheney, there was no first dollar coverage, nor for 99% of middle class workers with employer benefits for that matter.

Can you offer contrary data to that of KFF to health care costs being sustainable and not going up?

KFF documents the increasing use of higher copays and deductibles and increasing deductibles based on your theory that requiring individuals to pay more of the first dollar costs of health care will stop health care cost increases..

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136 Ricardo March 7, 2017 at 6:54 pm

Again, the $6,300 deductibles on bronze plans for single people may not be considered “high” by you but most of your fellow citizens would disagree.

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137 A Black Man March 7, 2017 at 12:08 pm

There is no solution to health care. People get old, get sick and die. Some people take a long time to die after they get sick. If you want to provide the old, the sick and the poor with health care, it means taking money from those with money. How you take the money, how much you take and what limits you place on how much you spend on the sick is all that matters.

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138 The Anti-Gnostic March 7, 2017 at 12:18 pm

Therefore, we should turn loose market mechanisms to provide palliative care and lower costs like we do in other sectors. But unfortunately this is no longer politically tenable.

The rest of the industrialized world seems to muck along with some level of universal medical care so we can probably figure out something. But then I read about Canadians with their “universal” coverage who purchase supplemental coverage so they don’t die for lack of prompt diagnosis by their supposed “universal” coverage. Maybe that’s why they also carry huge levels of household debt. I don’t think there are any good answers.

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139 mulp March 7, 2017 at 5:21 pm

No, you are wrong. Canadian Medicare is almost identical to US Medicare in that it pays only 80% of medical bills except for those who can’t pay the 20%. Thus private insurance is brought, or provided, to pay some or all the costs not covered by Medicare. Details vary in Canada as Medicare is run and funded partially by the province, but both Canada and US Medicare started from the same basic details.

And you ignore how in the US, millions of people must wait years to get care.

For example, must wait to get high blood pressure or diabetes treatment until they have a stroke, hearth attack, diabetic shock, blindness, gangrene before they get extremely expensive medical care for free thanks to EMTALA. And then now unable to work, must wait two years to get SSDI so they can get government run and funded health care decades too late.

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140 Hazel Meade March 8, 2017 at 9:39 am

Nobody HAS to wait years to get diabetes treatment. They just have to pay for it themselves. Not being able to afford something is not equivalent to not even being able to get an appointment within 3 months.

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141 Some Guy March 7, 2017 at 6:58 pm

What people fail to understand is that government run health systems are designed to benefit the friends of government. Otherwise, what would be the point?

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142 Troll me March 7, 2017 at 12:53 pm

Some people put in a solid 50 years at low wages with an understanding that they would have access to a variety of basic medical services (especially emergency ones) in their old age.

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143 Some Guy March 7, 2017 at 6:56 pm

Some people buy lottery tickets every week expecting to hit it big.

What’s your point?

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144 Troll me March 8, 2017 at 11:50 pm

50 years working your backside into the ground with expectations of an OK pension in retirement is really quite a lot like buying a lottery ticket once a week and losing.

It’s kind of like how things that you expect to happen are logically similar to things that aren’t likely to happen.

These are the sorts of reasons that make me want to pat myself on the back for really high IQ. But don’t you fell like an ass for the deep insults to your fellow citizens who you thought would be persuaded by such an argument?

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145 Yancey Ward March 7, 2017 at 12:18 pm

This bill won’t pass the Senate and likely not pass in the House either. Whatever eventually passes, if anything, will be greatly different than what you see today.

I keep hoping we will figure out that insurance is for unexpected events, not routine ones, but we ain’t there yet.

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146 A Definite Beta Guy March 7, 2017 at 12:37 pm

I suspect this will never work without mandated government savings.

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147 mulp March 7, 2017 at 5:39 pm

So, there should be no health care insurance. Death is certain. Thus not unexpected.

Death comes from age, the body unable to cope with common activity, genetics, and viruses, bacteria, and parasites, all of which are expected.

The threat each of these expected events is known, thus none can be considered unexpected.

Ebola in humans is not unexpected and ebola spreading from indirect contact is expected, so you seem to argue that neither insurance or government should pay for preventing ebola in humans, it’s spread from human to human, and certainly not for treating ebola.

Ebola is in the context of health care and public health completely routine. It’s just the visible result of the routine is more, well, visible, with bleeding people laying on the ground dead. But people bleeding on the ground from gun shots is routine in America and other parts of the world, and conservatives argue absolutely nothing should be done to stop the gun shootings, or to pay for treating the bleeding so they don’t die. Death is routine, so delaying death should never be paid for.

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148 rayward March 7, 2017 at 12:19 pm

“A full six pages of the 60-plus page bill were devoted to lottery winnings. Lottery winnings! Essentially, the GOP bill’s big idea on this—to which it devoted nearly 10 percent of its attention—is figuring out ways to make sure lottery-winners on Medicaid can’t cheat the system. Seriously. The bill goes on and on and on to stipulate under which circumstances the state can declare you no longer in need of—nor entitled to—Medicaid.”

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149 efcdons March 7, 2017 at 12:24 pm

Well, obviously the most important thing is to ensure there isn’t one person who gets something they don’t deserve. It doesn’t matter how many innocent men go to jail as long as we prevent one guilty man from being free.

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150 Troll me March 7, 2017 at 12:58 pm

I don’t think it’s the way it quite goes through their heads, but basically, yeah, it kind of seems like that sometimes.

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151 Rich Berger March 7, 2017 at 12:48 pm

Isn’t amazing that a bill has been put out before it’s shoved down our throats? This is the start of a public debate which will lead to changes. It seems like there is sufficient Republican opposition to make 50 votes unreachable. Of course, if a consensus for passage cannot be reached, Obamacare can be left to die of its own misbegotten defects. I think Trump mentioned that possibility if no legislative action is taken. I think he was positioning himself to put the squeeze on the Congress. DNR for Obamacare and let nature take its course.

The Democrats have done all they could to impede the staffing of a new administration and Trump got almost all of his people in. Trump is also new to the legislative game, but he’s an old hand at negotiation. He’s a quick study, and he will figure this out very soon. He has a very intelligent man at HHS, Tom Price, who is well versed in health care and is an orthopedic surgeon. Stay tuned.

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152 byomtov March 7, 2017 at 1:17 pm

Roy writes,

The critical mistake of the AHCA is its insistence on flat, non-means-tested tax credits. The flat credit will price many poor and vulnerable people out of the health insurance market.

I doubt the GOP considers this a problem.

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153 Cooper March 7, 2017 at 2:17 pm

Is Obamacare a local maximum? It seems like any change in any direction will create millions of losers.

Nationalizing the entire health care system is an option but it will destroy trillions of dollars in private wealth, cost millions of jobs, disrupt the entire structure of health care provision, etc.

Moving to a purely private provision model with HSAs and mandatory insurance (perhaps akin to the Swiss model) would result in the loss of many government jobs, the privatization of lots of publicly owned medical infrastructure, huge swings in prices for various risk pools, potential gaps in coverage that would bankrupt some people, etc.

Either pole might work well but getting from here to there involves angering huge swaths of the electorate.

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154 Boonton March 7, 2017 at 3:21 pm

Obamacare’s insight, IMO, was to avoid an ideological decision to remake the healthcare system and instead simply ask how do you most effectively move people towards coverage?

For people working full time jobs that usually means employer provided insurance. For people near poverty with little income, that means Medicaid. For those who have income but are not working for someone who provides coverage, that would be buying a plan from a private company in the market.

The nifty thing about that system is you don’t have to do much. Old people on Medicare can simply stay on Medicare, those who get coverage from their boss can simply keep getting coverage. Just add some carrots and sticks for those not covered to move towards whatever coverage vehicle they are already closest too.

Ideological based reforms have the advantage of appearing simpler and cleaner but that disguises how deeply radical they would be. For example, a right wing scheme that would abolish the tax benefits of employer provided healthcare in favor of tax-favored savings accounts coupled with ‘consumer orientated’ direct purchase of health care would entail undoing coverage for nearly 100 million people, revamping the entire way healthcare billing is done AND possibly locking us into a pure ‘fee for service’ model when it seems ‘fee for management’ offers a more rational way to pay for care.

Put another way, NYC might have less traffic jams if you nuked it and then tried to rebuild the city more intelligently. But you could just as easily end up destroying the city and never getting it back.

Obamacare has the advantage of being a conservative position to play.

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155 Hazel Meade March 8, 2017 at 8:48 am

ObamaCare itself created millions of losers, so whatever.

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156 Boonton March 8, 2017 at 8:58 am

Millions of losers? Yea ok

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157 Hazel Meade March 8, 2017 at 9:42 am

This is widely acknowledged. Many people, the relatively young, relatively healthy, relatively rich, had their health policies canceled and/or saw substantial premium increases. When this happened supporters of the law universally said “So what? We knew there were going to be winners and losers.”

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158 Boonton March 8, 2017 at 11:57 am

Health care policies have always been written on a year by year basis and almost always have premium increases from year to year. The private health policy market also has policies that are frequently discontinued with new replacement policies launched (the half-life, I believe, was about two years). So while it is easy to blame all policy cancellations and increases a few years ago on obamacare, the reality is few if any of those policies would still be around in their past form (and certainly not their past premiums) had the ACA never passed and no changes made to the law.

For your focus of concern, the relatively young, rich and healthy who do not get employer provided coverage, it isn’t clear the ACA was a bad deal on balance when you consider the # covered to 26 yrs old on parents’ plans or the fact that exchange plans are allowed to charge more based on age and smoking status (something employer provided plans can’t do).

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