Friday assorted links

by on March 3, 2017 at 10:05 am in Uncategorized | Permalink

1 Ray Lopez March 3, 2017 at 10:10 am

#7 – Economists do it with models

2 Robert McGregor March 3, 2017 at 12:46 pm

#7–new condom tracks your speed and velocity

How about size–from the flaccid to the erect state, with the numbers and times put on a graph and in a data table? . . . . . And then it’s automatically posted to your Facebook.

Tyler Cowen claims he’s a generalist. He’s convincing me.

3 The Jackhammer March 3, 2017 at 3:32 pm

They don’t call me The Jackhammer for nothing.

4 Anonymous March 3, 2017 at 10:15 am

#7 I’d prefer my girl to nonverbally track my speed and velocity, if you see what I mean.

5 So Much For Subtlety March 3, 2017 at 10:51 am

I think this Big Data collection has gone far enough.

Although, of course, I always tell Google that my name is Ray.

6 Ignacio March 3, 2017 at 5:36 pm

Depending on the individual, it could be Big-Data, Slightly-Above- Average-Data (where-somehow most claim to be), Average-Data, or Small-Data (where almost no one claims to be).

7 GoneWithTheWind March 3, 2017 at 10:21 am

Should any goods and services be sold across state lines and why not? Surely someone’s ox will be gored. But yet we do sell across state lines and the right to do so is enshrined in the constitution. Considering the harm done by limiting the sale of health insurance across state lines it would appear that in allowing it the benefits will outweigh any possible imagined harm.

8 prior_test2 March 3, 2017 at 10:31 am

Wait, are we for or against centralized government regulation compared to federalism? This can get confusing, who knew health care could be so complicated

9 dan1111 March 3, 2017 at 10:45 am

Not very confusing: “interstate commerce” is a power specifically enumerated to the federal government in the Constitution. We are therefore for the government setting policy in that area, and against it setting policy in other areas where it doesn’t properly have authority.

10 dan1111 March 3, 2017 at 10:49 am

To put is slightly differently:

Conservatives are arguing in this instance that the federal government should use its clear constitutional authority to reduce the burden of regulation on the consumer.

This is not a “Ha ha, conservatives aren’t really small government!” moment.

11 prior_test2 March 3, 2017 at 11:25 am

That observation is based on the fact that insurance has always been state regulated – ‘The first insurance company in the United States underwrote fire insurance and was formed in Charleston, South Carolina, in 1735. In 1752, Benjamin Franklin helped form a mutual insurance company called the Philadelphia Contributionship, which is the nation’s oldest insurance carrier still in operation. Franklin’s company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses.

The first stock insurance company formed in the United States was the Insurance Company of North America in 1792. Massachusetts enacted the first state law requiring insurance companies to maintain adequate reserves in 1837. Formal regulation of the insurance industry began in earnest when the first state commissioner of insurance was appointed in New Hampshire in 1851. In 1869, the State of New York appointed its own commissioner of insurance and created a state insurance department to move towards more comprehensive regulation of insurance at the state level.’ https://en.wikipedia.org/wiki/Insurance_in_the_United_States

In other words, regulation at the state level is fully consistent with the Constitution, and has been for centuries. It is not considered a restraint of trade – much the same way that certain vehicle configurations are allowed in some states, but not others. ‘The US federal government, which only regulates the Interstate Highway System, does not set maximum length requirements (except on auto and boat transporters), only minimums. Tractors can pull two or three trailers if the combination is legal in that state.’ It is not a restraint of trade if the Commonwealth of Virginia does not allow a freight company based in California to use trucks with three trailers on its roads for local deliveries. ‘Roads other than the Interstates are regulated by the individual states, and laws vary widely. Maximum weight varies between 80,000 lb (36,000 kg) to 171,000 lb (78,000 kg), depending on the combination. Most states restrict operation of larger tandem trailer setups such as triple units, turnpike doubles and Rocky-Mountain doubles. Reasons for limiting the legal trailer configurations include both safety concerns and the impracticality of designing and constructing roads that can accommodate the larger wheelbase of these vehicles and the larger minimum turning radii associated with them. In general, these configurations are restricted to the Interstates.’ https://en.wikipedia.org/wiki/Semi-trailer_truck#North_America

Truly, this is not a gotcha – lots of things are regulated at the state level, and are not considered to be a restriction on interstate commerce, as the above example attempts to show (with the caveat that the interstates are sort of federally regulated, so to speak).

The same applies to state bar exams. Which seem relevant, as different states do have at least marginally different legal frameworks, in part due to historical reasons fully understood by the people who wrote the Constitution. Strangely, no one seems to be mentioning Article 10 here, in all its confusing text – ‘The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.’

Insurance regulation would seem to fall pretty well under that aspect of the Constitution.

12 Bob from Ohio March 3, 2017 at 2:42 pm

“regulation at the state level is fully consistent with the Constitution,”

States can and do regulate insurance [and many other things] but the federal government can preempt the states if it is acting under one of the federal enumerated powers. Regulation of interstate commerce is such an enumerated power but the US government has to date not preempted most state regulation of insurance, even though it could.

The McCarran-Ferguson Act of 1945 permits the states to regulate insurance without most federal interference because the federal government disclaimed its right of preemption.

13 Anon7 March 3, 2017 at 6:23 pm

Perhaps prior should become familiar with those shiny new SCOTUS cases Gibbons v. Ogden (1824) & United States v. South-Eastern Underwriters Association (1944). Since prior seems to think that wikipedia is the fountain of all reliable and accessible knowledge, let’s cite it for the latter case: “United States v. South-Eastern Underwriters Association, 322 U.S. 533 (1944), is a United States Supreme Court case in which the Court held that the Sherman Act, the federal antitrust statute, applied to insurance. To reach this decision, the Court held that insurance could be regulated by the United States Congress under the Commerce Clause, overturning Paul v. Virginia. Congress responded by enacting the McCarran-Ferguson Act of 1945 which limited antitrust laws’ applicability to the business and assured state authority would continue over insurance.” https://en.wikipedia.org/wiki/United_States_v._South-Eastern_Underwriters_Ass%27n

So there is no question that federal authority applies to the insurance industry and note that federal authority over insurance was applied in the earliest instance in the context of anti-trust or restraint of trade. The limitation of federal authority over the insurance industry is thus entirely discretionary, not mandatory. Encouraging greater competition is perfectly consistent with longstanding constitutional precedent.

14 prior_test2 March 4, 2017 at 1:40 am

‘Since prior seems to think that wikipedia is the fountain of all reliable and accessible knowledge’

No, I think that wikipedia links always work here, as a number of sources don’t (the New Yorker being a truly notable example from the past). There are more filters here than first meets the eye. The way to know that such a filter is being used is that after posting, the information simply does not appear, while by reposting, you get the ‘duplicate comment’ message. However, due to the duplicate comment aspect, you have to slightly rework whatever was written, remove a link, then post. With three links, this can be a bit of effort. (And no cries of censorship from me on this. The web site owners have every right to filter what they want, for whatever reason. Though in the New Yorker case, it was certainly possible that the years long filtering was likely due to reporting from around 2009-2010 by Jane Mayer. This web site has a purpose, after all, and such horribly biased facts from a reporter impedes it.)

‘So there is no question that federal authority applies’

To everything that the federal government wishes to apply it to, as long as the Supreme Court goes along (like locking up American citizens in internment camps). I decided to avoid that entire can of worms, which was decided in 1865. One hopes there is no need to link to wikipedia about that event.

‘Encouraging greater competition is perfectly consistent with longstanding constitutional precedent.’

Which leads me back to my original question, actually – ‘Wait, are we for or against centralized government regulation compared to federalism?’

15 Anon7 March 4, 2017 at 1:05 pm

The Germans have been far more efficient in locking up people in internment camps (yet another reason why Germany is so much better than the U.S.).

Preventing excessive protectionism (and interference with contracts) by the states was clearly a goal of the Constitution and thus federalism should be seen in that light notwithstanding the 10A, which was added as a redundancy to reinforce the idea of delegated powers. So even an originalist understanding of federalism will not fall into your simplistic dichotomy and favor the states on this issue.

16 Floccina March 3, 2017 at 1:17 pm

Some things are best done at the local, others the state and some at the Federal level. It seems to me though that paying at the Federal level and regulating at the state level can create some bad incentives.

17 Troll me March 3, 2017 at 4:20 pm

It can be useful to separate between a) what you want and b) what tools you mean yo use to get there.

18 Hal March 3, 2017 at 10:40 am

…what was the purpose of the “Commerce Clause” in US Constitution ?

19 The Other Jim March 3, 2017 at 10:52 am

Preventing trade barriers between states.

Which is exactly what this is.

20 prior_test2 March 3, 2017 at 11:43 am

Or not, as noted by the text of Article 10 of the Constitution (see above)

21 Anon7 March 3, 2017 at 6:39 pm

Or not-not (see above).

22 prior_test2 March 4, 2017 at 1:44 am

Yep, see the answer to the answer above, but I will take the chance, after all this discussion, to again ask my still apparently unanswered original question – ‘Wait, are we for or against centralized government regulation compared to federalism?’

23 Daniel Weber March 3, 2017 at 12:21 pm

A California manufacturer of widgets can sell widgets in Colorado, but they have to comply with Colorado’s laws on how you sell widgets.

I strongly disagree with the article that the state-level mandates are somehow stopping cherry picking. State-level mandates become pork-barrel projects, where the chiropractic association can lobby that all insurance plans must cover chiropractic, because why not? Plus PPACA got rid of cherry picking.

That said, I agree with the tone of the article that selling across state lines is usually a nonsense idea, when you can even get its proponents to agree on what it means.

24 dan1111 March 3, 2017 at 1:23 pm

However, a Coloradoan can go to California and buy a widget that doesn’t comply with Colorado law. There might be some Colorado law they are subject to if they bring it to Colorado, but they could just use it in California and other states.

Insurance is not a widget, and this gets complicated. If I live in state A and buy insurance in state B, why should state A get to regulate the product? Simply because I reside there? Or based on the fact that the insurance happens to reimburse Health care providers there? But my insurance might cover services in multiple states. I might routinely get service in a different state than my residence, if I live near a border.

Once you get into the details, I don’t find it to be so simple and obvious.

25 Daniel Weber March 3, 2017 at 1:33 pm

I guess if I live in Charlotte, North Carolina and want to drive a half-hour across the border to South Carolina for all my health care, sure, okay, I guess. Yeah, I should be allowed to get a South Carolina insurance policy. I don’t really think this is what the proponents of “sell across state lines” had in mind, though.

26 JWatts March 3, 2017 at 3:07 pm

The company I work for operates primarily in 3 states. We would prefer to purchase health insurance from one company, instead we purchase it from 3 different companies, all of which are Blue Cross Blue Shield affiliates. Indeed, in our case, BCBS is the only organization that could affordably provide insurance in all three states. However, they weren’t the cheapest in all 3 states.

27 Scott Mauldin March 3, 2017 at 4:43 pm

“A California manufacturer of widgets can sell widgets in Colorado, but they have to comply with Colorado’s laws on how you sell widgets.”

Unless the law is concocted to unduly exclude California Widgets. For example a Colorado law could not say “any widgets made in colorado must employ Colorado workers or be made with Colorado widget-ore”

28 mulp March 3, 2017 at 1:42 pm

Disputes over contracts, ie, insurance policies, between parties in different States must be handled in Federal Court – that preemption of State law and government is in the Connstitution.

Thus, selling health insurance across State lines to preempt State law thrusts insurance into Federal law.

If no Federal law specifically addresses insurance, Federal courts will apply contract law if written by Congress, or the vast body of common law going back to English law circa 1776 found in Federal, State, British case law precedent.

Note that Obamacare incorporates employer health benefits covered by ERISA which preempts State law for all employers considered Interstate and thus subject to Federal law.

Why isn’t Trump, and conservatives, calling for the repeal of ERISA to return power to the States?

Corporations like Walmart will locate it’s stores in the States with the least cost employee benefits and sell across State lines. Ie, instead of having stores on the coasts, all its stores will be in Alabama. Otherwise, Walmart would be faced with more than 50 sets of employment law covering benefits, safety, etc, instead of being covered by Federal law like ERISA, OSHA, etc.

29 Albert March 3, 2017 at 1:57 pm

I don’t get why anyone thinks that’s a significantly good policy. Even if it’s not a bad thing, it doesn’t change much — if there were some state that had great insurance at a reasonable cost, the other states would just adopt that state’s regulations. The reason health care is a problem is that it sucks, across the board, in every state. I don’t want 50 more identically bad plans to choose from.

30 Bernard Guerrero March 3, 2017 at 3:03 pm

” if there were some state that had great insurance at a reasonable cost, the other states would just adopt that state’s regulations.”

No, that statement denies the reality of regulatory capture and vested interests.

31 Matthew Powell March 3, 2017 at 4:51 pm

I understand this is the phrasing conservatives use to sell the policy, but I am now coming to realize that the true believers may actually think this is the right way to think about state insurance regulations. Surely you understand that a corporation can sell an insurance policy in any state regardless of where they are headquartered, where the money is coming from or where the actuaries are right? Just because you can’t sell insurance policies that don’t follow a state’s regulations, doesn’t mean you can’t ‘sell across state lines’. I can see where regulations could start getting hyper specific such that there is a gray area between what it means to regulate the quality/type of product sold in your state vs simply restricting trade, but I have a pretty hard time seeing how anyone could really believe state insurance policy approaches this boundary.

32 JWatts March 3, 2017 at 5:45 pm

“I understand this is the phrasing conservatives use to sell the policy, but I am now coming to realize that the true believers may actually think this is the right way to think about state insurance regulations.”

What are you talking about? You can’t legally sell insurance policies to people in a different state. IE Blue Cross Blue Shield is actually scores of different companies, each licensed in a different state.

33 rayward March 3, 2017 at 10:24 am

6. Russ Roberts for president (of the AEA)! A good economist is someone well-versed in theory who has both good judgment and good instincts (i.e., intuition). A bad economist is someone well-versed in theory who has both poor judgment and poor instincts. The problem is that policy makers are just as likely to listen to the bad economist as the good economist; indeed, more likely to listen to the bad economist because the bad economist is more committed to providing the consistently bad advice that the policy maker wants to hear. There’s no shame for the bad economist because he has so many friends.

34 Hal March 3, 2017 at 10:48 am

@RussRoberts: “What I am saying in this essay is that… we {economists} are notoriously unreliable at the things the world really cares about… Most economics claims are really not verifiable or replicable…”

Amen

35 Alain March 3, 2017 at 11:21 am

That article was truly excellent.

36 dearieme March 3, 2017 at 11:14 am

“Humility may be scarce, but most serious academic economists don’t believe in the absolute reliability of their results.” Unless, of course, they were pontificating about the People’s Plebiscite on Brexit, where a Leave vote would promptly be followed by my hair falling out, my todger shrinking, the crops in my garden rotting, and plagues of frogs, …..

37 gab March 3, 2017 at 12:53 pm

“…my todger shrinking…” Pretty soon there’ll be a condom designed to check that…

38 Harun March 3, 2017 at 6:26 pm

todger status: fully erect.

39 Troll me March 3, 2017 at 4:25 pm

Most often, they will listen to the econmist who gives them the answer they want to hear. Ideally, with two or maybe three simple options max.

40 not a physicist March 3, 2017 at 10:25 am

Both speed and velocity? Are they different?

41 The Other Jim March 3, 2017 at 10:31 am

I can tell you’re not a physicist, or else you’d know the difference. Velocity is speed in a particular direction. If you turn a corner without slowing down, your velocity has changed, but your speed has not.

I don’t see anyone doing that with their Johnson, however, so in this case you can consider them effectively equivalent.

42 A Black Man March 3, 2017 at 10:41 am

Given the subject matter, I would interpret speed to be the time between initiation and climax, while velocity would measure enthusiasm. Then again, the idea is so stupid it could mean anything or nothing.

43 The Other Jim March 3, 2017 at 10:50 am

Perhaps they meant “frequency” as in “repetitions per minute.”

44 A Black Man March 3, 2017 at 11:09 am

I followed the links to the source:

The i.Con Smart Condom, which markets itself as the “world’s first smart condom,” is actually a ring that fits over a boring, dumb condom and claims to track the exercise of your man bits, as well as detect chlamydia and syphilis.

The ring, first announced last July, is currently available for preorder on British Condoms for £59.99 (about $74, AU$97) with an unknown release date. But you can’t actually put a ring on it yet — the company says it won’t take your money until the product has a firm release.

In short, the i.Con ring promises to answer every burning question you’ve ever had about your sex session. Don’t worry, it will pair with an app for all your data visualization needs.

According to the preorder page, the ring will answer questions such as:

What’s my thrust velocity?
How fast are my thrusts?
How many calories did that sesh just burn?
How many times did I just have sex?
What’s the average skin temperature of my… eggplant?
What’s my girth?
How many different positions did I just conquer?
Plus, it aims to answer that age-old question: How do I stack up at sex to everyone else around the world? Because sure, let’s gamify sex. What could go wrong?

45 Hal March 3, 2017 at 10:55 am

“All Thrust, No Vector ! ” (derisive term in Fighter Pilot slang)

46 Andrew M March 3, 2017 at 10:26 am

#1 – Health plans aren’t “insurance”. I wish people would stop using that word.

The arguments against cross-border sales are terrible. I can’t think of any other sector where we expect one group of consumers to cross-subsidise another, then enforce it by erecting barriers to trade. If we must force the healthy to subsidise the sick, let’s make it explicit. Don’t disguise it by imposing regulatory hurdles.

47 A Black Man March 3, 2017 at 10:49 am

You’re right and I share your sentiment, but there is a reason economists pollute the language like this. They don’t want to address the basic questions regarding health care in a modern society. Those questions are a) How do we pay for the poor and old?, b) What’s the limit? and c) how to we say “no more” when the limit is reached?

No plan or proposal is serious or honest if it does not forthrightly answer those basic questions upfront. The trouble is, no one has the balls to answer B and no one can answer C, so the economists spend their days spinning yarns about how answering A makes B and C moot.

48 Troy P. March 3, 2017 at 12:08 pm

The UK has addressed questions A, B, and C – the result is a widely unpopular national health system.

49 mulp March 3, 2017 at 1:55 pm

Except the UK system which is getting worse by adopting ideas from American health industry and American free lunch conservatives, is far more popular than anything the US has had since WWII.

Yeah, I get that as long as you benefit from the jack boot Federal control over health benefits under ERISA you like your US benefits better than what was offered in the UK, but at the point you become disabled and thus can’t work and thus can’t get access to the jack boot Federal ERISA dictated health benefits and you must now beg for doctors to see you because you have little money and no insurance, you would love to have the superior UK health system which would treat you worse than it did in 2000 because of American market reforms to NHS.

But hey, if you become disabled and can’t work, you cease to exist based on your conservative views. If you existed, you would see the denial of access to doctors as wait times of years that are years longer than the waits in the UK or Canada for the same cases of health needs where you are not bleeding all over the floor.

50 dearieme March 3, 2017 at 3:04 pm

“because of American market reforms to NHS”: what do you have in mind?

51 Floccina March 3, 2017 at 1:24 pm

+1

52 Bernard Guerrero March 3, 2017 at 3:06 pm

+1

53 albatross March 3, 2017 at 4:36 pm

+1

Especially that “what’s the limit/how do we say ‘no more’?” bit. That’s the part that’s hard, because anything you do to limit even futile or counterproductive medical spending makes you susceptible to attack, as with Palin’s use of the term “death panels” to attack Obamacare.

In some sense, we will end up leaving lots of people completely uninsured, because that’s easier politically than covering everyone but limiting what they can get. This is somehow tied up with this common error in thinking about morals I’ve seen called The Copenhagen Interpretation of Ethics, where simply by interacting with some situation, people feel like you’ve somehow become responsible for it.

Leaving a bunch of poor people with no medical coverage? Fine.

Giving a bunch of poor people medical coverage, but with a limit on expensive treatments? What’re you, some kinda Nazi?

54 Alain March 3, 2017 at 11:01 am

I went through his archives. Bob laszewski is pretty even handed. He didn’t think that Obama care would bend the cost curve, and he opposed the bill, slightly.

However he wasn’t forcefully clear in any of his posts, and that does show a lean in his politics. The ACA was a bill about access and not costs. It was marketed to the public as a bill about costs since that polled well and access polled tremendously badly. the ACA was simply a new, very large, entitlement program. The administration knew that once an entitlement is created it is very hard to repeal due to concentrated benefits.

They were shocking disingenuous with the American public and the media did not hold them to account one iota.

We should have investigations.

55 Floccina March 3, 2017 at 1:26 pm

+1 Just like SS and Medicare. SS was partly sold as a jobs program.

56 mulp March 3, 2017 at 2:38 pm

Are suggesting you will hire more people in your food or housing business to serve old and disabled people with no income who are homeless in front of your property and begging from your customers?

A business needs paying customers, and SS and Medicare and Obamacare increases the number of paying customers. Obamacare in Kentucky diverted a dozen hospitals away from bankruptcy and pays for tens of thousands of workers.

I know conservatives since 1980 believe in free lunches: by firing costly worker, and cutting the pay of costly workers, cost cutting will increase consumer spending because workers are never consumers, and consumers are never workers, and consumers spend money they create based on the growth in wealth of capitalists, who likewise are never consumers or workers.

Ie, since 1980, free lunch economics is no longer zero sum. Consumer spending can be many times higher to than worker costs aka incomes.

Eliminate SS, etc, and the old and disabled will either spend twice as much as their benefit would have been, or the 70 year old woman will become a 22 year old man working as a migrant worker picking 10 tons of crop each day at $2 a hundred weight, and then making $1200 a month payments on a new F-150.

(I understand why economists find physics so alien – we physicists are so zero sum, never accepting something from nothing.)

57 mulp March 3, 2017 at 2:11 pm

Why didn’t employer health benefit costs double in the 8 years of Obama like they doubled in the 8 years of Bush-Cheney?

The individual insurance market was so fragmented with nothing that be considered a commodity to collect price statistics on, so the benchmark of KFF employer health benefits collected since 1998 are the best proxy for US health benefit costs.

They show a 100% increase from 2000-1 to 2008-9, and as 50% increase since 2008.

To argue that providers were not shifting costs of the uninsured and uninsured to those covered by group insurance would be naive. How else would providers address the costs of hard and soft mandates to provide medical care to everyone regardless of ability to pay

And the Federal bailout of hospitals driven toward bankruptcy by EMTALA (signed by Reagan to dodge the need for universal healthcare) was way under funded and mandated massive cost overhead in aggressive bill collecting from the poor of bills exceeding their annual income. Note that the cost of bill collecting is an administrative cost that group insurers must pay, along with the write offs of unpaid debt not covered by a Federal bailout. (CMS payments for uncompensated care is a Federal bailout of health care market providers.)

58 JWatts March 3, 2017 at 3:43 pm

“Why didn’t employer health benefit costs double in the 8 years of Obama like they doubled in the 8 years of Bush-Cheney?”

Because of a sluggish economy.

“A 2013 analysis by KFF said that “much of the decline in health spending growth in recent years was fully expected given what was happening more broadly in the economy.” And CMS’ experts said in 2014 that the ACA had had a “minimal impact.””

59 Steve J March 3, 2017 at 11:18 am

“If we must force the healthy to subsidise the sick, let’s make it explicit”

Not sure what you mean. It is explicit already. 3% of all earned income goes to Medicare.

60 kevin March 3, 2017 at 12:21 pm

that’s subsidizing the old, not the sick. Sure some people fall into both groups

61 Steve J March 3, 2017 at 5:01 pm

I think you are confusing Social Security with Medicare. Maybe these programs are not explicit enough.

62 Gil March 3, 2017 at 12:03 pm

I don’t know if health plans are insurance or not, but the american public sure doesn’t understand them.

Fire insurance for your house is easy for everyone to understand. You pay the premiums; your house almost never burns down. If your house does burn down, you get more money than you ever paid in to build a new house. It is protection against risk. You expect to lose money in the same way that any rational gambler at a casino expects to lose money.

With fire insurance, we fully expect one group of consumers (those whose houses don’t burn) to cross-subsidise another (those whose houses do burn). That is really the whole point of fire insurance.

Health insurance does have this aspect to it. You don’t expect to get a rare disease that costs $500k to treat, but if you have “health insurance”, it will pay. Just like fire insurance, you expect to lose money and in return you get protection from risk.

But most americans want a lot more than protection from risk from their health plan. This makes everything quite confusing. Protection from risk gets conflated with routine maintenance.

I am ok with allowing sales of insurance across state lines as long as there are reasonable standards for what qualifies as health insurance, otherwise it is just a race to the bottom. Maybe folks like the race to the bottom on libertarian principles. Why regulate insurance at all? There are arguments on either side, but suffice to say all states do regulate insurance, so allowing me to buy insurance under the regulations of some other state is a bit like me paying my state taxes under the tax regulations of some other state.

63 Daniel Weber March 3, 2017 at 12:26 pm

I’m skeptical of claims to sell insurance across state lines, but why would it be a race to the bottom? Couldn’t consumers demand to be covered by policies in consumer-friendly states? Couldn’t insurers from those states use the fact that they are well-regulated (assuming arguendo that the regulations are good) to get more customers?

64 Harun March 3, 2017 at 6:40 pm

Keep in mind that progressives told me that Kaiser Permanente policies in California that were cancelled were “junk policies.”

Kaiser is pretty prestigious non-profit, and they are regulated by California’s insurance commissioner.

So, the progressives are saying Democrats in California’s government couldn’t regulate well, but Obama could.

65 Hazel Meade March 3, 2017 at 12:55 pm

Most Americans get health insurance that is paid for by someone else, so they expect health insurance to be a system for extracting freebees from other people’s wallets, such as coverage for gym memberships and birth control pills, for example.

If people paid for their own insurance, you can bet their priorities about what insurance is “for” would very rapidly adjust.

The Republicans have recently proposed eliminating the tax deduction that incentivizes people to get their health insurance from their employer, and you have no idea how much of a snit that puts some people in. They honestly think that that insurance is “free”, and refuse to entertain the notion that their salary would be higher if their employer wasn’t paying for their health plan. Or maybe they realize that the gravy train they think they are on will evaporate if they actually face real financial incentives to not get coverage for gym memberships and birth control. People are really attached to their system for getting free shit out of other people’s wallets.

66 Floccina March 3, 2017 at 1:34 pm

+1 another great comment and chance to show my preferred scheme: http://un-thought.blogspot.com/2009/09/healthcare-compromise.html

This is a compromise between advocates of government provided health insurance and those against:
The state would provide insurance to all Americans but the annual deductible would be equal to the family’s trailing year adjusted income minus the poverty line income (say $25,000 for a family of 4) + $300. So a family of 4 with a trailing year adjusted income of $30,000 would have a deductible of $5,300. A family of 4 with a trailing year adjusted income of $80,000 would have a deductible of $55,300. Middle class and rich people could fill the gap with private supplemental insurance but this should be full taxed. This would encourage the middle class and rich, who are generally capable people, to demand prices from medical providers and might force down costs. They could opt to pay for most health-care out of pocket while the poor often less capable would be protected.
It is not a perfect plan but it might help. Some deregulation of health-care would also help the poor gain access. The gauntlet that Doctors have to run these days to get to practice seems like an anachronism in today’s world. Let smart people get to practice medicine after on the job training. Let the medical businesses decide who is qualified to practice medicine. 12 years of training to tell if my child has an ear infection is overkill and reduces access to health-care for the poor.
Another benefit of my plan is that it would encourage capable Americans (the rich and middle class) to be a counter weight politically against the providers.

Here is an article that makes a strong case for a system similar to the one that I propose. His plan suggests a insurance for catastrophic events that cost more than, $50,000 combined with a large health savings account.

67 kevin March 3, 2017 at 3:21 pm

What you call freebees are often times investments. Your yearly check up is expected to net save money (since it will find a problem when it is much cheaper to treat). I’m not sure whether gym memberships or birth control on net save money or not. Gym, probably not–though they also aren’t usually covered, birth control almost certainly is. My wife and I (with no kids) are much cheaper for our insurer and we pay the same family rate as someone with 5 kids.

Whether these investements should be covered by the insurer or the individual is interesting. It is important to acknowledge though, since they make an insurer’s cost go down it would be the insurer getting the free ride off the individual if you made the individual pay.

68 msgkings March 3, 2017 at 4:52 pm

Indeed, this is why most insurers are more than happy to cover vasectomies.

69 JWatts March 3, 2017 at 5:59 pm

“My wife and I (with no kids) are much cheaper for our insurer and we pay the same family rate as someone with 5 kids.”

That’s almost certainly not true.

70 Harun March 3, 2017 at 6:46 pm

Kids are almost free. Try to price insurance with and without kids. Kids are cheap.

71 Daniel Weber March 6, 2017 at 11:17 am

Your yearly check up is expected to net save money

This is nonsense. Health care economists have been studying this one for a long time. The annual check-up improves neither outcomes nor saves money.

72 A Definite Beta Guy March 3, 2017 at 5:54 pm

Roflmao, if you want to tax my health insurance, go ahead and do it. But don’t lie to me and say it’s going to come back as dollars in my pocket. It’s going straight to expand access to “needy” people. If you wanted it to come back to me, you’d just lower the income tax rate and make the overall amount revenue-neutral.

Of course, it’s actually going to go towards Obama-care. And if we’re wasting dollars on pointless healthcare, it should at least be pointless healthcare for me, not pointless healthcare for “the needy.”

73 Ricardo March 3, 2017 at 1:22 pm

“Health plans aren’t insurance” is the sort of meme that is immediately discredited once you or anyone in your circle gets something as simple and treatable as appendicitis and looks at what the retail price of all the services rendered is. Chronic conditions, cancer, and injuries that require surgery and physical therapy can cost tens or hundreds of thousands of dollars to treat.

74 kevin March 3, 2017 at 3:28 pm

They’re partially insurance. If you draw a venn diagram with insurance and not insurance, “health insurance” encompasses parts of both.

75 Thomas March 3, 2017 at 3:31 pm

“”Oil changes aren’t auto insurance” is a meme that is immediately discredited once you or someone you know gets t-boned”

Won’t someone please think of the children?

76 Ricardo March 3, 2017 at 7:44 pm

This is a totally failed attempt at argument by analogy. Try again.

77 Troll me March 3, 2017 at 4:29 pm

Insurance: “a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.”

If you don’t like the word “insurance”, how would you rather call it?

Also, I’m curious if it’s the existence of mandates that lead you to consider it as “not insurnace”? If so … by similar logic, I could argue that a mandate for renters to have insurance is not in fact insurance, for the fact of having a mandate. Or … what?

78 prior_test2 March 3, 2017 at 10:28 am

The name says it all – the i.Con ring

Well, maybe not all, but it certainly gives a solid feel for the dimension involved. Particularly as condoms are extra, according to the article.

79 rayward March 3, 2017 at 10:31 am

1. If immobility (complacency) is a big problem, then we should not allow health insurance to be sold across state lines. That way if someone in, say, Texas, wants a policy with more state mandates she must move to, say, New York. If insurers can sell across state lines, nobody will move.

80 kevin March 3, 2017 at 3:23 pm

doesnt that just incentivize someone in NY to not move to texas even if they found a better job there?

81 jim jones March 3, 2017 at 10:57 am

No adverts for The Complacent Class today?

82 spencer March 3, 2017 at 10:57 am

Six states did pass laws allowing insurance companies from other states to sell health policies in their states.

They failed to attract a single out of state firm to start selling policies in their states.

http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2012/rwjf401409

83 So Much For Subtlety March 3, 2017 at 11:05 am

Which suggests a cartel and market collusion to me. Do they have secret non-compete agreements? If only someone at the DoJ was interested in more than pushing racial grievances.

84 derek March 3, 2017 at 11:07 am

The competition won’t come from price from insurers. They have to price to the regulatory framework in the state. And yes that is a very nice legal way to maintain a monopoly. The competition will come from the voters wondering why the useless to them mandates are costing them so much money.

85 Troll me March 3, 2017 at 4:35 pm

Consider auto insurance, where there is price competition despite regulation. Less price transparency and competition than most people would like, but there is still a degree of price competititon.

86 Thiago Ribeiro March 3, 2017 at 11:20 am

How can one know? If they exist, they are secret!

87 Boonton March 3, 2017 at 4:36 pm

Collusion or locality? If you are selling insurance in one state you have networks of doctors and hospitals with contracts negotiated allowing you to charge competitive premiums. What good is that in another state?

Imagine Alaska lets NY insurance companies sell policies in Alaska. I’m sure NY insurance company would be happy to cover their network of doctors and hospitals in NY for Alaskans travelling out there but what are they going to do about the market in Alaska?

88 SPENCER March 3, 2017 at 4:38 pm

As was typical, the politicians and others had no idea was involved in entering a new market and how complex it was.

I find it interesting that so many business people are willing to accept overly simplistic splutions in other industries while they are quite ready to tell you why it will not work in their industry where they appreciate the difficulties involved.

89 rayward March 3, 2017 at 10:58 am

3. Boy, is this a dilemma. I’ve resisted the temptation of buying one of these for many of the reasons stated in the article – the article focuses on the effects on children, but the effects on adults can be the same. If Google makes us stupid, then one of these makes us really, really stupid. Why think, why remember, if Alexa will do it for you. How many square feet in an acre? I remember because I worked for a civil engineer while in college. Over 45 years ago. Back then we actually did geometry, using sine, cosine, tangent, etc. and a simple “adding machine” (with dozens of keys and a manual crank on the side), to determine distances, angles, etc. I was hired to work in the “field”, but the engineer put me in the office when he learned I had taken geometry and trig. Today, computers do it all. Do the computers make us stupid? Does Alexa? [I actually used a slide rule. Does anybody today even know what a slide rule is?]

90 The Other Jim March 3, 2017 at 11:10 am

>Does anybody today even know what a slide rule is?

No, but they can just Google it.

91 byomtov March 4, 2017 at 5:26 pm

Sure. It’s a device that tells you two times two is 3.99.

92 Mike W March 3, 2017 at 11:29 am

“Does anybody today even know what a slide rule is?”

Or a buggy whip?

93 Thiago Ribeiro March 3, 2017 at 11:55 am

My father used to use a slide rule when he was an engineer student. Isaac Asimov wrote a book teaching how to use them.

94 bruce March 3, 2017 at 1:03 pm

Don’t know what a slide rule is for
But I do know one and one is two

95 dearieme March 3, 2017 at 3:09 pm

Ah, but how many beans make five?

96 Thiago Ribeiro March 3, 2017 at 4:11 pm

I knew this one with rice grains.

97 byomtov March 4, 2017 at 5:25 pm

What do you know about history?

98 dux.ie March 3, 2017 at 7:27 pm

“Slide Disk” is more interesting. It never goes out of range.

99 derek March 3, 2017 at 11:05 am

3. One of the first things that I have to train the young men I deal with is that the answer isn’t out there, it is where you are standing and in your head. You had better start filling that head with an understanding of how things work and why, so that you can build the intuition that will serve you very well. That takes years and lots of confusion.

These tools are very handy, and as any tool can assist you to do what you want faster and better. But never trust the tool. Never trust the instrument. It is one point of data, verify with others. It is amazing how hard it is to get the technicians to do this. The instrument or Google says. Fine. What is your second data point to prove the first?

This isn’t new, we are profoundly lazy and want an easy pattern to recognize. Best not to encourage those lazy habits, they will last your whole life.

100 Troll me March 3, 2017 at 4:39 pm

The provider of “the instrument” wants to earn your trust to the extent that it gets them what they want. E.g., if Google finds you what you’re looking for 90% of the time, will you notice on the other occasions when profit motive (and not your interest) drives the results?

Even if correct 90 or 99.9% of the time, the other 10% or 0.1% can be the most critical times, the times when correct information is most relevant.

101 Harun March 3, 2017 at 6:50 pm

Google maps didn’t work once. I noticed. Was late for a business meeting.

Started using mapquest and sometimes Google Earth.

102 Alain March 3, 2017 at 11:12 am

#4 is very good.

103 JWatts March 3, 2017 at 11:16 am

“Basically new competition with narrow mandate plans can pick apart the previous pooling equilibrium.”

The whole point to competition is to pick apart the previous equilibrium. And yes, it’s often destructive to the firms that loose the protection.

104 Steve J March 3, 2017 at 11:24 am

Who is the firm losing protection? The insurance company? I am not under the impression that the health insurance companies are raking us for huge profits but maybe I am wrong.

105 JWatts March 3, 2017 at 3:48 pm

“I am not under the impression that the health insurance companies are raking us for huge profits but maybe I am wrong.”

Even companies that don’t normally turn a profit can cut costs if they have to. This is less about specific profit margins and more about sclerotic business practices.

106 Dain March 3, 2017 at 11:23 am

Truism from from Yahoo Finance chat, “Even our most dynamic sectors in information technology, like Amazon and Netflix, are about staying at home…”

107 Jeff R March 3, 2017 at 1:44 pm

Uber and Yelp?

108 Troll me March 3, 2017 at 4:45 pm

Such things as saying hello to the neighbours (let alone asking for some sugar or oil after grocery hours) will become increasingly foreign.

I wonder if Netflix and Amazon have any interest to promote consideration of such issues, or if it will fall upon others.

Imagine the Orwellian potential when no one is ever exchanging openly with neighbours (etc.) about basic stuff. Everything filtered through social media inputs and other filters influencing what is discussed or thought about.

109 Thiago Ribeiro March 3, 2017 at 11:58 am

#7 In this case, what is the difference between speed and velocity? One of them is vectorial?

110 dux.ie March 3, 2017 at 7:36 pm

Speed is the aimless heat generating action, like someone said he liked the smell of burning rubber in the evening. Velocity is the directed (re)productive action.

111 VD March 3, 2017 at 12:06 pm

#6 – What is frightening is that the relatively banal comments are not more commonly believed. That the comments of #6 are not commonly believed, by the expert and layperson alike, is strong evidence for the pervasiveness of special pleading/confirmation bias. If this is so, how can anything but the most concrete of sciences ever be reformed?

112 Floccina March 3, 2017 at 12:26 pm

It seems to me that subsidizing so much healthcare at the federal level reduces the incentives for state and local politicians to resist pressure from their healthcare provider constituents to regulate without regard to costs.

So wouldn’t it be better if the feds gave the money to the states (even Medicare money) with some mandate to subsidize care and let the states handle it all? Alternatively move all health regulation to the Feds (which may require a constitutional amendment).

Evidence: Utah, which arguably has the the least corrupt state Government in the USA spend far lower per capita spending on healthcare that more political corruption like New York.

113 Floccina March 3, 2017 at 12:27 pm

My comment is to #1

114 Troll me March 3, 2017 at 4:51 pm

The issue is pretty different for a lot of reasons in Canada, but the matter of not having the federal government responsible for sub-national health provisions is common.

In our case, the federal government hands out many billions in transfer payments (specifically to ensure more equal access to basic services across provinces), and then the provinces make their own decisions.

So the money is coming from the federal level, but the incentives to a) deliver and b) at not too high a cost, are at the provincial level. It could be a problem if people are busy blaming the feds when decisions are made at the sub-national level (waste of time).

115 Turkey Vulture March 3, 2017 at 2:16 pm

3. I think there is a common belief in the magical acquisition of proficiency with technology by having access to it at early ages, and that this accounts for some of the rapidity with which parents adopt such devices for their children. In addition to them being a way to absorb the kids’ attention and get them to shut up.

I don’t believe in such magic so I am trying to maintain limited-to-no access. Technology can help make a lot of things easier, but I think it is more useful when it is adopted at a later stage in development, where it can be seen as one useful tool to address a problem rather than the only possible tool.

116 Islander March 3, 2017 at 4:39 pm

Turkey Vulture, nicely said. The article also claims that kids are dumbed down by the rudimentary functionality of voice assistants, and that’s probably true as well. But whether this affects a kids development depends on the parents and what other skills and morals they teach their kids concurrently. Yeah, if you don’t have a stay-at-home parent, kids rely on these things to learn and develop. Even then there are choices of what sensory spheres you allow for your kids.

I think the real social impact will come when robots can’t just vacuum a perfectly clean floor, but actually tidy up the house. What chores would kids do when robots do nearly for free? When bots can do the dishes? It’s an old dream from the 80s (didn’t they have the jetsons?) that, though now laughed at by many who witnessed the initial hype and dissapointment, is probably very close to being fulfilled.

We all know how spoiled kids turn out as adults, namely they are spoiled. Like fruit. Even the nicest of them can’t muster the psychological energy to perform unpleasant tasks. If you never do exercise as a kid, chances are you won’t be able to bring yourself to do so as an adult, no matter how much you want to.

What will THAT do to kids? No chores and AIs know everything and do it better than you. Might be our future generations are in for a tough adjustment ..

117 Troll me March 3, 2017 at 4:57 pm

They will be better programmers if they get accustomed to being hooked on addictive game of no learning value (beyond hand-eye coordination, etc.) from about the age of 3.

118 Paul March 3, 2017 at 4:44 pm

Australia allows balance billing. US Medicare does not. In Australia the prosperous subside the health costs of the poor. The former pay more to get the doctor of their choice, and subside the less well off. Funny how the US will pay millions for studies but not seriously study what works elsewhere. Irony – it was under Reagan that balance billing was banned.

119 Troll me March 3, 2017 at 5:02 pm

Australia has lots of pretty common sense ideas.

Like having mandatory pension savings, but allowing you to choose which investment firm will manage the mandatory part.

120 mulp March 3, 2017 at 6:07 pm

But conservatives made “balance billing” the solution to controlling costs and cutting insurance premiums, so Obamacare bronze policies balance bill everything over $0 until the total balance billing reaches $2000 to $5000 to $10,000 at which point the patient pays the balance of the bill less $20 or less 20%. (High deductibles and copays)

So, what is the conservative’s number two attack on Obamacare: the cost of medical bills billed to patients for them to pay is far too high.

The number one attack is the mandate to buy insurance. But by not buying insurance, every doctor and hospital bill is balanced billed for everything over $0.

But then conservatives talk about how doctors and hospitals can be forced to cut the amount billed to what you can pay by paying none of the balance at all.

121 Paul March 3, 2017 at 4:46 pm

Alexa needs Google AI then it would be awesome. Right now it is very stupid.

122 Turkey Vulture March 3, 2017 at 8:27 pm

4. Someone just needs to make me GM of the Bills. There is still so much low-hanging fruit in football.

123 Tom Ashbrook Fan March 3, 2017 at 9:50 pm

Tom Ashbrook >>>>> Tyler Cowen

124 Red Wife March 3, 2017 at 11:39 pm

Allowing insurance to be sold across state lines would clear up one problem. If someone’s got an individual policy and moves from one state to another, they have to give up their policy in the old state and buy one in the new. If they’ve contracted an expensive medical condition while in the first state, they may find the new state’s insurers unwilling to sell them a policy.

125 Larry Siegel March 4, 2017 at 4:40 am

#1 – When an executive in an industry says they want orderly markets, they mean they don’t want competition (“chaos”). Lazslewski is just talking his book.

And, after decades of the insurance industry enjoying the profits from regulatory arbitrage, why shouldn’t the consumer catch a break by doing the same thing?

Comments on this entry are closed.

Previous post:

Next post: