Should a state government decide marginal increments of health care?

by on May 4, 2017 at 12:55 am in Current Affairs, Law, Medicine, Political Science, Uncategorized | Permalink

That is one of the debates swirling around the resuscitated Republican health care plan (NYT summary), which now seems to have some chance of passing.  Sarah Kliff writes:

The Republican solution to sick people who need health insurance in a post-Obamacare world is increasingly coming to center on three words: high-risk pools.

The White House has reportedly secured the support of Rep. Fred Upton (R-MI), a longtime legislator, by promising an additional $8 billion to fund these programs. That would mean the Republican plan has nearly $115 billion that states could use, if they wanted to, for high-risk pools.

…There were 35 state high-risk pools before the Affordable Care Act passed. To control costs, they would often do things like charge higher premiums than the individual market. Most had waiting periods before they would pay claims on members’ preexisting conditions, meaning a cancer patient would need to pay premiums for six months or a year before the high-risk pool would cover her chemotherapy treatments.

Kliff then notes those pools have proved quite expensive.  And:

The Republican bill doesn’t require states to build high-risk pools — it just gives them the option. And it has little to say about how states should build them if they decide to do so. It is possible they would also have lifetime limits and preexisting condition waiting periods. Those details are hugely important, but are unlikely to get sorted out until after the bill passes and the Trump administration begins to write regulations.

I don’t favor ACHA, which I see as bringing no benefit and also as involving a cynical desire to repeal Obamacare simply to fulfill a campaign promise (and it needs a CBO score).  Still, I see many people fulminating about this change toward high risk pools, yet without defending their position much beyond a hand wave.  Should all requests for emergency medical care receive additional government funding?  Obamacare itself does not embody anything remotely like that principle, for instance consider all the medical conditions not covered under the mandate, or covered only imperfectly.  Not to mention the rare diseases that receive only limited R&D dollars.  And we’re about to run out of yellow fever vaccine — nasty!  The list goes on and on.  How are those pandemic preparations coming?

If the federal government is asked to pick up the tab for high-risk pools or some rough equivalent, it probably visualizes the cost in terms of either additional borrowing or as a common pool problem.  It is close to a free lunch in political terms, arguably even a political benefit, now that Obamacare is more popular.

If balanced-budget state governments are asked to pick up the tab, they will wonder whether that money should better be spent on schools, roads, and prisons.  Many of them will be reluctant.  Maybe that is right or wrong, but is “let’s have a democratically elected state government decide how much to subsidize medical care for those with preexisting conditions” such a morally outrageous view?  I guess it is these days.  The simple but underemphasized truth is that under the new bill state governments can spend as much as they want on high-risk pools.

(Is it not sobering to think that if the high-risk patients are put into a separate pool, and have to ask for state-level but taxpayer-sourced money in a direct and transparent manner, the political support for that funding is not so strong?  That is perhaps the real lesson here.  In this debate, both sides are the enemies of transparency.)

Which is the better perspective?  Federal or local?  The answer is obvious if you believe all requests for emergency medical care should receive additional government funding.  But, as I’ve mentioned, no one believes that.  I do see people who cite that principle when it is convenient in one part of a debate, and who forget about the same principle for other policy choices.

And please, don’t compare these marginal health care expenditures to “tax cuts for the rich” — instead advocate for where you most want to see the money spent!  Don’t let the silly Republicans bail out your analytical apparatus once again; any program is easy to justify in your own mind if you put it up against what you consider to be a very weak alternative use of the funds.  It is fine to say “bigger subsidies for high-risk pools are better than tax cuts for the rich, but they are still only my 17th most preferred use for the funds.”

Along related lines, while I favor taking in many more refugees, I also understand that any feasible migration policy involves leaving many refugees and potential migrants to their possible deaths, and with a relatively high probability in some cases.  So if your moral argument is “we should let in person x, or person x will die,” you need to provide a limiting principle once again.

Most generally, beware of moral arguments that a) lower the status of some other group of people, and b) do not state and justify their limiting principles.  They are ways of substituting in pleasurable moralizing in lieu of dealing with the really tough questions.

Addendum: Here are some new and relevant results cited by David Leonhardt, I haven’t had time yet to read through them.

1 prior_test2 May 4, 2017 at 1:14 am

Taxes cuts for the rich always have a good chance of passing, certainly since the long ago days of Reagan.

2 mulp May 4, 2017 at 4:04 am

REagan introduced free lunch economics.

Cut tax rates and you get more tax revenue.

Cut regulations mandating high wages and wages will go up faster.

Cut costly regulations mandating paying workers to prevent harm and the cheaper goods create more jobs paying more.

Increase profits by cutting labor costs and workers will buy more increasing gdp.

Trump merely takes free lunch economics to the extreme. Repeal Obamacare and health care costs less in premiums and out of pockets while creating such high profits you will have far more choices from the many providers chasing the high profits who will cover everyone at the price they are willing to pay, including zero.

3 Troll Me May 4, 2017 at 11:19 am

Somewhere along the way someone forgot to remember that cutting taxes from 80% to 70% in a high growth period is not very similar to cutting taxes from 50% to 40% in a low growth period.

4 Thomas May 4, 2017 at 11:45 am

“Derp” – Troll Me

“In 1944, you could deduct business meals, all business travel, all forms of interest payments, and much more. You could even deduct spousal travel expenses on a business trip! (Why travel alone?) Companies could also “loan” or “provide” almost anything to an employee, from an apartment to standard benefits. It was possible to shelter tens of thousands of dollars from taxable income. Three-martini lunches and expense accounts were important realities, skewing tax calculations.

As a result of deductions and exclusions, even the theoretical maximum Real Rate of taxation at 60% in 1944 overstates taxation dramatically. The reality? On earned income, the richest U.S. taxpayers paid close to 40 percent of their earned incomes in taxes in 1944. We simply didn’t count much of the compensation as taxable income.

Allow me to introduce you to Hauser’s Law. Published in 1993 by William Kurt Hauser, a San Francisco investment economist, Hauser’s Law suggests, “No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP.” This theory was published in The Wall Street Journal, March 25, 1993. For a variety of reasons, we seem to balance tax collections within a narrow range.”

5 Dick the Butcher May 4, 2017 at 8:11 am

Did you read the book?

Did you read a book?

Here are two of the (there are only four) four questions a sane person asks a liberal lunatic (in 2017 that is redundant) in these so-called debates – How much will it cost? And, who pays?

For example, anybody with a heart (even me) is touched by the financial problems of a sufferer from a pre-existing health catastrophe. However, inform her/him that she/he has to pay for it – it changes the dynamic.

6 prior_test2 May 4, 2017 at 9:18 am

‘is touched by the financial problems of a sufferer from a pre-existing health catastrophe’

And yet again, this problem does not exist anywhere else in the industrialized world, where health care costs at least a third less. The very concept of ‘pre-existing condition’ does not exist.

7 Troll Me May 4, 2017 at 12:42 pm

If I correctly recall from accounting 101, there are both costs and benefits.

I think this logic also applies in economics.

And in finance.

Basically any field that touches money has to look at both costs and benefits of things. I observe that you are only interested in costs, and most likely are constitutionally unable to give genuine consideration to the possibility of benefits from anything that anyone has convinced you should be associated with “liberal”.

8 Thomas May 4, 2017 at 9:09 pm

“there are both costs and benefits.”

The government has a compelling interest in increasing tax receipts, see Kelo. Cost-Benefit means the poor die.

9 Willitts May 4, 2017 at 8:29 am

“Tax cuts for the rich” is inconsistent with the “fairness” justification for progressive taxation.

If you are arguing that progressive taxation hurts the rich less than the poor, you cannot argue that a tax cut helps the rich more than it hurts the poor.

Moreover, tax sources do not belong to the government by default, and by extension are dedicated to redistribution. Tax sources belong to their earners, and every tax must be justified. Proponents of higher taxes are attempting to shift their burden of persuasion. Absolutely no one is hurt by a tax cut. Taxes cost, tax cuts do not. In the case of a pigouvian tax, net welfare might decrease with a tax cut, but efficiency is not always a valid and lawful political objective. If you say it is, I can think of many inefficient government intrusions that must be stopped using the efficiency rationale.

10 Troll Me May 4, 2017 at 11:24 am

“If you are arguing that progressive taxation hurts the rich less than the poor, you cannot argue that a tax cut helps the rich more than it hurts the poor.”

Please allow me to explain the flaw in your thinking.

1) The argument that $1 of tax on a poor person is felt more than $1 of tax on a rich person is normally explained on the basis of declining marginal utility. If I have no money, $1 might be worth quite a lot to me, whereas if I have $1000, it’s not worth that much at all, and if I have $1,000,000, I might not bother even to stoop to pick up a dollar even if I had no incoming cash flow to speak of. I.e., due to declining marginal utility, $1 of tax is less painful to the rich than the poor.

2) The question of whether the tax cut benefits the rich more or the poor more. Well, now you’re thinking in absolute values, and marginal utility considerations are out the window.

So it can only be expected that you’re going to be off the mark in your reasoning from there, and if somehow there is agreement beyond that, it could only be due to some sort of luck or something.

“Absolutely no one is hurt by a tax cut. Taxes cost, tax cuts do not.”

So, here is where you communicate to us that you are a fully dogmatic neoliberal. You forgot to remember that governments do not stuff all that money deep into the ground never to be seen again, or burn it for fun. In fact, in many countries, the problem is that governments need to find suitable means to increase the tax-to-GDP ratio in order to ensure provision of health, education, transportation, and other basic needs for the decent functioning of an economy.

11 Troll Me May 4, 2017 at 11:26 am

So, if you’re not too dogmatic, you should be able to see that within this other frame of thinking, it is entirely possible for taxes to be higher than they should be in some situation.

That is theoretically possible. How possible? It depends. But the answer is not 100% of the time.

12 HA2 May 4, 2017 at 1:27 am

Discussing whether federal or local funding is better is missing the point of a lot of the discussions.

“Federal government provides funding for states to do it” is just an intermediate point between “Federal government just does it” and “Nobody does at all”. So if you want everybody to have health care, Federal government providing more of it is good, states providing less of it is worse, nobody doing it at all is good. Vice versa if you want nobody to pay for poor peoples’ health care – they’d prefer no funding at all for it, state control is worse (because some might do it), and federal is worse than that.

It’s not an argument about who is better about providing something. Its just about scope: Whole country > some states > nobody.

13 Willitts May 4, 2017 at 8:36 am

No it’s not missing the point. He specifically stated the fact that states have a balanced budget requirement while the federal government does not. States are therefore required to make difficult choices that the federal government can slough off.

If one of your family members was in need of surgery that costs $2 million to prolong her life, possibly, another six months, there is an important choice to be made: is it worth $2 million to prolong her life briefly? If YOU had to pay for this surgery, then you would be forced to make this determination, possibly in concert with your family. But you would bear the costs of your decision.

States making that decision face similar choices. Do they fund this surgery or fund their next best alternative?

The federal government can run up limitless debt, saddling all residents and even some foreigners with inflation – a hidden tax. But unlike the other two cases, no one is forced to make a hard choice. The steering wheel has been chained. The only remaining choice is career suicide: breaking an empty promise that some prior lawmaker made for you for the sake of votes.

14 Hoosier May 4, 2017 at 11:10 am

” If YOU had to pay for this surgery, then you would be forced to make this determination, possibly in concert with your family. But you would bear the costs of your decision.” No human being should need to make this decision. Can we be a little bit more caring? Sure, there needs to be some cost sharing, but the Republican proposal goes way beyond that. Also, why do we need to go backward?

15 Troll Me May 4, 2017 at 11:29 am

I get what you mean.

But it’s not like the decision is left to computers.

16 LibertyRisk May 4, 2017 at 3:49 pm

Every time you decide to spend an amount of money to save a life with some probability you set a lower bound on the value of human life. Similarly, every time you decide not to spend money on something that would save a life with some probability you set an upper bound on the value of human life.

We live in a world of finite resources. By refusing to place monetary value on human lives and apply rational analysis to these decisions you create inconsistent upper and lower bounds and drastically reduce the probability of efficiently allocating resources. When you spend money on something you view as a terminal good without consideration for tradeoffs you do worse. The attitude that no human being should have to make decisions like this puts us in a situation where we could allocate money differently and save more lives.

It’s unfortunate, because the attitude that “you can’t place a value on a human life” comes from a very good place, but ultimately means more people die.

17 Thomas May 4, 2017 at 9:23 pm

We should spend the entire world gdp on every person. Yes, that is an accurate reduction of the progressive-leftist ideology.

18 Ricardo May 4, 2017 at 1:49 am

If high-risk pools are run by the states, one obvious problem is that there will be an incentive for sick people to move from less generous to more generous states and healthy people to move in the opposite direction, precipitating a death spiral of sorts.

19 TSB May 4, 2017 at 1:52 am

Solve for the equilibrium?

20 Doug May 4, 2017 at 2:36 am

Pretty unlikely Interstate migration is tiny. Interstate migration of the sick is virtually non-existent. For better or worse the sizable majority of sick people cannot make a major move. They’re financially illiquid, physically weak, fatigued, scared, locked-in to their local healthcare providers, and dependent on nearby family and caregivers.

21 Ricardo May 4, 2017 at 3:16 am

According to the Census, between 4 to 5 million people move across state lines every year. Add that up over a five- or ten-year period and it is not “tiny” at all. By contrast, about 250,000 people were covered by state-run high-risk pools before PPACA was passed.

In the context of this conversation, “sick” means someone with a pre-existing condition who would find it difficult or impossible to find affordable health insurance. Some subset of these people are certainly going to fit your description but, then again, many of these people will qualify for Medicaid and even Medicare if they submit a successful disability claim. Not everyone with a chronic condition or troublesome medical history is disabled or helpless in quite the manner you describe, though, and we also need to consider healthy parents with sick children.

22 chuck martel May 4, 2017 at 6:37 am

Insurance coverage of pre-existing conditions isn’t insurance, it’s free medical care, as if one could buy fire insurance for a house after it’s a pile of smoldering ashes. The central problem of health care is, of course, expense. Providing subsidies to health care providers, which is the current thinking, doesn’t make health care cheaper, it makes it more expensive. Using the words “health care” and “insurance” in the same sentence is a logical inconsistency.

23 Ricardo May 4, 2017 at 6:58 am

What health insurance plan back in 2007 offered to provide lifetime medical coverage? Most people need health insurance that works like whole life insurance and protects you from crippling medical bills in exchange for a reasonable percentage of annual income with guaranteed continuity and fixed premiums up until the point you become old enough to switch to Medicare. As far as I can tell, though, the market provided no such product as of 2007 and so we had all sorts of stop-gap measures like ERISA, HIPAA and COBRA (which broadly ensure continuity of coverage for those who get health insurance through their employers) and high-risk pools, Medicare (for the disabled) and Medicaid for those couldn’t get group coverage and either couldn’t afford individual coverage or simply could not find a company willing to insure them.

If we are going to use tax money to directly subsidize the care of people who are too sick to maintain private insurance, there is no reason not to simply adopt a public option wholeheartedly and cover everyone for catastrophic care while allowing people to purchase supplemental care. That’s basically the Singapore system. Back when PPACA was being debated, conservatives were all about advocating for such a system but now that the Republicans are in power, one doesn’t see any serious proposal from Republicans in power to move toward such a system.

24 Rock Lobster May 4, 2017 at 9:41 am

I think this gets at the issue. Chuck is correct to point out the issues with calling free care “insurance,” but we have to put semantics aside and address the practical issue that the old “insurance” system had a lot of holes that people could fall through, and if you had a pre-existing condition and fell through a hole (through, say, unemployment), you were basically screwed. Hence the stop-gap measures Ricardo mentions. That’s what people are talking about when they say “I should be able to get health insurance even though I have a pre-existing condition.” If they start getting a lecture about semantics it’s not going to go over well.

25 The Anti-Gnostic May 4, 2017 at 9:57 am

This is the fundamental problem. The other one that never gets mentioned is the tort system.

26 GeorgeNYC May 4, 2017 at 10:33 am

The tort system is a problem BECAUSE we have no health care. Juries ascribe fault loosely because they see individuals facing tragic costs. Let everyone know that those costs are covered and the tort problem goes away. Like everywhere else in the world.

27 The Anti-Gnostic May 4, 2017 at 10:49 am

Everwhere else in the world caps pain and suffering awards.

28 prior_test2 May 4, 2017 at 10:59 am

‘Everwhere else in the world caps pain and suffering awards.’

No they don’t. As can be read from this google cached PDF file, which clearly explains the German system –

29 Troll Me May 4, 2017 at 11:38 am

The ability to construe some health insurance product as other than “insurance” does not mean that it is not possible for any health insurance product to actually constitute insurance.

I don’t see why someone should have to pay through the teeth because they lost a job and couldn’t keep up the premiums for a period or something like that.

That’s not an insurance system. That’s preying on the poor. Kicking people who are down. By virtue of it being how it is, thus systematic. Systematically kicking down those who tumble, timed perfectly for when the hit the second big hit to their fortune.

It is not very becoming for one of the most advanced nations on earth to tolerate things being systematically set up in such a way.

And, in the process maybe save a trillion dollars a year, because single payer health care is cheaper at the system level AND achieves better results. Who woulda thunk?

30 Floccina May 4, 2017 at 11:42 am

@Ricardo, Michael Cannon claims that there was guaranteed renewal health insurance before PPACA.

31 Daniel Weber May 4, 2017 at 12:17 pm

So uninsured people went from innocent children in 2006, to freeloaders in 2010, and are now back to being innocent children again in 2017. I wonder where they will be in 2020?

32 The Anti-Gnostic May 4, 2017 at 12:44 pm

The German system uses precedents and judges set the awards. Americans have no idea how much they are paying for twelve people to pull a number out of the air for the worn-out rotator cuff that somebody attributes to a car wreck.

33 prior_test2 May 4, 2017 at 1:30 pm

‘The German system uses precedents and judges set the awards.’

Yes it does, but there are no caps, as you boldly proclaimed exist everywhere except the U.S.

You are on much firmer ground to simply say the American system is defective and can lead to bad results, which is pretty obvious.

34 Floccina May 4, 2017 at 11:09 am

We are talking about charity, so shouldn’t we just cover those with per existing conditions who are relatively low income. If a rich person has a preexisting condition even charitable people would probably not pay his medical bills, so why should Government?

35 Troll Me May 4, 2017 at 11:38 am

Not very difficult to rationalize rich people getting access to free health care. They pay more taxes, right?

Normally the issue is not wanting to pay taxes that contribute to the health and wellbeing of others.

36 Floccina May 4, 2017 at 11:57 am

Normally the issue is not wanting to pay taxes that contribute to the health and wellbeing of others.

That is putting the opposition in the worst possible light. Some people believe that freedom will produce better results. One reason might be that insurance premiums are an incentive for a wife to work in the taxed economy, higher taxes to pay for socialized medicine are a disincentive for a wife to work in the taxed economy and that tends to less efficient.

Another thing: from what I understand some people near the boarder go to Mexico for care that is a good thing to motivate.

Here is my compromise proposal.

37 Thomas May 4, 2017 at 9:24 pm

One problem? Why is it a problem that your generosity should be covered by your productivity? lol.

38 anna May 4, 2017 at 2:28 am

The best policy is the one that will lead to the deaths of the largest number of Republican and Democrat voters.

39 prior_test2 May 4, 2017 at 2:59 am

Then the pre-existing condition exclusion returning in its pre-ACA form is likely your best bet. After all, 15 states did not even bother to provide chemotherapy to cancer patients even after they paid into a high risk pool for no coverage for months.

The truly bizarre thing when reading about these exceptionally American health debates is just how much of it needs to be explained to anyone familiar with any of the other health care systems found in the industrial world, all of which are at least a third cheaper than the U.S. The idea of a ‘pre-existing condition’ as having something to with health care insurance and health care being provided to someone like a cancer patient is fully unimaginable whether one is used to the Australian, British, French, or German systems (all of them quite different from each other). The Canadians undoubtedly also find this bizarre, but their proximity to the U.S. means they are likely to understand what effect ‘pre-existing condition’ has in terms of American health care. And just might explain why essentially no one in Canada is thinking of ‘improving’ their current provincial health insurance system by throwing it away.

40 Scott May 4, 2017 at 8:35 am

I’ve noticed that too. While the U.S. has strayed some from the ideal free society with responsible individuals, the rest of the industrialized world has gone so far off course that they can’t even understand reason when they hear it.

41 prior_test2 May 4, 2017 at 9:20 am

So far off course that they pay at least a third less for health care than the U.S.? Talk about American exceptionalism on display.

42 Bob from Ohio May 4, 2017 at 10:00 am

They get 1/3 less of care so it all evens out.

There are more MRI machines in a mid size US city like Pittsburgh than all of Canada. We get faster and better diagnosis which leads to faster and better care.

Everyone in the Cleveland Ohio area [like me] can be seen by a specialist at one of the top 5 hospitals in the world in days. Sometimes the same day! UK or Canada, for instance, months or even years.

43 prior_test2 May 4, 2017 at 10:47 am

‘They get 1/3 less of care so it all evens out.’

Not even close. Here are some highlights – ‘The U.S. had fewer practicing physicians in 2013 than in the median OECD country (2.6 versus 3.2 physicians per 1,000 population). With only four per year, Americans also had fewer physician visits than the OECD median (6.5 visits). In contrast, the average Canadian had 7.7 physician visits and the average Japanese resident had 12.9 visits in 2012.

In the U.S., there were also fewer hospital beds and fewer discharges per capita than in the median OECD country.’

Or this – ‘ On several measures of population health, Americans had worse outcomes than their international peers. The U.S. had the lowest life expectancy at birth of the countries studied, at 78.8 years in 2013, compared with the OECD median of 81.2 years. Additionally, the U.S. had the highest infant mortality rate among the countries studied, at 6.1 deaths per 1,000 live births in 2011; the rate in the OECD median country was 3.5 deaths.

The prevalence of chronic diseases also appeared to be higher in the U.S. The 2014 Commonwealth Fund International Health Policy Survey found that 68 percent of U.S. adults age 65 or older had at least two chronic conditions. In other countries, this figure ranged from 33 percent (U.K.) to 56 percent (Canada).’

Or this – ‘One area where the U.S. appeared to have comparatively good health outcomes was cancer care. A 2015 study by Stevens et al. found that mortality rates from cancer in the U.S. were lower and had declined faster between 1995 and 2007 than in most industrialized countries.16 Other research based on survival rates also suggests that U.S. cancer care is above average, though these studies are disputed on methodological grounds.17

The opposite trend appears for ischemic heart disease, where the U.S. had among the highest mortality rates in 2013—128 per 100,000 population compared with 95 in the median OECD country. Since 1995, mortality rates have fallen significantly in all countries as a result of improved treatment and changes in risk factors.18 However, this decline was less pronounced in the U.S., where rates declined from 225 to 128 deaths per 100,000 population—considerably less than countries like Denmark, where rates declined from 242 to 71 deaths per 100,000 population.

The U.S. also had high rates of adverse outcomes from diabetes, with 17.1 lower extremity amputations per 100,000 population in 2011. Rates in Sweden, Australia and the U.K. were less than one-third as high.’

Though when it comes to diabetes amputations, those poor people in places like Sweden and Australia were getting two thirds less.

44 Hoosier May 4, 2017 at 11:17 am

What if you can’t afford all of those fancy MRI’s in Pittsuburgh? Screw off I guess? And you are not living in the real world if you don’t think there is a sizable minority of people in every country of the world incapable of taking care of themselves.

Why is the US the only 1st world country where people need to post flyers at work to fundraise for their neighbor’s newborn who needs a $100K surgery to survive? Even if you’re making the median income it’s tough to pay for that. And for what purpose? Do you really believe that if the Republican plan passes in 20 years that $100k surgery will be down to $10k or some other reasonable amount? (besides the fact that even $10k would be out of the budget for a great many people in this country).

45 Floccina May 4, 2017 at 12:03 pm

“Then the pre-existing condition exclusion returning in its pre-ACA form is likely your best bet. After all, 15 states did not even bother to provide chemotherapy to cancer patients even after they paid into a high risk pool for no coverage for months.”

Case & Deaton are pushing a story that life expectancy gains have recently slowed bring into question the value of marginal Healthcare. And according to Noah Smith‏ (no right winger): “TONS of research shows that healthy spending in America doesn’t improve outcomes at the margin.”

It could be that the PPACA contributed in a very small way to opioid epidemic.

46 Yancey Ward May 4, 2017 at 3:09 am

A simple principle should be that high risk individuals (basically individuals who will consistently consume more than they ever pay) should either pay higher premiums, or they shouldn’t be in the general insurance market at all. If you are going to mandate the payment for their care by third party, then do it solely with taxation, not through higher premiums for healthy and younger people. This is why the exchanges are failing in the ACA- people have the option to not pay premiums that are outrageously high for the amount of return they get for them. People aren’t quite so irrational.

Getting it to the state level makes sense- closer to the voters who will be paying for it.

47 mulp May 4, 2017 at 3:34 am

Come on, just say you want creative destruction.

When the property costs more than it produces, it’s scrappedestrian and sold for salvage value.

Euthanize the sick and poor and sell of the body parts to the rich and sick.

As Milton Friedman said, the corporate manager has only one responsibility: profit. Government is merely a super corporation.

Forget morality and focus only on dividends to the biggest shareholders, those with the most wealth.

48 Ricardo May 4, 2017 at 4:08 am

Since when did it become a Republican principle that state governments are better at negotiating prices with providers than private companies? Moving sick people from PPACA plans to high risk pools lowers premiums for other participants in the PPACA plans but where is the evidence this cuts costs?

49 Troll Me May 4, 2017 at 11:47 am

If you consider that pharma companies ubiquitously oppose it … probably this means that states can negotiate lower prices better than private companies.

50 Daniel Weber May 4, 2017 at 12:26 pm

Aetna has 23 million members; only two states are bigger than them. They are negotiating as well as any state can without violating property rights.

51 prior_test2 May 4, 2017 at 4:10 am

‘A simple principle should be that high risk individuals (basically individuals who will consistently consume more than they ever pay) should either pay higher premiums, or they shouldn’t be in the general insurance market at all.’

And yet, almost bizarrely, in every single other health care system in the industrialized world, all of them at least a third cheaper than the American one, this debate does not even exist. At all, to the extent that this exceptionally American perspective needs to be explained to people, all of whom in my experience find it morally repugnant that this is even considered possible, much less normal, in American health care policy terms.

It helps to remember when having such (carefully framed) discussions as the one posted by Prof. Cowen that the U.S. is an exceptional outlier. And that even Prof. Cowen’s carefully modulated attempt to bring morality into play to support his positions would be seen as typical for the sort of man that also feels the Nazis were merely a speedbump on the road to a world where eugenics is considered not only acceptable, but desirable.

What is really sad is explaining to people here that some of the people most devoted to cutting health care in the U.S. proudly proclaim themselves Christians, who are being persecuted by government expanding health care to all citizens, both the ‘deserving’ and the ‘undeserving.’ What is even sadder is when a German 14 year does an exchange program and lives with a family that calls themselves Christian and yet fully supported the complete repeal of ACA when she was there, that the 14 year old comes back to Germany to explain to everyone she knows that there is something seriously wrong with those so-called American ‘Christians,’ without being able to understand that many Americans who call themselves Christians are not actually the sort of people she lived with. Of course, considering who is running the U.S. at this point, her opinion has considerably stronger empirical support than a couple of years ago.

52 Bob from Ohio May 4, 2017 at 10:04 am

Yeah, we get it, Germany Uber Alles and you hate America.

Does it always need 300 to 500 words to say so?

53 prior_test2 May 4, 2017 at 10:51 am

The odd thing is, every time I write about health care comparisons, I use the term ‘rest of the industrialized world.’ There are a number of different health care systems, quite distinct from another, yet even the most expensive of those costs one third less than the U.S.’s. Most people, most definitely including English speaking citizens of countries like Australia and the UK, are appalled when they discover just what sort of ‘debates’ exist in the U.S. when it comes to pre-existing conditions, as both countries are able to care for everyone at costs that are dramatically lower than that of the U.S.

54 Floccina May 4, 2017 at 12:36 pm

Most people, most definitely including English speaking citizens of countries like Australia and the UK, are appalled when they discover just what sort of ‘debates’ exist in the U.S. when it comes to pre-existing conditions, as both countries are able to care for everyone at costs that are dramatically lower than that of the U.S.

So what the above says is that they have a good reason to hate us. On the other hand US citizens work more in the taxed economy, the countries with socialized medicine work more in the non-taxed economy, they also pay a lower percent of mandated taxes (more tax evasion) and give less to charity.

55 prior_test2 May 4, 2017 at 1:44 pm

‘So what the above says is that they have a good reason to hate us.’

Why would anybody outside the U.S. hate Americans because the American health care system is so screwed up? Generally, the people I know just feel pity, along with a degree of being thankful that they don’t have to deal with anything like the American health care system in their life. See the point above about asking for donations at an American workplace to pay medical bills for an infant. The Post prints things like that regularly enough that it is not exactly a blue moon occurrence.

‘On the other hand US citizens work more in the taxed economy, the countries with socialized medicine work more in the non-taxed economy’

To start with, VAT is pretty hard to avoid. Second, only the British can be properly described as having ‘socialized’ medicine. The entire German medical system is in private hands, with everyone working in it extremely interested in earning money. The same applies to all of the other European health care models, to the best of my knowledge (for example, I am not going to check how Bulgaria works, mainly because it is not what I consider part of the group of industrialized nations). This socialized medicine claim is just another one of those things that falls apart the second one uses health care in France, Italy, or Germany. The only reason to be a bit tolerant of the non-stop propaganda connected to calling health care in Europe ‘socialized’ in American health care debates is because the only country with a major English speaking media industry where American media can pretty much cut and paste just happens to be the only country in Europe that actually does have what can be accurately described as socialized medicine. And what is truly amusing is that basically no one in Europe thinks the British model is worth emulating, at least in terms of results.

56 Thomas May 4, 2017 at 9:32 pm

The rest of the world free rides on American cost. All it would take is legislation banning the foreign sale of US pharma IP and you guys could finally stop being dependents on the best economy in the world.

57 Troll Me May 4, 2017 at 11:52 am

Usually if someone’s telling you you’re doing something dumb, and you actually ARE doing something kind of dumb, that’s more like helpful and less like hating.

Unless maybe you say it in some kind of way like the intent it to tell you you’re dumb, and not for the purpose of promote an improvement upon the situation.

58 kevin May 4, 2017 at 7:49 am

Kicking out anyone who “consistently consume more than they ever pay” will cause a reverse death spiral. As your pool is made up of more and more healthier people the average cost continues to go down. Regardless, someone will always cost more than average causing them to get kicked out.

The end result, just like a death spiral, will be no one is insured

59 The Anti-Gnostic May 4, 2017 at 10:05 am

If that were the case all forms of insurance would cease to exist. They don’t because in a normal insurance market insurers compete for good risk.

If as apparently we must cover medical risk then scrap the tort system and let’s have single-payer

60 Hoosier May 4, 2017 at 11:35 am

Would you prefer single payer to what we currently have? Honest question.

61 Troll Me May 4, 2017 at 11:55 am

It works well, with good results for less money, in a lot of places.

The possible pathway there is not clear, however.

62 Daniel Weber May 4, 2017 at 12:36 pm

It all depends what you mean by single-payer, which incorporates a lot of different systems. For what it’s worth, I don’t think the government running things is necessarily bad.

But the way most other countries keep their costs down is by making hard decisions. Americans have been told for 80 years that they don’t have to make those hard decisions, so any attempt to pass laws incorporating those hard decisions would fail for the same reasons private companies cannot make those hard decisions.

Or, more tritely, if we were capable of accepting single-payer we wouldn’t need it.

The worst case is that we make a half-assed attempt at it, doling out all the ice cream but refusing to eat our vegetables. While everything goes down the tubes you would still get idiots in comment sections saying correct but completely useless asinine things like “well, when you poll Americans about most parts of our new health care system they really like it!” Obama went in with a filibuster-proof majority in Congress and a perceived mandate for PPACA and the “vegetables” portion of it — the mandate — was ineffectual so that it might end up destroying the private insurance market. While certain German commenters complain that it’s now the Republicans’ jobs to do force the voters to eat the vegetables to offset the ice cream Obama delivered.

63 The Anti-Gnostic May 4, 2017 at 12:54 pm

I think it’s the only way out of the third-party-payor problem. Insurance is an awful way to pay for most things; it’s why people drive around in dinged-up cars. It’s also why I don’t go to the doctor unless something’s bleeding. I pay the first $7.5K regardless, and any visit that involves lab work guarantees invoices streaming in for picayune amounts over the next six months. I don’t have any chronic conditions, thank God.

We are getting lower life expectancies, lower infant mortality for more of our GDP devoted to medical care than any other Western country. One of two things is happening: the human stock isn’t as good (crimethink!), or market forces have already left the building and we’re well into rent-seeking and transfer payments. We’re not going to

This is in tandem with a tort system that is absurd and appalling. You have no idea how much waste and fraud you are paying for in the general price level.

64 The Anti-Gnostic May 4, 2017 at 12:59 pm

*We’re not going to let market forces operate, so time for some creative thinking. Out of the trillions in government tax revenue we can probably come up with something. I’d eliminate several federal departments to help on the cost as well.

65 Troll Me May 4, 2017 at 6:07 pm

Low income people in wealthy countries tend to eat too much fat and salt.

There are a lot of low income black people.

Low income black people, like other low income people, tend to eat higher volumes of processed foods high in salt and fat.

So, in observing differences in health outcomes, consider that social stuff in a society comprised of people is socially relevant. For example income and nutrition having links which turn up in health outcomes.

There is no crime in suggesting that black people have poor health habits commonly associated with having low income. But you seem to suggest something or other about inferior stock. And if some (especially too many) people take that to be conducive to “hey, so maybe let’s get rid of them”, then on that basis, in most Western countries, yes, it is considered criminal to espouse things in way which are conducive to future violence on group bases.

So no matter that you may not feel that way, your wrods will stimulate those who DO think that way. Upon which basis of personal responsibility for things that have social consequences, indeed, many places would leave space in the law to analyze both intent and outcome, and determine whether the speech was criminal.

Like, the guy who contracts the killer gets more years in prison than the contract killer. Because he caused it. (As an analogy. I do not wish you to paint you into a corner in that regard…)

66 Daniel Weber May 5, 2017 at 8:28 am
67 kevin May 4, 2017 at 4:03 pm

Normal insurance markets exist because there is a profit margin built in. If you look at the profit margin as another cost, then half of people will fall below average cost and half above. Government doesn’t need a profit margin, so its not applicable here.

68 The Anti-Gnostic May 5, 2017 at 8:23 am

That’s precisely the problem. In a normal market, insurance companies are allowed to price risk to maintain profits. Companies with bad claims runs have to go out of business. Chronic drunks have to stop driving. Society does not want to allow the equivalent to happen with medical insurance. Morally, it’s probably the correct choice since we can frankly afford it if we’d prioritize among overseas wars, useless federal departments, the tort system, etc. But nobody wants to prioritize; we think we can have it all.

69 Bill May 4, 2017 at 11:59 am

Yancey, The high risk pools don’t work that way. A high risk pool consists of persons private insurers reject, for often silly reasons, such as having an abnormal liver enzyme test, or in some cases risks associated with past illnesses that could reappear. (The pool cost doesn’t include the physical you have to take to get the private insurance, from which the underwriter makes the decision not to cover you.) High risk pools are open to all providers, and are managed by one insurance company. Because all providers can serve the pool, there is no competition among providers to be in the network, because they are automatically in it. Subsidies to high risk pools to cover the insufficiency are usually met by taxing all insurance carriers based on their enrolled populations, taxing hospitals, and in some cases, providers…so, guess what, unmanaged care costs get shifted to everyone else again.

High risk pools have been around for a long time. If they were a solution, you would have known about it before now.

70 Aidan May 4, 2017 at 3:11 am

Leaving triage choices up to politicians seems like a really bad idea, mainly thanks to information problems. With the best will in the world most of them know very little about it. Whatever system you end up with decisions about allocating scarce medical resources are best left up to medical professionals . Both doctors and politicians have to deal with lobbyists, but at least the doctors should have enough information to see past those incentives if they are so inclined.

71 Yancey Ward May 4, 2017 at 3:21 am

It isn’t like the politicians are right there in the hospital. Nothing stopping the treatment, all the politicians do is determine whether or not the medical practitioners get paid from the public purse. There do have to be rules here, not open public wallets.

72 Willitts May 4, 2017 at 8:40 am

Some would argue that leaving rationing up to wealth and income is a really bad idea. While I do not agree, it’s a hard argument to make persuasively in a quasi-democracy where most people are hyper self interested, envious, and too ignorant to know the total effect on society.

73 Hoosier May 4, 2017 at 11:36 am

This is basically the utilitarian way of looking at it, right? The whole may be better but there will be individuals who get screwed.

74 Troll Me May 4, 2017 at 12:04 pm

Politicians do not make triage decisions. They can indicate upward and downward preference for targets, and influence the amount of money in the budget.

75 BC May 4, 2017 at 3:26 am

“Is ‘let’s have a democratically elected state government decide how much to subsidize medical care for those with preexisting conditions’ such a morally outrageous view?”

That seems to be the crux of the matter. Neither Obamacare nor AHCA (nor the pre-Obamacare status quo for that matter) changes the cost of covering those with pre-exisiting conditions, just who pays that cost. Obamacare buries the subsidies implicitly in everyone else’s premiums. The transparent way to do it is for taxpayers (either state or federal) to pay direct subsidies so that we can decide on how much, to whom, under what circumstances, and who pays (which taxpayers). Does anything in the AHCA prevent any state legislature or future Congress from raising taxes to increase subsidies for those with pre-existing conditions? I don’t think so. On the other hand, when the subsidies are buried in everyone else’s premiums, no one knows how to change or modify them.

“Is it not sobering to think that if the high-risk patients are put into a separate pool, and have to ask for state-level but taxpayer-sourced money in a direct and transparent manner, the political support for that funding is not so strong? That is perhaps the real lesson here. In this debate, both sides are the enemies of transparency.”

How is the high-risk pool not transparent? If the political support is there for more funding, you just raise taxes and do it. You can specify exactly whose taxes will go up by how much. That would seem to be about as transparent as one can get.

76 mulp May 4, 2017 at 3:54 am

Every person suffers from a pre-existing condition in all conservative plans: aging

Obamacare is conservative, Heritage, charging increasing premiums as your preX becomes more severe, but not enough for the increasing right wing Republicans who want a minimum 7% annual premium increase over the Obamacare max 5%. Note ERISA prohibits all preX including aging in setting premiums.

(The preX premium increase is banded into 3 bands in Obamacare with a max delta of 3, but within a band, the young subsidies the old. To remove the young subsidies the old, just increase the number of bands, and increase the delta between the top and bottom bands, as Republicans have called for. But they might as well simply set the band to one year and the increase the premium by 5-10% every year to reflect the progression of the universal preX.)

77 rayward May 4, 2017 at 6:24 am

Health care in America is based on division: separate programs for separate groups, the rich, the poor, and the middle; the young, the old, and the middle; the healthy, the sick, and the middle; the gainfully employed, the unemployed, and the middle; and on and on and on. Of course, the appeal of division is that one will fall into a preferred group, the healthy, the old, or the gainfully employed (with “group” insurance), that combined with the human capacity to believe bad things (sickness, unemployment, etc.) happen to somebody else. One need look no further than the comments at this blog for ample evidence of the human capacity to believe bad things happen to somebody else. I suppose the goal of those who oppose division in the distribution of health care is “certainty”: certainty of care if one is unfortunate enough to suffer a chronic illness, become unemployed, or suffer any number of economic losses. But if “certainty” produces “complacency” (the decision to take greater risks (smoking)) which increases “uncertainty” (can we afford health care for everyone including the complacent?), then it’s a fool’s goal. The Cowen Puzzler strikes again.

78 Boonton May 4, 2017 at 6:25 am

Waiting 6 months to ‘start chemo’ means killing people with cancer.

At least with a ‘death panel’ you have a body of decision makers who you could make your case too.

79 The Other Jim May 4, 2017 at 6:58 am

Seeking to repeal our disastrous and doomed healthcare system before it completely implodes is “cynical.”

Got it.

80 Bill May 4, 2017 at 7:31 am

It’s always the details that kill you.

Take high risk pools, for example. What is high risk. In our state, “high risk” was an abnormal liver enzyme test, common to a significant part of the population. Why did it put you in the high risk pool…tthey needed healthy bodies to subsidize the sick who were in the pool. (There were many other extreme examples of what got people into the pool.) The high risk pool premiums were astronomical, so healthy people didn’t join it unless they were sick.

So, how did they fund the inevitable deficiency of the high risk pool…by placing a tax on hospitals, and health insurance companies, further raising premiums and raising hospital costs to those who are not insured and to insurance companies, and hence ratepayers, who paid hospitals for their services.

Rube Goldberg would be proud.

81 megamike May 4, 2017 at 7:35 am

This 70-Year-Old Cartoon Made the Strongest Healthcare Argument Ever

82 dan1111 May 4, 2017 at 8:26 am

It’s a compelling cartoon, but in 2017 I don’t believe there is much cheap low-hanging fruit where a small amount of additional government funding can yield massive health benefits.

83 The Engineer May 4, 2017 at 10:09 am

We could easily and cheaply pay for all the 1950-era healthcare for everyone. It would cost 3 cents a day.

Of course, ain’t nobody want 1950-era healthcare.

84 Bob May 4, 2017 at 11:17 am

We don’t even give 1950s era healthcare as an option. For some people with chronic conditions, 1950s coverage would be better than their current alternatives.

We could have far worse equipped emergency rooms, with less doctors and more nurses, which, in a 50s world, would be cheaper and be just as good than most urgent care clinics around me. But training a doctor is expensive, and you have to go talk to one if you want access to medicine for something as simple as a wound that is getting pretty infected. Pay a doctor $200 so they’ll let you buy $5 in antibiotics (although the doctor will suggest the $200 antibiotics)

The pre-existing condition model is all about still living in a premium treatment, premium cost world, and just cutting people out, instead of letting people downgrade to a less expensive environment. But you won’t see a Republican in congress favoring that. Instead we have expensive insulin and expensive epi-pens.

85 Floccina May 4, 2017 at 4:27 pm

I think that if you just paid for vaccinations and antibiotics you would be as good as 1950’s healthcare.
See: and here:

I hope that we have gotten a little better since then.

86 Daniel Weber May 4, 2017 at 4:42 pm

Let’s not be stingy. Add in taking 5 cents worth of aspirin for a heart attack.

(The 1950s was when investigators were just learning about taking aspirin for a heart attack, but it took a while for the medical community to accept the research.)

87 Christine May 4, 2017 at 7:44 am

I love you, Tyler.

88 bellisaurius May 4, 2017 at 8:12 am

I’m going to go with this too. We’re talking about stuff that may cause some people to live or die. It would seem important enough to cut through the BS and actual come up with something useful. Good on tyler for trying to bring us back to actual debate.

89 Lee A. Arnold May 4, 2017 at 7:58 am

Entrepreneurial startups been been dropping for 35 years, despite plummeting interest rates, and during a period of varying of tax policies and regulatory policies. So WHY are we still worried about maintaining and justifying the scarcity of money in taking care of basic human needs? These intellectual and moral premises don’t add up; are not coherent.

90 Willitts May 4, 2017 at 8:19 am

“sick people who need health insurance”

Who can spot the problem with this?

91 Ricardo May 4, 2017 at 9:12 am

As I asked above, what health insurance plan back in 2007 offered to provide lifetime coverage? Even the most scrupulous, risk-averse person who sought to always be covered by health insurance under the pre-PPACA system was only a few strokes of bad luck away from being uninsured. For instance, if you developed a chronic condition in your early 20s while on a family or student plan of some sort that naturally expires or if your employer went out of business and you suddenly lose group coverage, there was no way to ensure continuity of coverage unless you were impoverished enough to qualify for Medicaid.

92 Hoosier May 4, 2017 at 11:38 am

“For instance, if you developed a chronic condition in your early 20s while on a family or student plan of some sort that naturally expires or if your employer went out of business and you suddenly lose group coverage, there was no way to ensure continuity of coverage unless you were impoverished enough to qualify for Medicaid.”‘

Exactly, haven’t heard an answer to this other than, “well, some people have bad luck and we can’t be too concerned about it”.

93 Troll Me May 4, 2017 at 12:07 pm

They will be less healthy and therefore less productive.

That’s a problem.

Also, it would be nice if they could access better health care.

94 Willitts May 4, 2017 at 8:21 am

“they will wonder whether that money should better be spent on schools, roads, and prisons.”

As they should. As they must.

95 Bill May 4, 2017 at 10:30 am

Oh, we’re going to get so much better coverage, lower premiums, lower deductibles, pre-existing conditions coverage. It’s a piece of cake.

You won’t even have to consider reducing money spent on schools, roads and prisons.

As your President, you can take my word on it.

96 Thomas May 4, 2017 at 10:06 pm

Are we going to bend the cost curve? Will you get lower premiums with better coverage with the same doctors even?!?!?!?! Politifact rated 100% TOTALLY TRUE GUYS! Chelsea/Beyonce 2036.

97 Bill May 4, 2017 at 10:14 pm

We will not only bend but we will break the cost curve,

On the backs of Medicaid,

So we can have an even better tax cut.

98 Troll Me May 4, 2017 at 12:09 pm


And so if the truth of the matter is that it could have better results for less money, then they should do it.

So they can build more schools and roads. (As the most incarcerated country on the planet, I somewhat doubt that additional prisons could offer any value.)

99 The Engineer May 4, 2017 at 9:24 am

From the New York Times column linked at the bottom:

““Most low-income people aren’t willing or able to pay much for health insurance,” says Mark Shepard, a Harvard economist and an author of the new study.

Why? Partly because people know that they have an alternative. They can instead rely on last-minute emergency-room care, in which hospitals typically treat them even if they lack insurance. Such care is problematic: It tends to be expensive, raising costs for other patients, and it’s often not as good as preventive care.”

I hate how narrative is absolutely immune to data.

Low income people “either can’t afford insurance or won’t buy it”? Isn’t that a huge difference? Shouldn’t we figure out which it is? Why are we knocking ourselves out for something that poor people don’t care about?

And we KNOW that Obamacare did nothing to lower emergency room visits among the newly insured. Here’s a clue: poor people have poor future time orientation, that’s why they are poor. They are not going to go to the doctor for preventive care, as that would be GOOD future time orientation.

And the cult of preventative care has to be destroyed. Access to preventative care does not improve health outcomes.

But hey, college educated women, don’t let these little facts get in the way of a good story. 😉

100 Lord May 4, 2017 at 10:09 am

The problem is there is no not paying for it, everything will be paid for. The choice is paying explicitly or paying hiddenly through cost shifting. Cost sharing pools do little to share costs but much to shift them to third parties.

101 WB May 4, 2017 at 10:22 am

The “limiting principle” is the wrong way to think about current health-care challenges over costs, coverage, and access.

The US spends more than enough money on health care to provide everyone with decent treatment when needed. But it cannot implement meaningful reforms because we are trapped in a lousy mixed system, with employer-based insurance on one side and heavy government funding on the other. Why are we trapped or “path dependent”? Because there are powerful interests–from the insurance and drug lobbies to the doctors and seniors groups–that act as policy monopolies, ensuring that the system never ever fundamentally changes. They pay and pressure legislators to exploit the many veto points in Congress, so that all big reform efforts die, usually at the prefloor stage. And they mobilize enough voters, at key times, to scare away legislators from contemplating real policy modifications. Then, to make matters worse, the benefits of a major policy change would likely take decades to fully observe and appreciate, but lawmakers live and die by two-year election cycles. They have, in other words, no incentives to stick out their necks for us. And we haven’t even considered yet how to settle the intractable conflict over what works better, fully private systems or single-payer models. To think the country could come to a consensus over this question is a pipe dream.

So it’s all garbage, and it will remain so. It isn’t about cost and proverbial death panels and limiting principles. It’s about entrenched interests and the logic of democratic politics.

102 Troll Me May 4, 2017 at 12:21 pm

I think you’ve hit it on the nose.

Would be nice if there was some way to frame it as other than a pipe dream …

103 Ashby May 5, 2017 at 12:59 pm

Precisely. Entrenched interest group warfare prevents progress.

Having your health insurance tied to your job makes little sense.

I work in animation. We (studio artists) work at many different studios on jobs that usually last anywhere from three months to a couple of years. Constant churn. The policy of “work one place until you’ve been there for six months before you’re covered” would result in few of us ever having coverage.

What we have instead is insurance through our guild. As long as you work a minimum of 400 hours every six months at a Union studio, you are covered. Most people, of course, work far more than that, but that bare minimum keeps people from falling between the cracks. When you work, you accumulate hours in the bank. When you have been steadily working for a couple of years, you’ll have 600 hours in the bank that you can pull from. So if you are completely out of work for six months (or working at a non-union studio), you will retain your health coverage. There is incentive to always get at least some work so you don’t burn through your hours in the bank during lean times.

Employers keeping people below 30 hours a week isn’t an issue because you get credit for work hours, how many or few they are.

The money doesn’t come from your pay check. (When I started in the business it was free. Dr’s visited, prescriptions, eyeglasses, surgeries, everything was free to the workers and it only cost 300 hours to maintain coverage with a max of 600 in the bank, so free coverage for a year. Cadillac health plan.) Of course it wasn’t actually free, in practice it meant that the studios were paying for the health costs. But some of those costs were controlled because you would go to see your Dr. at the guild clinic every year and they would then screen and/or approve for more extensive/expensive care when or if you needed it.

As a society we are paying for the health costs of those expensive ER visits by the uninsured. I honestly don’t understand why they went with a “no coverage for less than x number of hours per week” model in the ACA. Hours in the bank like the Guild plan would have resolved some of these difficulties. At a certain level, this seems like a solved problem. Was it simply so that places like McDonalds and Wal-Mart could avoid paying for the health care of their workers, shifting that cost to state and local governments?

I’m a free market guy, but the system we have in place today is not a free market and none of the policies being advanced by the Democrats or the Republicans seem to be doing much to fix the problems driving unaffordable health care. (Why does the FDA block inexpensive medicines from abroad?)

If your company is currently spending x amount on your health care, maybe that amount could go to a health savings account. You could either buy the health plan your company currently uses as the default setting OR you could go with a different plan (perhaps even medicare if the actual cost per person was competitive). That would create competition between plans and a functioning market with lots of buyers. If the government wants to subsidize health care, they could directly put money in the health savings account or contribute matching funds, something to that effect, rather than taxing other health care plans to make them even more expensive which seems to have been the approach behind the ACA.

The system we have today insane and it seems like both parties are actively trying to make things worse rather than better.

104 Floccina May 4, 2017 at 11:00 am

Because it’s easier to move states than countries the Federal can tax more, but the states do more of the regulation of healthcare, so best might be a scheme that lets the feds collect the money but the states spend the money. You might even be able to transfer all healthcare money to the states and tell that they must cover everyone or at least all those over 65 years old. Then states could try different things. Democrats keep saying that we could have coverage for everyone at half what folks are paying now so some states might opt to cover everyone with only evidence based medicine for what Fed+states spend now.

105 Viking1 May 4, 2017 at 11:28 am

Federal benefits administered by states is in many ways an antithesis to both fairness and progress. For example public housing, makes absolutely no sense in San Francisco and New York City. It makes sense that those in need be housed in tenements that occupy land that is not expensive, and benefits should not be higher just because you reside in a high cost area. The public housing in New York currently sits on land worth billions, that could be reclaimed for more productive uses.

Regarding the lossy patients, if they chose not to be insured, and have pre existing conditions, put them in the VA system, and ram down exceptions that the VA system can buy the cheapest drugs on the world market, and also the cheapest doctors above a certain quality threshold.

106 Troll Me May 4, 2017 at 12:30 pm

That would be the same as saying that cities that are the wealthiest and pay the most taxes should not receive any benefit to assist with those poor among them who struggle with the very high costs in that location.

Why should those who pay the most taxes have the least assistance in supporting those who need a hand up in their communities. I mean, they already paid for it through taxes, right?

Or does “I pay taxes” only matter when as an excuse to “do nothing”?

107 Troll Me May 4, 2017 at 12:31 pm

So apparently wealthy people in SF would rather inefficient housing markets and then as a result also more expensive social assistance.

Revealed preference?

108 The Anti-Gnostic May 4, 2017 at 1:10 pm

Prices discriminate so we don’t have to.

109 Viking1 May 4, 2017 at 4:40 pm


I don’t know if you’re making fun of me, or agree, but you perfectly described how wealthy liberals avoid having undesirable neighbors, while claiming to be anti racist.

110 Joseph Sands May 4, 2017 at 11:40 am

I read Leonhardt’s article. It does not say that people who fail to purchase insurance end up with worse health due to the failure to have insurance. Is that not the issue? What is the answer?

111 Ricardo May 4, 2017 at 12:30 pm

That’s not the only issue. What about these individuals’ credit rating, ability to save for retirement, put their kids through college and otherwise attain a middle class standard of living?

112 ¯\_(ツ)_/¯ May 4, 2017 at 12:15 pm

And please, don’t compare these marginal health care expenditures to “tax cuts for the rich”

I’m afraid I’m held back by a different prejudice. I assume bad faith. Perhaps that is unfair on my part, or perhaps my neural net is properly trained.

The David Leonhardt piece seems to confirm my dark suspicions.

113 Troll Me May 4, 2017 at 12:34 pm

You have to be well into the 1% before you’re geting better value for money from private insurance than the tax-equivalent cost of public health insurance.

Say, you’re paying $10-12k a year for health insurance for a family of four.

So, if you live in Canada, you pay maybe a few k more in taxes. But health care is included.

Which means that business costs are de facto lower, and labour more cost competitive.

114 Thomas May 4, 2017 at 10:18 pm

So 12k of care in the US costs 3k in Canada. Why? What is cheaper? The doctors? The medicine? The infrastructure? Why?

Or is that too deep for you?

115 KevinH May 4, 2017 at 12:19 pm

I think the biggest problem with this bill is that the method of it’s passing is engineered to accentuate us-vs-them and knee-jerk reactions. History is not going to look kindly on these folks, as there’s a pretty big bias in history to emphasize the rational analysis and ‘obvious’ outcomes of policy.

116 ¯\_(ツ)_/¯ May 4, 2017 at 12:20 pm

To expand on my dark suspicions, here is what really craven Republicans would do: They’d producing a plan they know is bad, a plan they know is worse than Obamacare, because it “destroys the administrative state” and puts the onus on Democrats, when they return to power, to try again .. it’s on them to solve the problem(s).

This is a parallel to Tyler’s environmental expectations. Republicans know they do things that are wrong, but they are blowing things up, preparing to re-fight Democratic solutions.

In this scenario Republicans still aren’t a party with solutions, or pragmatic plans, they are now active (and not merely gridlock) spoilers.

117 Brian May 4, 2017 at 12:48 pm

“Is it not sobering to think that if the high-risk patients are put into a separate pool, and have to ask for state-level but taxpayer-sourced money in a direct and transparent manner, the political support for that funding is not so strong?”

This sounds powerful but can’t the same be said about protecting any minority population.

And isn’t that what we’re talking about? How to fund the health care of the small minority of people who generate the majority of health care costs?

In terms of trade-off’s, I’d personally be willing to spend an awful lot to assure an unexpected illness didn’t result in my financial ruin. Most people aren’t so good at thinking through long-term questions of their own mortality and vitality. We’re all going to live forever and bad things only happen to the unwise and ill-virtued.

118 The Anti-Gnostic May 4, 2017 at 1:06 pm

This is low-hanging fruit: the first political party that can say with some credibility, “Our plan guarantees that no American will ever go bankrupt from a cancer diagnosis,” will hold power for the next 30 years. The GOP has rolled out two plans in a row that will (so I’m told) result in people falling thru the cracks. The voters look at the trillions in taxes and wonder what’s the justification for anybody falling thru the cracks. And all Elizabeth Warren has to do is find a few of them and put them in front of a camera and Republicans go back to being the minority party forever.

119 ¯\_(ツ)_/¯ May 4, 2017 at 1:44 pm

” .. and Republicans go back to being the minority party forever.”

This was supposed to be the Flight 93 election. Perhaps. But at some point the roles reversed. The GOP act like the terrorists who know they only have the plane for a few more minutes. They are not doing the things they should do to win re-election on solutions, performance, governance.

120 Mcmike May 4, 2017 at 9:28 pm

I think you are wishfully thinking here.

At this point, one party could give the entire nation $20,000 each and a pony, and half the nation could be convinced to complain bitterly.

Hell, so many of us have gotten perfectly used to all that yellow rain falling on their heads, they’d probably be unhappy if it stopped.

121 The Anti-Gnostic May 5, 2017 at 8:26 am

LOL. Y’all aren’t helping my mood.

122 Mike May 4, 2017 at 1:08 pm

We have a health cost problem that will not be solved working around the edges of health insurance. Health care needs to be delivered more efficiently, effectively, and rationally. I believe competition would help but I would love to know what Dr. Cowen thinks.

123 Harun May 4, 2017 at 2:26 pm

‘Member when Obama did high risk pools?

I ‘member.

Then the wonks liked them.

But only 107,000 signed up.

Apparently not that many people are willing to pay for their own healthcare.

“Very expensive.” Yes, they are “very expensive.” And if you push those people into the market, it just makes my healthcare “very expensive.”

ACA doesn’t “solve” these problems. It just mushes and pushes costs around.

If you want to make pre-existing conditions cheap, you need a brutal mandate. Obama wouldn’t do that. It would hurt his peeps. So, we copied Switzerland but not the 8% of income rule, or the garnishing of wages by insurers to force signing up.

Progressives need to admit that they needed to be harsher. No fair whining about the GOP now. You had your chance, and you were just as fake as the GOP is now.

124 ¯\_(ツ)_/¯ May 4, 2017 at 2:41 pm

Was it Douthat who wrote that the bright side to Trump is that he destroys alt-right fantasies?

Repeal, if it happens, will do the same thing. It will not result in new mandates, new risk pools. Obama’s accommodation with market solutions will be gone, and millions of horror stories will emerge. For that reason:

Repeal will result in a public option within 10 years. Medicare for all, whatever.

125 ¯\_(ツ)_/¯ May 4, 2017 at 9:43 pm

Wow. Twitter is just now exploding with “this makes single payer more likely.”

Of course, this argument might lead the Senate to pick Obama care over some future public option.

126 Bill May 4, 2017 at 7:56 pm

Harun, Evidently you do not understand the difference between a high risk pool and reinsurance.

127 Mcmike May 4, 2017 at 3:19 pm

These are not “pools”, They are quarantines.

Carving them out assures failure. By definition and design.

The only free lunch on the table is free lunch for insurers. Who seek to turn their product into a simulacrum of insurance.

Turn insurance into not-insurance

128 Mcmike May 4, 2017 at 8:26 pm

What 90% of the libertarian/right-wing risk-pool whiners don’t understand is that if they live just about anywhere in a red state, the only reason they have electricity and phones and flush toilets is because big bad Uncle Socialist forced the companies to do it, and forced the rest of the nation to subsidize it.

The only thing new about the insurance companies trying to get out of providing insurance to people who might actually use it, is that we have descended to a level of corruption and ignorance that we are letting them get away with it.

What these blindered fools also don’t get, when they bitch about paying for people who already have known issues, is the near certainty that they too will end up becoming net-utilizers themselves in their old age. Unless they die early from lack of access to health care.

129 byomtov May 4, 2017 at 3:50 pm

is “let’s have a democratically elected state government decide how much to subsidize medical care for those with preexisting conditions” such a morally outrageous view? I guess it is these days. The simple but underemphasized truth is that under the new bill state governments can spend as much as they want on high-risk pools.

Yes. It is outrageous.

To argue that the choice is between yellow fever and new schools is disingenuous. It’s not. It’s between people dying, needlessly, of cancer, and not offending wealthy contributors.

We have seen, as an empirical fact, in the Medicaid expansion case, that tree are many state legislatures who simply don’t care a fig for helping poor sick people, even when it is extremely cheap. Why would they behave differently here?

Second, a state that tries to be generous runs the risk of attracting migrants from the “who cares” states, so pretending these decisions are independent is silly.

Finally, when you can say, with a straight face, that poor sick people have as much political influence as rich healthy ones, especially at the state government level, I’ll listen.

130 Mcmike May 4, 2017 at 8:29 pm

The big question is: will the GOP Congress exempt themselves and their staffs from the law?

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