Health insurance and mortality follow-up

On health insurance and mortality, you'll find Megan's further thoughts (which I agree with) here (and now here).  Neither of us is saying the real net effect is zero.  Also check out Matt, Ezra, Austin Frakt, all of whom make good points. 

Overall I'd like to see more numbers in the health care debate.  If the Obama plan spends $90 billion extra a year on coverage and saves/extends 10,000 lives a year (a plausible estimate, in my view), that is $9 million a life, a rather underwhelming rate of return.  That's a very gross comparison because life extension is not the only benefit and the $90 billion is not the only cost.  Still, as a starting point for analysis I don't think it makes the plan look better.  Keep also in mind that many of the newly covered people are bumping others back into the queue, since the overall supply of medical care isn't going up and may even be declining.

If you did a simple cost-benefit comparison, the Obama plan vs. a simple extension of Medicaid, more R&D through the NIH, and some targeted public health expenditures, I believe the latter would win hands down.  And the latter seems more politically feasible too.  It avoids the mandate, the unworkable and ridiculously low penalties for those who don't sign up for insurance, and the awkwardly high implicit marginal tax rates imposed by the subsidy scheme.  It probably involves fewer corporate and "back room" deals.

In its favor, the Obama plan makes it easier to become an entrepreneur without losing health insurance coverage.  I doubt if that's enough to swing the balance, but in any case it's worth thinking about.  

Please don't argue that the Obama plan saves money.  Even if you believe that (I don't), here we are talking about the marginal impact of one subcomponent of the overall plan.  That subcomponent does cost money.

When it comes to the Obama plan, the easy targets are stupid or hypocritical Republicans.  The hard target is why the plan should beat the alternative reforms I've outlined above or perhaps other ways of spending the money.  I'd like to see more people take on the hard target rather than the easy.


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