Pre-existing conditions

I've read that the Democrats are stressing this idea more in their arguments for the health bill.  Oddly, even from intellectuals, you rarely hear what is one of the strongest arguments for the bill, namely that personal genome sequencing might mean — how many years from now? — that many more people have pre-existing conditions than we currently are aware of.  Alternative equilibria are that the sequencing technology won't give us much health information, that the information will stay private (don't accept that cup of coffee!), or that we should in the meantime simply wait.  There's plenty to debate there but I'd like to see more discussion on the long-term future of the health insurance sector or possible lack thereof.

On related issues, Ross Douthat wants a smaller bill:

But even as a hypothetical, the more modest plan is instructive. Per the Journal, it would insure half as many people as the House and Senate bills – 15 million, all told – at a quarter of the cost. 15 million happens to be roughly the number of American citizens who don’t have insurance, aren’t already eligible for Medicaid or S-CHIP, and make less than 300 percent of the poverty line. Which suggests that you can do some of the most morally urgent work of health care reform without a mandate or price controls, and at a fraction of the current legislation’s price tag.

Jon Chait has an exasperated response.  First, the importance of that extra coverage, as would result from the mini-plan, he is suddenly downgrading in the grand scheme of things.  Second, and more fundamentally, I'd like to repeat, and modify, an earlier question.  I understand that the mini-bill does relatively well by "almost Medicaid" patients and relatively poorly by those with pre-existing conditions.

Compare the full bill to the mini-bill.  For the extra insurance coverage granted by the full bill, some of which goes to individuals with pre-existing conditions, how much are we paying per person for that coverage?

Much better (but harder) would be to see how much extra we would be paying for the coverage each additional person, conditional on that person wanting the insurance at the price he or she would have to pay for it

A third and related approach is to assume that consumer surplus, from the mandate/subsidy mix, is small for those individuals without pre-existing conditions.  Take the extra expenditure and divide by the number of people with pre-existing conditions who now fail to get coverage.  What is the cost per uninsured person with a pre-existing condition?

If you, as a supporter of the full bill, want to change people's minds, those are some critical numbers.  For all the work that has been put into this legislation, it doesn't seem unjust to be asking for that hitherto unprovided information.  The "it's too late to turn back now" argument doesn't much sway me.  Nor does Chait's claim that by passing the mini-bill we would be foregoing a "transformative" moment.  If the core of the full bill doesn't make sense, the entire structure won't hold up on its own.

The numbers, please.

Comments

Will they admit that there is a competitive component? If everyone gets on their feet at the football game everyone's experience may improve but noone's view is any better.

We will push the uncertainty back to before conception, so we will eventually need sequencing that informs parents of their probabilities of conceiving of children with genetic issues. If they do this with eyes open, why should everyone else pay for the entire bill of medical treatment resulting from it? Insurance is for the uncertainty component and that can be moved, and in moving it we provide information. Bailouts for taking known risks is called charity.

In addition, the notion that numbers and rational argument have anything to do with whether or not the bill passes is absurd. I find it hard to believe that members of congress know or care about these issues, especially after hearing the things said at the healthcare summit.

uh, micro-facts? they sound more like rationalizations (similar to 'financial innovation') "American's high expenditures, however wasteful they may be, nonetheless drive much of the world's medical innovation." numbers please...

How about instead of making the insurance companies pay for preexisting conditions, we make them pay for postexisting conditions. They're responsible for any condition I develop posterior to my canceling the plan. I'd much rather have coverage for postexisting conditions than preexisting conditions. But that's probably because I don't have any existent conditions that would preexist any insurance I may buy. Too bad you can't insure against preexisting conditions. They seem like awful things to pre-have.

The critical problem is that I have a great deal of trouble taking this cavalcade of "alternatives" seriously. It seems that well meaning conservative intellectuals (what few there are left) are simply offering up various plans which they feel are better than the health care bill and justifying opposition on the basis of the nominal existence of those plans. Every bill which makes it out of committee and past both houses of congress will contain compromises, foolishness and inefficiency. We should not be made complacent to that fact but coming along a year into the process and demanding that the bill measure up to an alternative that exists only in Meghan McArdle's mind is not the opposite of complacency.

And unfortunately for those few intellectuals proposing alternatives in good faith they "happen" to coincide with a furious spree of demands from less trustworthy sources that the bill be "scrapped and started over", a desire so nakedly tactical that I have difficulty listening to it without chuckling.

Another point to remember is that the $950B cost to the government isn't all used to buy people health insurance. A significant portion of it pays for subsidies to people who already have insurance (or already would have had insurance) and don't make a ton of money. That helps those people not have to spend too much of their income on health care, and phasing out the subsidies gradually up to 400% of the poverty level prevents there from being huge spikes in the implicit marginal tax rate like there are at the cutoffs for Medicaid and S-CHIP, but of course it's going to make the numbers look worse if you just divide the total cost by the number of additional people being insured.

It's sort of like the stimulus bill, where some people are dividing the total cost by the number of jobs created, ignoring the fact that hiring bridge builders also gives you a bridge, that extending unemployment benefits helps the jobless deal with the bad economy, etc.

If the Democrats want SOMETHING, and keep shifting their ground, and ignore serious economic arguments, and avoid genuinely useful policies -then it must be obvious that their motivation isn't really the improvement of health care financing at all but something else. And I think their real goal should be pretty obvious to any open mind.

LOL! We all have a preexisting condition- thing that will kill us.

"In fact, it's cheaper because most of the people it would cover are children and young adults, who are inexpensive to cover."

Ahhh, progress. Next step. Will they realize these are the people they are trying to make pay.

Bill, your thing only works if there is ONLY uncertainty and not to cover things that are largely based on risk and behavior.

Bernard, huh? People only have to make a case for something if there is an alternative on the table? I wish that's how politics worked, I've always thought Robert's rules of order were the mass production system for bad ideas, but alas, politics wasn't invented by economists.

A tangential but related question: given the lemons argument, and as more information becomes available in all areas of life, will the broader insurance market dwindle away altogether?

If we all had perfect information, many forms of insurance should disappear - especially those with a moral hazard component. Insurance would just become a way of putting a price on the endowments we start out with - and maybe in the health system, we'll end up with direct transfers to those with negative endowments from the rest.

But this is all theory - in the real world, have we ever seen an insurance market completely disappear due to more information becoming available? I suspect we're close to that in the UK with dental insurance - but then again, we have no clear comparison due to several decades of public provision which has now been mostly withdrawn.

personal genome sequencing might mean -- how many years from now? -- that many more people have pre-existing conditions than we currently are aware of

I've been assuming that GINA (the Genetic Information Nondiscrimination Act) would prevent insurance companies from taking personal genome information into account. I haven't read the act in detail, though.

Andrew,

People only have to make a case for something if there is an alternative on the table? I wish that's how politics worked,

There have been many numbers presented concerning the actual proposal. What Tyler appears to be asking for is numbers that show how the proposal differs from the mini-bill. It seems to me that it is mini-bill supporters who have the responsibility to make their case - to show why it is superior. It is unreasonable to think that, if you dislike the current bill, you can generate an endless stream of alternatives and demand that others analyze each of them in comparison to the actual proposal.

Further, I think that, as a simple matter of good-faith negotiation, you must commit to supporting your alternative, and show that it is realistic politically. This is not an academic exercise. It's not a business or public policy school assignment. It's actual legislation.

If the mini-bill were introduced Monday, would you support it? Would Tyler, or Douthat? I don't know, but if the answer is no why should anyone care about these demands?

Bernard - I think you're forgetting who's actually winning this debate - this circus isn't still going on because reform promoters keep piling on more-and-more reforms - it's the other way around. The default expectation right now is no bill at all - so I think if the reformers don't start seriously answering the challenges from the Tylers and McArdles out there, they're finished.

ziel,

I think you're forgetting who's actually winning this debate - this circus isn't still going on because reform promoters keep piling on more-and-more reforms - it's the other way around. The default expectation right now is no bill at all - so I think if the reformers don't start seriously answering the challenges from the Tylers and McArdles out there, they're finished.

I don't know who's winning the debate. Polls seem to show that "the reform plan," is not that popular, but that its features are. Go figure. I do know that convincing Tyler the proposed legislation makes sense isn't going to improve its chances, because I don't think the political opposition is particularly honest, or much interested in discussion of the details.

That doesn't mean no opponents are serious, or that there aren't sensible issues to be raised. It just means that if I go spend a month looking up numbers and doing spreadsheets and whatnot, and send the results to Tyler, and thereby convince him the plan makes sense, that's not going to improve its chances one whit.

And even serious people have to acknowledge a stopping point. You can raise questions and propose alternatives forever. But, as I said, this is not a health care policy seminar.

Andrew,

You are correct it's not yet "actual legislation." What I was trying to say was that our discussions have to be realistic - we have to realize that the decisions made will affect an awful lot of people.

No. It's a mug's game. You are asking reform supporters to bid against themselves.

Wow, "reform supporters" should just Rahm it through right? Because their good intentions are so good, moral and just.

Had conservatives actually engaged in the legislative process in good faith, they probably could have lowered the cost/scope of the bill: if Democrats have shown one thing, it's that they'll give up on their most basic principles in their desperate desire for the love and friendship of their colleagues on the other side of the aisle, who have shown over and over that their only desire in life is to urinate on President Obama's shoes, blame him for their failures, and use that to regain a majority.

Sorry, time's up. If the economists can get Congressional Republican to start acting like adults who care about the nation's problems--and we would all appreciate that, any time it could happen--now's the time; otherwise, it looks like the grown-ups are going to move on without them.

Just a note from the land of biology: It's not personal sequencing we're waiting for, it's simply knowledge of enough firm genetic linkages to diseases to make a micro-assay plate worthwhile. It isn't necessary to sequence a whole genome to find out if the person in question has a known gene variant. Give me a sequence for the gene, and a cell sample and I can do that in 2-3 days. All of the technology necessary to make a test that will determine if you have genes that contribute to any chronic conditions already exists, and is relatively affordable. As to why none seems to exist yet, I have no clue. But the technology is most certainly there.

Yes, Elliot White is right that there hasn't been much progress over the last decade toward finding new genetic pre-existing conditions for major diseases. A lot of money has been spent toward that goal, without much payoff yet. Perhaps, as Matt Ridley pointed out, your genes didn't evolve in order to kill you.

Dan H.,

True. But the broader question is hardly going to get a particularly accurate answer. Those polled are in fact unlikely to be familiar with what the bill contains. This is all the more so since there has been a sustaind disinformation campaign about "death panels" and "govt takeovers" and "socialized medicine," and so on.

So it doesn't seem worse to ask about specific features.

I do agree that polling on a complex legislative proposal, nomatter how done, has lots of pitfalls.

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