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December 15, 2006
Lean On Us, When You're Not Strong...
H.G Stern at InsureBlog has a problem with the Wyden proposal:
First, it relies on a model called “Community Rating.” Basically, CR is the health insurance equivalent of “pay at the pump” auto insurance. It sure sounds nice: everyone pays the same rate, simple to administer, universal coverage (every car needs gas, right?). The problem is that not every car is the same, and not every driver has a flawless record. Same with health insurance: absent underwriting, folks who routinely run (and win) 26 mile marathons would pay the same as obese folks with diabetes. Thus, everyone ends up paying more.
Yikes -- that's quite wrong. For instance: The obese folks with diabetes end up paying quite a bit less. So do those who were once on antidepressants, or had hypertension, or were born with asthma. Community rating, where everyone pays the same, is a way of correcting for luck. That's not to say it doesn't end up flattening out virtue, at least to some degree, but the question is whether you think using the health care system, in general, is evidence that you're a bad person or had a health problem.
So let's, for instance, take the marathoner. You have any idea what Speedy McVirtue over there is doing to her knees? It's a wonder those things still bend. In a couple years, they may well not. Or she may step in a pothole, shattering her ankle. And it turns out marathon running can be dangerous for the heart -- shall we raise the premiums?
In other words, eventually, she'll be using the health care system too. If she has to pay a bit more in her years of good health, it'll keep her from paying far more than she can afford if things take a worse turn. Community rating, where we all share the risk for each other, admits that we don't have full control over these imperfect, glitchy machines we inhabit. Sometimes the failures are our fault; sometimes they're acts of God, or drunk drivers, meteorites. But we all have our flaws, and everyone eventually turns to Lady Luck only to see her frown. Community rating recognizes that, the current system denies it. I know which I prefer.
December 15, 2006 in Health Care | Permalink
Comments
Maybe people will finally start to understand this now that it's coming from the front page (instead of from some crank in the comments).
However, given the high levels of self-satisfaction some commenters have, I doubt it.
Posted by: Stephen | Dec 15, 2006 4:35:05 PM
Just out of curiousity, would smokers pay the same as non-smokers? Do they with private health insurance? Because unlike non-runners vs. runners, there isn't a luck element present, discounting any inherited X factor that makes one more likely to become addicted to nicotine. Moreover, being a non-smoker does not come with its own specific set of risks the way running does (knee injuries, hip ailments, etc.)
Smoking, though, has been proven over and over again to correlate with vastly increased incidences of heart disease, cancer, and all manner of other ailments we surely know by heart at this point. And insofar as I'm aware, smoking has no positive health benefits.
Posted by: litbrit | Dec 15, 2006 4:38:29 PM
Sorry, I meant to say "...unlike diabetics vs. non-diabetics in the third sentence above.
Posted by: litbrit | Dec 15, 2006 4:41:26 PM
I'm becomming convinced that the term 'community rating' is more confusing than helpful since it implies rather small groups (communities rather than cities or counties, etc.).
A far more helpful term is, IMO, 'risk pool'. It is very easy for folks to understand that the larger the people in the group, the less the group will reflect a mal-distribution of people with above average risk. The bigger the risk pool, the better. The best risk pool for the US would be the entire US. Next best would be areas of the country (pacific northwest, new england, the south, etc.). States are likely to be the risk pool for a plan like Wyden's, but for small states that risk pool is very small (SD, MT, ID, etc.).
However many of the questioners of the Wyden plan assume community rating means community, and that would be a very bad solution, for soon the suburbs would be cheap and cities very expensive.
So, can we stop calling for community rating, and start calling for large risk pools? This IS insurance, and what is being insured is risk.
The young and (suppossedly) healthy will complain about being in a risk pool, but they don't really understand the concept of insurance for unknown risks when applied to themselves instead of loss of physical property (fire, flood, weather, etc.). We need more education about the advantages of risk pooling for everyone.
Posted by: JimPortlandOR | Dec 15, 2006 4:45:21 PM
There's also a factor of: sometimes when you avoid treating the smaller conditions, they will compound, or lead to susceptibility to other conditions, or just plain worsen. Trying to punish people for using health care to get healthier is actually pretty counterintuitive when you think of it.
Posted by: Amanda | Dec 15, 2006 4:53:42 PM
Yeah, I was going to post over at InsureBlog about this, but every time I try to get into this discussion with him, he comes back at me with a argument I still don't understand about how sharing risk and sharing bad luck are not the same thing. I don't know, we went back and forth a few times and I still don't see the distinction.
In any case, the communities are currently planned to be state-wide as far as I know, and the only way they're going to differentiate on premium prices is by benefit package, community, and smoking status. So yes, they will charge smokers a different amount.
Posted by: spike | Dec 15, 2006 4:58:58 PM
"So let's, for instance, take the marathoner. You have any idea what Speedy McVirtue over there is doing to her knees? It's a wonder those things still bend. In a couple years, they may well not. Or she may step in a pothole, shattering her ankle. And it turns out marathon running can be dangerous for the heart -- shall we raise the premiums?"
Oh Lord, where to begin?
1.) Marathons are 26.2 miles, not 26 miles. And it's redundant to say "26 mile marathon" (or more accurately, "26.2 mile marathon")--it is understood that when you refer to a running race called a "marathon," that race is 26.2 miles. And yes, I realize this is from a quote and not Big Media Ezra.
2.) The whole bit about marathons and bad knees is a myth. I am not aware of any studies that conclude that marathoners, all things being equal, are at risk of permanent knee injury--to the contrary, marathoners seem to have a reduced risk of osteoarthritis (which includes most degenerative knee problems). I am vaguely aware of a few studies that suggest that endurance running can cause chronic inflammation in joints that have suffered a prior traumatic injury, but that seems to be such a small subset of marathon runners that you would think that you could address them on an ad hoc basis (i.e., if you blew out your knee playing football in high school, you need to consult your doctor and take various prophylactic measures before taking up marathon training in your 40s).
3.) The whole heart thing is a huge misunderstanding. It is absolutely true that you generally see an increased risk of heart attack/failure while running long distances--but this risk is only medically significant for those people with preexisting conditions! And for EVERYBODY, endurance running decreases the annual risk of heart attack/failure! So what does that mean? If you are at substantial risk of having a heart attack AND you're a runner, you'll probably have the heart attack while running. HOWEVER, running won't make people who wouldn't otherwise have a heart attack have one, and it generally decreases your risk over the next year of having a heart attack. Thus, the guy with a preexisting heart condition who dies jogging at 54? The fact that he was a runner probably bought him an extra 10 years, although it probably was what made him have the heart attack that particular morning (as opposed to sometime over the next two months).
Look, marathon running does entail some risks. First, very recent studies have shown a substantial increase in the risk of skin cancer, for obvious reasons. Second, most people see a significant decrease in their immune system after runs of two hours or longer, especially in cold weather--hell, I picked up a nasty case of pneumonia last winter training for (and running) Boston. Then there's the plantar fascitis, stress fractures, run-of-the-mill tendonitis, and other wear-and-tear aches and pains that most marathoners have to battle through while training. But unbendable knees and heart disease aren't among the risks.
Joe (5 marathons run, PR of 2:58).
Posted by: Joe | Dec 15, 2006 5:12:45 PM
While insurance certainly shouldn't punish people for bad luck or bad genetics, it does seem a bit wrong to essentially require everyone else to subsidize the risky choices of someone else. If it's okay to charge smokers higher premiums, why wouldn't it also be appropriate to have higher rates for, say, the morbidly obese, or users of other recreational drugs?
Posted by: George Tenet Fangirl | Dec 15, 2006 5:20:14 PM
Uhhh, Joe. Your last paragraph really reinforces Ezra's point. You're disagreeing over the hole instead of the doughnut. The issue is medical costs. Whether a marathoner accesses the healthcare system over knees and heart or tendonitis and skin cancer, the money is just as green as if it were reimbursing for a couch potato with acquired diabetes. That's where Ezra was going with it, and I think you proved him right.
Nice PR, though.
Posted by: Rick | Dec 15, 2006 5:38:42 PM
I nominate G. T. Fangirl for a risk pool of one: herself.
Self-insure yourself. Don't forget to put aside enough money to cover the most expensive set of medical procedures you are EVER likely to incur.
If each possible current or future medical condition is pulled from the risk pool, then the risk pools will only include those who are both genetically endowed to be healthy or who lie about their current status. Would Fangirl like to have monthly/quarterly drug screen run on her to make clear that she hasn't slipped into the recreational drug group and screwed up her risk pool? And don't forget the monthly weigh-ins to prevent weight build-up to mess up the pool.
Posted by: JimPortlandOR | Dec 15, 2006 5:40:04 PM
Two things:
1) Community rating works only with the mandate for participation. Without it, it's useless. I know the Wyden plan has that element to it, but not mentioned above.
2) Heart disease, forms of cancer, and diabetes all have very strong ties to lifestyle issues. Bad luck plays a part, but we are pulling the collective trigger ourselves.
Posted by: Alex | Dec 15, 2006 5:42:07 PM
Jim, I might well be okay with a risk pool of "everyone, without exception" but that's not what this plan involves. What reasons are there to (price) discriminate against smokers? And why would those reasons not also serve as reasons to discriminate against other groups?
Posted by: George Tenet Fangirl | Dec 15, 2006 5:44:38 PM
I wasn't taking umbrage at Ezra's conclusion(which I generally agree with)--just his (possibly sarcastic) denegration of marathoning as something that too-good-for-themselves uppity-ups do until they get their comeuppance and can't walk because of their bad knees. Or have a heart attack.
And thanks on the PR. I was a 4:29 mile/15:30 5000m middle distance guy in high school and college, then took close to 10 years to get fat and pick up a pack-a-day habit, then decided to get back in shape and do something I loved. I've only been running "again" for three years, racing for two. I was training for a run at sub-2:50 in January, but a severe stress reaction (at least I avoided a fracture) cost me six weeks off and another six of light running. Meaning that next fall is the next time I realistically could try for a serious race.
Posted by: Joe | Dec 15, 2006 5:50:03 PM
[Some forms of h]eart disease, [a few] forms of cancer, and [Type II] diabetes all have [statistically significant] ties to lifestyle issues. Bad luck plays [an enormous] part [in almost all cases (e.g., only 10% of smokers develop lung cancer)], but we are pulling the collective trigger ourselves [in those minority of case].
(Above quote corrected to make it accurate.)
Posted by: Joe | Dec 15, 2006 5:57:48 PM
Bad luck is what happened to my best friend Cynthia. She was a vegetarian, non-smoking, slim, exercise fan (running, treadmill, gym, you name it).
The bad luck was that she worked for a law firm that did not offer health insurance to its secretaries.
At age 37, after a few weeks of what she thought was stress-related acid stomach, she wound up in the ER where the doctors found a tumor on her pancreas. They operated and sent Cynth home with Hospice's phone number. When she died, just ten days after the shocking diagnosis, the hospital sent her mother a bill for over $80K.
We need universal health care. We all do--runners, smokers, vegetarians, Prozac-poppers, and carnivores alike. Enough already.
Posted by: litbrit | Dec 15, 2006 6:23:50 PM
litbrit, that is an awful tragedy. but your friend's mother is not liable for the bill. (my family went through something similar.)
while your friend's mother may feel some ethical obligation to pay something, she cannot be forced to. her daughter was an adult and liable for her own debts, which roughly speaking do not get assumed by one's parents after you're 18.
Posted by: chris | Dec 15, 2006 6:52:44 PM
JimPortlandOR, said:
"The young and (suppossedly) healthy will complain about being in a risk pool, but they don't really understand the concept of insurance for unknown risks when applied to themselves instead of loss of physical property (fire, flood, weather, etc.). We need more education about the advantages of risk pooling for everyone."
The young understand perfectly well that it is not to their advantage to be put in the same risk pool as old people for medical insurance. Now if we were talking auto insurance that would be different.
Posted by: James B. Shearer | Dec 15, 2006 7:39:38 PM
Just out of curiousity, would smokers pay the same as non-smokers? Do they with private health insurance? Because unlike non-runners vs. runners, there isn't a luck element present
Presumably the smokers would pay for their additional health care costs via taxes on cigarettes.
Also, saying that marathoners don't have knee problems is sort of self-selecting. If you've gotten to the point where you're in shape enough to run a marathon, odds are it's because you didn't develop knee problems during the training stage. It's the non-marathoners or marathon-hopefuls who have to see the doctor about what to do about their knees.
Posted by: Constantine | Dec 15, 2006 7:42:16 PM
Shorter nearly everyone:
God forbid someone, somewhere, I wouldn't like if I met is spending what was, and ought to still be my money.
Posted by: Davis X. Machina | Dec 15, 2006 8:40:56 PM
Community rating doesn't exclude the option of discounts for healthy behavior (as opposed to healthy luck). That would be a sensible part of any plan, I should think.
Posted by: Sanpete | Dec 15, 2006 9:25:19 PM
As someone with a chronic illness (arthritis) I'm totally in favor of community rating. Why? It's not for completely self serving reasons. I've purchased comprehensive health insurance for myself since I finished college at 22. I doesn't seem fair to me that now, 20 years later, I can't buy insurance at all unless I have a job. Until I was 40, I was healthy as a horse. Today, I use a lot of expensive drugs and have frequent doctor visits.
Community rating is recognising that it's really mostly luck, and that there's no way to know what's going to happen to you in the next 15 or 20 years. I'd be interested to see a poll of poeple who are so rabidly anti community rating 20 years out. I don't imagine some of them would still hold the same views.
Posted by: Jaye | Dec 15, 2006 11:08:44 PM
Fundamentally, once you accept the concept that people have a right to health care, then national health insurance is an inevitable consequence of that.
The loony libertarians will openly say there is no such right, and that hospitals should be allowed to let people die in the streets if they can't pay for treatment. 90% of the American public disagrees with that, which is why we have laws saying that the ER has to provide emergency care to anyone whether they can afford it or not.
But, once you've conceded that everyone should get the health care they need, then insurance companies and their complicated buck-passing schemes become nothing more than unnecessary overhead, wasting money that should be spent on actual treatment instead. Insurance companies make money by collecting premiums and trying to do whatever they can to avoid paying out claims. This behavior has no social value, so the existing model of insurance is worthless and needs to be dismantled. And the public reputation of insurance companies is low enough that I'm not at all sure this is politically impossible to do.
Perhaps national insurance, whether done by community rating or some other method, would give a relative advantage to older Americans compared to the young. But so what? The moral impact of this is substantially blunted because the elderly and the young are not two separate groups of people, but the SAME people in different stages of their life.
Posted by: Firebug | Dec 15, 2006 11:40:05 PM
All right, I'm sold on Wyden. I mean, not really from a policy perspective, but its basically better enough than the SQ.
Pass it, and then we can all start clamoring for single payer, and no one can accuse us of displacing more feasible and moderate alternatives.
Fair enough?
Posted by: R/W | Dec 16, 2006 12:46:10 AM
In UHC, It would be soemwhat easier to solve the problem of smokers and drinkers, in the risk pool. Simply add a tax to tobbaco and alchohol products, strictly to offset healthcare costs related to drinking and smoking. Legalising most illicit drugs and similarly taxing them solves another. The real problem is coming up with a "fat" tax. Taxing "junk" food would be handy, but thus defining "junk" food, in a legal sense would be very difficult. I even think such taxes could possibley be integrated into a plan like Wyden's, but it really would be ideal for UHC. Pay as you play.
Posted by: DuWayne | Dec 16, 2006 1:13:23 AM
Firebug said:
"Perhaps national insurance, whether done by community rating or some other method, would give a relative advantage to older Americans compared to the young. But so what? The moral impact of this is substantially blunted because the elderly and the young are not two separate groups of people, but the SAME people in different stages of their life."
So how about we only charge people over 40 and give care to young people for free since they don't need much anyway? This might seem unfair to old people but it really isn't since old people and young people are really the same people in different stages of their life.
Charging young adults the same rates as older adults has nothing to do with fairness or morality but would simply reflect the fact that older adults have more political power than young adults. Political power that they have already used to rig the system in their favor in numerous ways.
Posted by: James B. Shearer | Dec 16, 2006 1:41:43 AM
There's a lot of fat bashing going on here and I feel compelled to make a couple of counterpoints. Do you folks really, honestly think that morbid obesity is strictly a behavioral issue? You are all smart, socially conscious readers and I'd like to challenge you to do some critical examination of your thinking on this subject.
Some excerpts from a recent post on obesity from my site:
Society has done a great job of conditioning us to believe that only thing standing between morbidly obese people and a normal weight is their shortcomings in character. Part of my reason for writing this is to help you see that and understand that maybe, just maybe, those perceptions are about as medically valid as the idea that epilepsy is a form of demonic possession.
The medical community is slowly realizing two things: First, that treating obesity has a huge impact on both quality of life and controlling the costs of healthcare by forestalling that literal death-spiral of co-mordid conditions caused by morbid obesity. And second, that successful lifelong treatment requires approaching morbid obesity as a serious condition whose with both medical and behavioral components.
I'm not trying to excuse the marginally overweight population who overeats and doesn't exercise, but I do think it's important to recognize that most morbidly obese people have something broken in their wiring and it would be more enlightened of you to treat them with the same dignity, respect and compassion you afford to people afflicted with other conditions.
Under the type of system proposed here, we might actually make real progress in identifying and treating people with the propensity for morbid obesity earlier in childhood and help them avoid the misery of this condition.
Posted by: LanceWeber | Dec 16, 2006 1:54:50 AM
no, some morbidly obese are just douchbags. some skinny people are lucky. but most people are fat out of lazyness, adn skinny from hard work.
Posted by: dan | Dec 16, 2006 2:55:30 AM
When the Americans With Disabilities Act was written, obesity was specifically excluded as a disability.
Posted by: beowulf | Dec 16, 2006 4:19:50 AM
Shorter nearly everyone:
God forbid someone, somewhere, I wouldn't like if I met is spending what was, and ought to still be my money.
Unless, you know, it involves stuff that goes fast and kills brown, funnily-named people.
Posted by: Phoenician in a time of Romans | Dec 16, 2006 6:31:07 AM
The basic concept for "insurance" is to gather as many young healthy people into the "pool" to pay for the older sick people. If you cut out the young healthy people there is no one generating the insurance payments to pay for the sick. Risk pools are advantageous to private insurance companies because they cut out the sick, thru various "risk" strategies, and keep all the unused healthcare dollars from the healthy. For insurance of any kind to work for the consumer, you've got to get the healthy and the sick into the same pool. Today private insurers take all the young healthy families and when you turn 65, they dump you on Medicare. Consequently they don't care if you diabetes is adequately treated, because by the time you lose a leg, need dialysis, get blind, have a stroke or heart attack - you'll be Medicare's problem. Consequently, they don't pay for aggressive treatment of medical problems that would keep you from developing long term health problems, because later in life you'll be another insurer's problem. Universal coverage, not for profit, would utilize those billions in profits now going to CEOs and CFOs and board members, and use them for actual medical care.
Posted by: bones | Dec 16, 2006 7:38:56 AM
Community rating doesn't exclude the option of discounts for healthy behavior (as opposed to healthy luck).
My problem here is that these things are practically impossible to separate, as a matter of policy.
For instance, smoking is significantly correlated with social class. NIH study:
Overall, the prevalence of current smoking was greatest among persons in—and independently associated with—working class jobs, low educational level, and low income. Attempts to quit showed no socioeconomic gradient, while success in quitting was greatest among those with the most socioeconomic resources.
So, giving a discount to non-smokers is also, at a certain level, giving a discount to the upper classes.
I'm not saying that people aren't responsible for their choices. At an individual level of ethics, I can see the case. But at the aggregate level of policy, I think the impossibility of sorting out what is really free choice - or, better, the fact that our choices are always cultural constructed, makes these sorts of rewards for good behavior inevitably self-defeating.
Universal insurance needs to be truly universal. This was the rallying cry in the social security debate, and it needs to be kept intact for the health insurance debate.
Unless the Wyden plan has some way of funding the smokers charge that isn't effectively the creation of a regressive tax, I don't like the idea of sticking in good / bad behavior clauses.
Posted by: DivGuy | Dec 16, 2006 9:06:20 AM
I've read countless comments that cast this whole debate into "young" vs. "old". I'm a young guy (28 now) and pretty healthy, so I rarely need to use the health insurance I have through my work. That said, I do support the concept of the Wyden plan, or other plans that seek to do something similar.
I think that the older people need to stop being so dismissive of the younger people-- there IS a valid complaint there in that, assuming this system has been more or less the same 20-30 years ago, older people have had the benefit of taking advantage of lower rates (or not having health insurance at all) and using that extra money to, say, invest for retirement or other things. Thus, the gist is that younger people may feel that older people are getting a better deal than younger people since they were able to benefit from a system when they were younger where they paid a lower cost, then when they transitioned to a greater age, if the Wyden plan goes into effect, then they benefit from a system where they are able to cut their costs while older. Essentially, much of the money paid on health insurance for this particular generation gets moved onto either the generation before or the generation after. The generation before is, for the most part, not around to complain anymore, so... in any case, this assumption may not be valid, so the older people commenting may want to clarify rather than being stereotypical old people. :-)
That said, no matter what sort of system we implement to start rectifying the problems of the current health insurance system, something like this is inevitable because we are trying to move from a broken health insurance system that encourages this kind of distribution to a health insurance system that works.
Bottom line, sniping at each other across generational divides isn't going to help clarify the debate... I will point out that younger people do already pay for subsidizations of older people's health care in the form of taxes paid to Medicare, but it probably seems more equitable because the taxes paid are based on percentage of income even beyond 400% of the poverty level, so that may be part of the appeal of single-payer financed through income tax, but as several people have pointed out, we may need to take an intermediate step towards single-payer or force everyone to suffer through the current system for a while longer.
To address the various comments related to obese people and other risks that may stem from lifestyle choices, I think that most people are in agreement that some of the risk is due to lifestyle choices, and some of it is not. One of the concerns that I have with the Wyden plan is that while it does have some mechanisms in place to address health risks associated with lifestyle choices, they seem to be essentially policies determined by politicians and thus run the risk of not being flexible enough, or being ill-informed decisions. I would be more comfortable with a system that puts into place such a mechanism, but leaves the details up to medical experts.
Posted by: Scott | Dec 16, 2006 9:55:54 AM
there is something seriously wrong about the type of people who think nothing of destroying ecosystems and making entire species extinct, yet worry about the moral implications of buying a homeless guy a hot dog.
Greed is just greed, so called 'moral hazards' are simply excuses for greed.
Posted by: soullite | Dec 16, 2006 10:27:10 AM
I think that most people are in agreement that some of the risk is due to lifestyle choices, and some of it is not.
I disagree, sort of. There is no lifestyle choice that is not always already a function of social and cultural constraints and context. It is not reducible to these constraints, but it can't be separated from them, either. I think that the "personal responsibility" vs. "luck" paradigm that arises from liberal theorists like Rawls is fundamentally unable to really address the way that "luck" or cultural construction is a fundamental part of all forms of personal responsibility.
Posted by: DivGuy | Dec 16, 2006 11:04:19 AM
Scott -
For the record, though I am arguing as one of the "old" guys, I am only thirty.
Lance Webber -
Apologies if my comment seemed to be "fat" bashing. It was not intentional. I suggest a tax on "junk" food, if it could be reasonably defined in a legal sense, because that would offset increased cost for healthcare due to bad choices in food.
I do understand that morbid obesity is a serious medical condition. The people that the aforementioned tax would effect, are the people eating unhealthy food, that lacks reasonable nutritional value.
soullite -
I don't know, I am not a fan of destroying ecosystems and making entire species extinct, but I think buying a homeless person a hot dog is immoral. Now something a sight healthier, I am all about.;) (actually, in the circumstances where I do occasionaly buy a homeless person food, I buy them whatevers convenient - even an evil hotdog)
Posted by: DuWayne | Dec 16, 2006 11:09:30 AM
Divguy, you make good points about the problems of assigning personal responsibility and and the class issues involved. Still, I think incentives for good behavior are a good thing for all involved. Personal responsibility is never absolute--we don't entirely choose who we are, but are already someone before we're even aware of it (in growing up, I mean). Luck applies everywhere in some way or other. And many bad behaviors have a strong correlation to class, including, for example, some kinds of crime that only the poor would have reason to be involved in. But it's still a good idea to encourage the good and discourage the bad, not least for the good of those who tend to the behavior. We do no real favors to poor smokers by not sanctioning their smoking and giving them strong additional incentives to quit. Lung cancer (just to pick one consequence) is a terrible, largely preventable disease that has some of the same class associations as smoking. If we can induce some smokers of all classes to quit, that's better for them most of all.
Posted by: Sanpete | Dec 16, 2006 12:34:10 PM
Maybe it would be a good idea to means test financial behavioral incentives, with a sliding scale.
Posted by: Sanpete | Dec 16, 2006 12:39:21 PM
I don't see how anyone can complain about putting the old and young in the same pool and having more equitable premiums cross-spectrum: eventually, those young will be old, too; those old have a lesser ability to simply work more/harder to make up for their lost income to their various age-attained health troubles, in no small part due to those health troubles, and it seems fairly arrogant and, well, foolish (the sort of foolishness typically ascribed to the young) to insist on not investing one's fair share so that one will also be fairly covered when one is not as able to invest one's fair share.
I am twenty years old myself, but as I've mentioned in near every damn comment on this blog so far (I swear, it's not as huge a part of my identity as it seems here :)) I have my own health problems, and so I have a slightly different perspective, I suppose.
Posted by: Amanda | Dec 16, 2006 12:39:47 PM
After reading the comments above (and others elsewhere) regardling personal responsibility trumping bad luck, and underutilization of health care by the younger folks and overutilization by older folks (recognizing that those receiving Medicare (over 65yo) are already removed from the risk pool, it is clear that the Republicans have it right about human nature.
Everyone look out for themselves, and the hell with finding the commmon good.
So, let's just stay with what we have and ride that 'unsinkable ship' until the bow goes under the waves.
I propose a 'cash on delivery' plan for health care. No insurance so noone gets a 'free ride'. The 'evil' people get their due rewards by dying an ugly, but probably unnecessary, death. If your children are born with heart defects, let them die the way nature intended - survivial of the fittest, you know. If your brain or liver or breasts are filled with tumors, get a shotgun and end it all cheaply.
The selfishness of a very large number of people just can't be legislated away.
Posted by: JimPortlandOR | Dec 16, 2006 1:11:00 PM
Community rating has never worked. Every time it has been used, it is eventually jettisoned in favor of risk based underwriting.
I do find it curious that those who say they are in favor of community rating would most likely be the ones who scream the loudest if a similar approach were used in issuing loans. Those who are most credit worthy would pay the same rate of interest as the guy who had his debts discharged in bankruptcy the day before. Sure, I can see that. Everyone would feel that is fair.
The ideas proposed in HAA are nothing new. Just a rehash of old ideas that have been tried & failed.
Posted by: Bob | Dec 16, 2006 1:20:40 PM
The selfishness of a very large number of people just can't be legislated away.
Very true. I, for example, still have a personal bank account, make people pay me for services they need, and enjoy many luxuries when I know others need medical care they can't afford. This despite being raised as a Christian, which commanded me not be selfish (to love others as I love myself), and even invited me to give away my possessions. Just didn't stop me from being selfish.
Liberals often have a hard time remembering that there is a difference between giving their own money to good causes and forcing everyone else to do the same. I don't have a problem with forcing others to contribute, but I do try to remember that my willingness to do that isn't necessarily a measure of my lack of selfishness, or the opposition of others necessarily a measure of their selfishness.
Posted by: Sanpete | Dec 16, 2006 2:53:53 PM
I don't see how anyone can complain about putting the old and young in the same pool and having more equitable premiums cross-spectrum: eventually, those young will be old, too; those old have a lesser ability to simply work more/harder to make up for their lost income to their various age-attained health troubles, in no small part due to those health troubles, and it seems fairly arrogant and, well, foolish (the sort of foolishness typically ascribed to the young) to insist on not investing one's fair share so that one will also be fairly covered when one is not as able to invest one's fair share.
The issue isn't whether the people are better off living their entire lives under the Wyden plan--I'd agree that they are. The issue is that today's old people would make out like bandits--they paid low young people rates when they were young and now they'll pay low (for them) community rates today. Essentially it's like a pyramid scheme--today's young only benefit if future young are capable of paying for their health care, but really nothing guarantees that future kids won't rise up and repeal the policy, leaving today's young high and dry when we get old.
It's still a good policy, I'm just saying those old bastards better be grateful is all...
Posted by: Consumatopia | Dec 16, 2006 2:57:01 PM
I do find it curious that those who say they are in favor of community rating would most likely be the ones who scream the loudest if a similar approach were used in issuing loans.
Only if you think that the process and importance of issuing loans is the same as health care and that the markets function in identical ways.
Posted by: Constantine | Dec 16, 2006 4:17:24 PM
Very true. I, for example, still have a personal bank account, make people pay me for services they need, and enjoy many luxuries when I know others need medical care they can't afford. [...] Liberals often have a hard time remembering that there is a difference between giving their own money to good causes and forcing everyone else to do the same.
Health care isn't quite the same luxury as a good house, a new computer or a vacation in Aspen. There's an ethical difference between saving your money for a SUV while someone else has to make do with a 15 year old VW, and saving said money while somebody suffers and dies from the medically treatable.
Human suffering, you know? Gee, perhaps it is possible that one of the purposes of a civilised society is to reduce suffering?
Posted by: Phoenician in a time of Romans | Dec 16, 2006 5:37:35 PM
Phoenician, I don't think I understand your point. For one thing, as you can see from what you quoted from me, I'm talking about saving for the SUV (ha!) while someone else suffers and dies from the medically treatable. The poor old VW doesn't enter into it. I'm not sure how you intend the last part of what you said to connect with what I said either. I think everyone agrees that civilization should have a goal of reducing suffering. People differ about the means.
Posted by: Sanpete | Dec 16, 2006 6:24:29 PM
Well, what was the name of that king of jogging some years ago? They guy who died from a heart attack while running his workout?
Posted by: Gray | Dec 16, 2006 6:24:52 PM
Well, what was the name of that king of jogging some years ago? They guy who died from a heart attack while running his workout?
Jim Fixx. Died at 52.
Posted by: BC | Dec 16, 2006 7:17:58 PM
Any lawyers out there? 'Cause I'd like to know the legal precedents that allow for or bar a government program from discriminating based on a persons pre-existing condition, age, or personal life-style choice (such as smoking, drinking or eating your boogers for all I care) in denying a government service/program.
If you all persist in your personal prejudices to the point that a discriminatory system is enacted, I, for one, will be first in line to sign on to the class action suit the ACLU (or whatever organization) will pursue to overturn your narrow-minded boondoggle.
This is a civil rights issue. Your selfishness and paternalism will ruin the chances for healthcare for all if you continue down this self-serving path. Please...reconsider and only support health care proposals that include ALL, regardless of pre-existing condition or lifestyle choices.
Posted by: marydem | Dec 16, 2006 8:36:47 PM
bonesy--
good argument. two problems. one, dirty little secret in health care: preventive care doesn't actually reduce health costs. you still have the 15 years or so of chronic health problems, generating big health spending at the end of your life. it just happens later. forcing private insurance companies to take on senior citizens wouldn't create very strong incentives for them to fund preventive care. two, dirtier little secret: its always easier just not to pay.
Posted by: R/W | Dec 17, 2006 1:31:15 AM
Shearer, Scott--
Take it from a relatively young uninsurable person with disabling health conditions -- community rating is not solely about generational divide. There is an entirely distinct question of distributional ethics pertaining to whether persons who suffer illness through no fault of their own should bear the costs of it solely because of the accident that it happens to have occurred in their bodies.
Reasonable people feel differently about it... until they are butchered with a catheter. Then they tend to feel the same way.
Marydem
I think the only restraint on such discrimination would be the equal protection clause (or due process clause in its equal protection aspects), and it is toothless unless you are a suspect class. Disability doesn't qualify as a suspect class under current precedent (only race, national origin, "legitimacy" and to a lesser extent gender). States might be restrained by the ADA. No court is going to disrupt federal national health case legislation. We have to win this one in the legislative arena.
Posted by: R/W | Dec 17, 2006 1:46:03 AM
"Community rating has never worked. Every time it has been used, it is eventually jettisoned in favor of risk based underwriting."
Um...when did they cancel Medicare B?
Beyond that, the reason it "nenver worked" was because it was employed by companies whose goal was profits, not effective healthcare. And with 10% of patients using 90% of services, there's really not a better way to pad profits than identifying those 10% and removing them. Of course, it meant that the people who most needed care were either covered by the government or going bankrupt, but that's not the insurance company's problem.
Posted by: Kylroy | Dec 17, 2006 11:57:12 AM
The reason community rating has never worked is because the system is voluntary. Community rating is obviously very attractive for the sick and elderly because they are subsidized by the healthy and the young. In voluntary markets the healthy eventually will opt out of the pool, especially in the small group market which is where the biggest problems are.
Stephen:
Look at the biggest killers in America and the high cost chronic diseases. If you still think lifestyle issues are minor, you're delusional. The explosive growth of Type II, or what used to be known as adult onset, in children is not bad luck and it is not genetics. COPD? Hypertension? You could reduce all of them massively through changes in lifestyle.
marydem:
Lawyer here. I'd be fascinated to hear your theory on why you have a civil right to health care on demand and in the form that you choose. Who is being sued exactly under your plan? The voters? The government? Good luck with that.
Posted by: Alex | Dec 17, 2006 1:37:43 PM
Not to mention that there are millions of us who cannot get health insurance. It's not just that asthmatics must pay (much) more, it's that they cannot get individual insurance at all in this wonderful open market. I, for example, can't get health insurance because I don't work for an employer that provides it and I have a pre-existing condition.
And with more and more employers deciding to limit their expenses for health care, more and more of us will soon be out on that limb. When it happens to all those smug currently well-insured types, they'll understand... but then it'll be too late.
Posted by: lister | Dec 18, 2006 7:50:33 AM
Of course community rating can work.Australia has had a system of compulsory community rating for private health insurance (PHI)for the last 50 years.
According to http://www.oecd.org/dataoecd/5/54/22364106.pdf
"The principles of community rating and open enrolment were maintained in the PHI market after universal public health insurance was established. Community rating, requiring premiums not to vary by risk, is applied to the pool of individuals buying a given hospital or ancillary product in any given fund. This is linked to open enrolment, which guarantees access to PHI coverage by all applicants with no right of refusal for funds and include the continuous renewal of coverage over time.
Other regulatory provisions also seek to protect consumers and enhance opportunities for individuals to exercise choice of products and health fund. The PHI Ombudsman, a statutory corporation established in 1995 under the 1953 National Health Act, resolves complaints relating to PHI and acts as an umpire in dispute resolution (Ombudsman, 2002).
Funds are subject to premium and product approval requirements. While they are allowed freedom and flexibility to design new products, they are required to notify the Department of Health and Ageing of any new product, or change in product. This allows the government to prevent changes that would breach the requirements of private health insurance legislation. Funds can change the rules applicable to various PHI products unilaterally although they are obliged to communicate to insurees any change in policies or premiums adversely affecting their cover. The purpose of this regulation is to allow insurers to differentiate their products (which is desirable for individual choice) while preserving the principle of community rating by hindering insurers’ ability to make PHI products selectively available to lower-risk individuals at lower prices.
A financial equalisation system operates across all funds for hospital cover. The Australian system of reinsurance pools 79% of the cost of over-65 members and insurees who were hospitalised for more than 35 days, and equalises such cost across funds with different risk structures. The rationale for reinsurance is to remove funds’ incentives to select good risks that insurers may face in a voluntary PHI market with community-rated premiums, thus creating the conditions for fair competition across insurers with different risk structures."
Posted by: Far Away | Dec 18, 2006 9:07:52 AM
In New York State, community rating is the law. At least it was when I went to buy health insurance and I found out the going rate for my county was $480 a month. Of course, this was unaffordable -- the only reason I had to buy insurance on my own was that I had a shitty job. But I was working, so no Medicaid for me. I eventually found a state-subsidized plan that "only" cost $240/mo.
On the other hand, even though I dropped it after a couple months because it was too much money, I still believed in it, because a close relative in another state was paying like $900 for insurance because of her health problems.
Posted by: Ezra 1 | Dec 18, 2006 2:07:19 PM
