Ezra Klein: Obama's Plan: Quick Conclusions

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May 29, 2007

Obama's Plan: Quick Conclusions

Alright, finally tracked down the Health Insurance Exchange Markets piece of the puzzle. Obama's plan does force a type of community rating on all insurers -- they can't discriminate based on preexisting conditions, but can discriminate based on age. The markets are less of a regulatory agency and more of a purchasing collective: Think of them as a large company's HR department. Deductibility will still work the same way screwed up way, with employers getting to use pre-tax dollars and individuals and those going through the Exchange Market using post-tax dollars (and thus paying more for the same goods). Subsidies will be what attract individuals to the new markets, and thus what encourages insurers to participate. But they don't have to participate if they don't want to.

What you're basically seeing here is that the Obama campaign believes affordability and ease of access (where do you buy insurance?) problems account for most of the uninsured. If they can fix those issues, they don't need a mandate. If this proves incorrect, they believe they can implement a mandate, or some other coverage-enhancing policies, down the road.

In the end, Obama's plan sections off the health care market. Rather than going towards massive integration, in the way Wyden's plan does by channeling all health insurance through a single agency in each state, or the way Edwards' plan does by creating a Medicare option and then making it advantageous for folks to switch over from private insurance, Obama's plan seeks to correct the places in the market where we see folks having the most trouble getting insured. It builds on the current system much more than it transforms it.

Also at Tapped

May 29, 2007 in Health Care | Permalink

Comments

Thanks for the posts Ezra; I'll admit I like your summaries much better than actually going to read the plan myself, which made my eyes glaze over.

The Obama plan seems significantly more incremental than the Edwards plan or the Wyden plan. That will be disappointing to single-payer advocates. However, it's probably more politically feasible as well.

At first glance I don't really like how so much of the plan is optional. But I'm not an expert so I'll reserve judgement for a while until more definitive conclusions come in.

Posted by: Korha | May 29, 2007 4:34:27 PM

So, the final thing we need here is your overall assesment.

Also, we need some blogging about media scripts as described in the daily howler, because until we know how to deal with media scripts, no smart thing can ever happen again.

Posted by: Chuck | May 29, 2007 4:34:54 PM

The first specific question I would have about the Obama plan is what it does about insurers designing the plan with little coverage for specific treatments or conditions, in order to discourage the uptake of the plan by those who may be more likely to need those treatments.

That, in addition to individual rating and exclusions for pre-existing conditions, would be the primary means of selling health insurance while reducing the inconvenience of actually covering health care.

Posted by: BruceMcF | May 29, 2007 5:11:28 PM

I don't understand how any of the vocal proponents of single-payer, national health care reform here could be remotely satisfied with either the Edwards proposal or the Obama proposal. Neither of them is single-payer. Neither of them eliminates private health insurance. Neither of them eliminates the profit motive. Neither of them even seems to provide what could reasonably be described as "universal" coverage. Obama's is explicitly non-universal, and Edwards' calls itself universal but contains no provision for actually covering everyone.

And these proposals are likely to be the most progressive versions we'll see, because they're designed to appeal mainly to Democratic primary voters. After the primaries, the winner will doubtless feel obliged to water down his plan to try and broaden its appeal to centrist Democrats and Republicans.

Has any Democratic presidential candidate come out with a single-payer, universal coverage health care proposal?

Posted by: JasonR | May 29, 2007 6:28:09 PM

No single-payer plan would be likely to become law anytime soon. Edwards' plan does include a mechanism by which we can move towards single-payer if people choose it individually. That's a promising feature.

Posted by: Sanpete | May 29, 2007 6:47:41 PM

No single-payer plan would be likely to become law anytime soon.

Spread the word. Many of your fellow Democrats here seem to think that single-payer universal health care is a serious, realistic proposal. And not only that, but that the current system is so bad and so near to collapse that single-payer reform in the near future is all-but-inevitable (funny, I was told the exact same thing when Clinton was running for president, over 15 years ago.) The fact that not a single Democratic candidate has come out with such a proposal shows just how politically naive this idea is. But single-payer health care is such an entrenched piece of liberal orthodoxy they just can't seem to let it go.

I'm also inclined to replace "soon" in your statement above with "ever." Health care is just too large and important a sector of our economy ever to make single-payer a realistic option. It would be like single-payer housing, or single-payer food.

Posted by: JasonR | May 29, 2007 7:17:33 PM

Or single-payer military, or single-payer highways and roads...

Posted by: Ezra | May 29, 2007 8:06:19 PM

Ezra,

No one is claiming low-cost, efficient production with any of those...

Posted by: wisewon | May 29, 2007 8:25:59 PM

Ezra's comparison with highways and the military is specious. Those are public goods. The primary benefits of highways and the military are inherently collective. With respect to health care, the same is true only for services that fall into the category of public health--sanitation, food and drug safety standards, mass vaccination against common infectious diseases. That sort of thing. The vast majority of services provided by a nation's health care system do not fall into this category. They are private goods, not public goods. The primary beneficiary of most health care interventions is the individual patient and his immediate family, not the community or country as a whole.

Posted by: JasonR | May 29, 2007 8:56:53 PM

"They are private goods, not public goods."

Its a values question. Dems do believe that living in a society where people have access to health care is a public good-- just like education, social security, etc.

Its not about private/public goods but whether a market can operate efficiently or not. There are clear reasons why for military/roads/other things a private market cannot work effectively. As I said several times before, I don't think we've seen an effective marketplace in health care, because we haven't had the right regulations in place to deal with the market inefficiencies that do exist. However, those inefficiencies could be adequately addressed such that a market system would outperform a government system-- just like we've seen in most other industries.

Posted by: wisewon | May 29, 2007 9:09:24 PM

No, it's not a values question. Health care services simply do not qualify conceptually and practically as a public good like the military and highways do. We can't provide a national defense at the individual level. It's an inherently collective service. Ditto for roads and highways, although some minor individualization of costs and benefits is possible through things like toll roads and the use of gas taxes to fund highway projects. Health care isn't like that. It's primarily an individual service, just like food and housing and clothing and employment.

Posted by: JasonR | May 29, 2007 9:37:50 PM

You're wrong.

If you believe everyone should have the same access to health care-- this cannot be achieved at the individual level.

Posted by: wisewon | May 29, 2007 10:11:46 PM

No, you're wrong. The definition of public good does not entail a normative belief about access to health care. But you're wrong about that, too. No one believes that everyone should have the same access to health care. Even the most ardent proponents of single-payer are not proposing to make supplementary or alternative private health care unlawful. Even Canada--which went furthest among all countries with single-payer systems in restricting its people from obtaining health care outside the government system--never tried to stop its citizens from buying medical care in the U.S. if they could afford it, and Canada now has a substantial and growing private health care system that richer Canadians use to jump the queue for services their poorer countrymen have to wait in line for. In a free society, richer people can and should be able to get better health care than poorer people, just like they can get better versions of pretty much every other private good.

Posted by: JasonR | May 29, 2007 10:36:39 PM

Hey buddy,

You put up a promise to donate $1000 to a charity of my choice and I'll prove your comment wrong-- definitively.

Otherwise-- shut up.

Posted by: wisewon | May 29, 2007 10:40:22 PM

Oh yes, I promise. I just can't wait for your "definitive proof." Let's see it. And by the way, which statements of fact in my "comment" are you claiming are wrong, exactly? All of them? Again, I can't wait for this "proof."

Posted by: JasonR | May 29, 2007 10:44:20 PM

Ah, you took the bait.

Let's get the rules straight before I waste my time.

Citations of peer-reviewed economics journal article that refutes:

"No, you're wrong. The definition of public good does not entail a normative belief about access to health care."

White paper/newspaper article that refutes:

"No one believes that everyone should have the same access to health care."

Newspaper article that refutes:

"Even Canada... never tried to stop its citizens from buying medical care in the U.S."

I'll make your life easy, buddy:

Google "public good" and "health care" and spend an hour or two educating yourself. Read the second two quotes you wrote carefully-- hopefully those were just stupid comments altogether.

Mr. none@none.com-- if you verify your willingness and identity such that I can ensure the $1K donation, I'll spend the time coming up with the obvious.

But since we all know you won't do that: I'll take the consolation prize-- its obvious to all who reads this thread that you're wrong, and a complete fool for the comments you made on the subject quoted in this message.

Posted by: wisewon | May 29, 2007 11:02:07 PM

JasonR,

You've pulled a fast one with your argument:

We can't provide a national defense at the individual level. It's an inherently collective service. Ditto for roads and highways, although some minor individualization of costs and benefits is possible through things like toll roads and the use of gas taxes to fund highway projects. Health care isn't like that. It's primarily an individual service, just like food and housing and clothing and employment.

We can't provide "national" defense at the individual level in exactly the same sense that we can't provide "national" health care at the individual level. You've simply built your conclusion into your assumption when you argue that defense is inherently collective while health care is not.

Defense is not inherently collective. National defense (defined as defending all the people of the nation) is inherently collective. Likewise, health care is not inherently collective. National health care (defined as providing access to health services for all people of the nation) is inherently collective.

Wisewon was right: it's about values and conceptions of morality. Do you believe that justice demands that we seek national/universal health care, or not?

I would only add that this doesn't have to be a question decided solely on ethical grounds. To the extent that you believe in competing public goods that need to be weighed against each other, you can take the consequentialist position that universal health care is made more attractive the more efficient it is compared to a fragmented, free market system. This is a big part of what has led me to the universal health care camp: it works far better in terms of quality per unit of cost than our system does. Show me a non-universal, private market system that provides as much value and I'll reconsider.

Posted by: jd | May 29, 2007 11:03:00 PM

wisewon,

Well, come on then. Produce these newspaper articles and "peer-reviewed economics journal article" that refute the statements of mine you quote. Put up or shut up.

Posted by: JasonR | May 29, 2007 11:06:00 PM

Um, you clearly have trouble reading...

From above:

Mr. none@none.com-- if you verify your willingness and identity such that I can ensure the $1K donation, I'll spend the time coming up with the obvious.

I ain't wasting time with a joker.

Posted by: wisewon | May 29, 2007 11:08:57 PM

jd said it better than I did-- you're still wrong.

Posted by: wisewon | May 29, 2007 11:11:13 PM

Actually-- taka slight tweak to jd's comment:

National health care CAN be inherently collective, depending on the objectives of the system.

Posted by: wisewon | May 29, 2007 11:13:40 PM

jd,

I don't understand how you think the services provided by the U.S. Defense Department can be provided on an individual basis. How, exactly, do you propose the government could allow individuals to opt in or opt out of coverage by this service?

The vast majority of health care services obviously can be provided on an individual basis. Tests, drugs, surgeries, and so on. Unlike the national defense, it is obviously possible to provide or withhold these services from specific individuals. Can you really not see this obvious difference?

Posted by: JasonR | May 29, 2007 11:15:43 PM

wisewon,

I see. You assure us that you can prove me wrong. You're just not going to do so.

Hey, I just solved the Three Body Problem! Really I did. I promise. I'm not lying, I swear. If you prove to me that you have donated $1,000 to the Institute for the Reformation of Transparent Liars I'll share it with you. Promise!

Posted by: JasonR | May 29, 2007 11:19:50 PM

You agreed to the terms, but too cowardly to carry it out.

You're a blatant waste of time.

Posted by: wisewon | May 29, 2007 11:29:34 PM

jd,

I'd really love to see your evidence for this extraordinary claim. I have never seen any study that attempts to evaluate different health care systems "in terms of quality per unit cost." No one has data remotely sufficient to conduct such a study. We barely have enough data to make valid comparisons between countries with respect to crude aggregate health indicators, like infant mortality rate and average life expectancy, let alone to evaluate the contribution of their respective health care systems to those outcomes.

You are aware, aren't you, that a nation's health care system has relatively little to do with its morbidity and mortality rates, and that other factors--diet, exercise, lifestyle, environment, crime, smoking rates, etc.--have a far greater impact on the health and longevity of a population than anything provided by going to see a doctor?

Posted by: JasonR | May 29, 2007 11:38:10 PM

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