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December 05, 2007
I Need To Go On Fewer Man Dates
Sigh. Yes, the reason the progressive health policy community supports mandates is because we desperately want to screw over poor people. Is primary season over yet?
I could go into the reasons for a mandate in really great detail, but since I've been over every inch and aspect of individual mandates at excruciating length lately, let me just offer the simple and easy one: It's critical for reforming the insurance industry.
You have to do something to end the selection problems bedeviling the insurance system. On the insurer side, you impose community rating, which means they have to offer insurance to everyone, at the same price. But let's say you impose that without a mandate. What happens? Well, a whole lot of people reason that they don't need to buy insurance. After all, the second they do need insurance, they can purchase it, no penalty. The smart move in such a world is to avoid the system when well, only pay in when sick. This will, of course, destroy the system.
So you impose a mandate so everyone has to buy coverage. The insurers can't risk select applicants, the applicants can't game the system. Without the mandate, you can't reform the insurance system. And if you're not going to reform the insurance system and not going to achieve universal coverage, then why not focus on something else?
Maggie Mahar has much more. So does health care expert Len Nichols. It's worth noting that the need for universality -- either through an employer mandate, a government mandate, or an individual one -- wasn't a controversial point among liberals until Obama brought out a plan without a mandate of any sort. Indeed, his plan is, in some ways, the worst of both worlds: It eschews single payer and its close relatives for the more moderate, less expansive, less disruptive structural design that mandates were created to complete, but also doesn't have a mandate. So the mechanism for building on and reforming the system is broken, but he doesn't construct something new to replace it.
December 5, 2007 in Health Care, Politics of Health Care | Permalink
Comments
"they have to offer insurance to everyone, at the same price"
Honest question: what about people who smoke, who are overweight, etc.? Do they pay the same price? If not, how do you prevent back-door, albeit imperfect discrimination by insurers (since poor people disproportionately smoke, etc.)?
Posted by: ostap | Dec 5, 2007 2:31:55 PM
Another honest question: There's no reason to think Obama's lying when he says that he'd consider a mandate if not enough people signed up, right? So what's wrong with that? Would premiums really rise that dramatically in the time between when the plan's first enacted and the time he decides, oops, too many free-riders after all, time to put in a mandate? Or is the thinking that if you don't pass a mandate initially, as part of a larger health-care package, you'll never get Congress to agree to it on its own?
(In any case, this is all probably moot: If Obama gets elected, and all the health care experts tell him he needs a mandate, he'll probably just flip-flop. But he can't do that now 'cause he'll be ripped to shreds by Hillary and the strange rule whereby no candidate can ever change their mind about anything...)
Posted by: brad plumer | Dec 5, 2007 2:46:59 PM
Yes, they do get the same price. There are too many variables here: You can check weight, but what of fitness? You can check smoking, but what of drugs? What about lifestyle? Driving style? Alcoholism?
This is already how it's done in every employer across the country and it works fine. If you want to go after smoking, offer incentives to quit or tax the packs.
Posted by: Ezra | Dec 5, 2007 2:49:00 PM
You have to do something to end the selection problems bedeviling the insurance system.
No, you don't; that's been my point from the beginning.
Community rating requires mandates; on that I agree.
But an all-round better plan in my thinking would be a mandate, a "take-all-comers-at-some-price" rule, and cost cap to the consumer.
In other words, you must have insurance to cover at least X set of medical conditions; if it costs more than 20% of your income, the government pays ALL the excess.
Posted by: SamChevre | Dec 5, 2007 2:53:43 PM
My hunch is that you don't get that second chance. Walk in without a mandate and you'll also have to bargain away your insurer reform. And you'll never get the political capital or will to try it again.
Posted by: Ezra | Dec 5, 2007 2:53:55 PM
Obama's willingness to champion stupid things - Social Security "reform" in addition to this, etc. - makes me think he'll end up as the nominee and he'll win in 2008.
We'll have this wonderful, historic event of a minority getting elected as President, and he'll spend the next 8 years making Bill Clinton's decisions on NAFTA and welfare look like radical left-wing socialism.
It's just a feeling, but as much as Hillary's campaigning frustrates me, I'm worried about how Obama will govern.
Posted by: Stephen | Dec 5, 2007 2:58:56 PM
"we desperately want to screw over poor people"
I didn't see where Yglesias questioned your motivations.(Could be wrong but I didn't see any comments do it either)
Question is would you screw over (somewhat) poor people? Like I said over there it seems like healthy people opting out of the system would largely be unemployed/ have crappy jobs, although not poor enough to qualify for public assistance. Forcing them into the system seems like it would not be clearly beneficial to them.
You make a strong case for why the reform plans wouldn't work without a mandate, but that doesn't speak to the question of the uninsured people that would be forced to change their behavior.
Posted by: Christopher Colaninno | Dec 5, 2007 3:22:13 PM
Or, you know, we could stop arguing the compromise position and start arguing for true universal health care. Problem solved.
Look, the end result of this mandate will be to screw over poor and working class people, period, end of story, do not pass go, do not collect two hundred dollars. There is absolutely zero chance that the subsidies will be enacted at such a rate and in such an easy manner to guarantee that people already living paycheck to paycheck without this cost will not be swamped by it.
The subsidies are just a program for the poor and programs for the poor get eviscerated sooner or later. I really and truly do not see how we can prevent this from happening.
Posted by: Kevin | Dec 5, 2007 3:36:02 PM
"Sigh. Yes, the reason the progressive health policy community supports mandates is because we desperately want to screw over poor people. Is primary season over yet?"
I love primary season.
I find it quite informative to watch where folks decide to stand. For example, Yglesias has decided to stand as an implacable foe of universal healthcare. That's informative.
Posted by: Petey | Dec 5, 2007 4:06:21 PM
"In any case, this is all probably moot: If Obama gets elected, and all the health care experts tell him he needs a mandate, he'll probably just flip-flop."
The problem is that when you run and win on a specific plan you generate support for legislative action on that plan. This is often referred to as a "mandate", though it's a different use of the word than we are otherwise using here.
Obama as President would obviously have to come around to mandates, likely sooner rather than later. But while Edwards would spend the general election campaign getting attacked over mandates, fighting back the attacks, and winning while standing proudly with his plan, Obama would have to suddenly pop up a new plan in 2009 that the American electorate hadn't approved.
If you don't think that will affect Obama's ability to pass a good plan, you don't get Washington.
Posted by: Petey | Dec 5, 2007 4:14:14 PM
"Question is would you screw over (somewhat) poor people? Like I said over there it seems like healthy people opting out of the system would largely be unemployed/ have crappy jobs, although not poor enough to qualify for public assistance. "
The Edwards plan provides subsidies for folks making up to $100,000 per year.
Subsidies are heaviest for those at the low end, with poor and near poor folks getting healthcare for free.
If you're unemployed/ have a crappy job and make more than $100,000, well, you don't exactly have my sympathy here. And I wouldn't classify you as (somewhat) poor.
Posted by: Petey | Dec 5, 2007 4:18:49 PM
If Obama gets elected, and all the health care experts tell him he needs a mandate, he'll probably just flip-flop. But he can't do that now 'cause he'll be ripped to shreds by Hillary and the strange rule whereby no candidate can ever change their mind about anything.
Brad Plumer: The object of the debate now shouldn't be to demonize the otherwise very excellent candidate whose name is Barrack Obama. I don't think that's what Ezra or any of us UHC Sans-culottes want. The object should be to pressure Ogama to support a tenant of liberal orthodoxy called Universal Health Care. So, if he can't "flip-flop" for political reasons in the primary season, why don't all the Obamites push their candidate to bolster his UHC bonafides?
Lots of Obama supporters mention that single payer is really the way to go if you want UHC (as opposed to evil mandates), so, how 'bout it? Urge Obama to come out with a speech saying, in addition to the reforms he's thus far proposed, he's now convinced upon further analysis that it would make sense for the government to provide Medicare to anybody who prefers it over private insurance, perhaps financed by, say, means-tested premiums deducted from payroll (no more than 5% of wages) and a carbon tax. Believe me, I'd like to be able to support Obsama. And such a course of action wouldn't open him to charges of flip-floppery.
Posted by: Jasper | Dec 5, 2007 4:20:48 PM
"My hunch is that you don't get that second chance. Walk in without a mandate and you'll also have to bargain away your insurer reform. And you'll never get the political capital or will to try it again."
Yup. Universality forces a certain rationality on the legislative decisions. Walk in without universality, and the pressure on legislators to do less and less will be overwhelming.
And by creating a poorly functioning system, it certainly won't help efforts to impose universality down the road.
Posted by: Petey | Dec 5, 2007 4:24:21 PM
"Subsidies are heaviest for those at the low end, with poor and near poor folks getting healthcare for free."
You make a compelling case for the Edwards plan, but to the extent that say people making less 30,000 dollars will find the plan affordable their participation will not be a big deal for the sustainability of the reform program. If they would find it affordable then can't be a big part of paying for the system.
Posted by: Christopher Colaninno | Dec 5, 2007 4:44:52 PM
Petey - I've said before I'm impressed with your new message discipline, and I have to say I even do agree with the content of your complaints. You're running up against the legacy of the beast-starvers, which is to say a broadly low-tax, low-regulatory regime is now taken as first-order sacred, up there in our civic pantheon, and direct assaults on said are seen as quixotic and dismissable if not borderline incomprehensible.
'course, I'm unapologetically "one of those Cato types", so ha ha, but still, I see where you're coming from.
Posted by: Senescent | Dec 5, 2007 4:45:35 PM
Ezra,
You say:
On the insurer side, you impose community rating, which means they have to offer insurance to everyone, at the same price. But let's say you impose that without a mandate. What happens? Well, a whole lot of people reason that they don't need to buy insurance. After all, the second they do need insurance, they can purchase it, no penalty. The smart move in such a world is to avoid the system when well, only pay in when sick. This will, of course, destroy the system.
And as I wrote yesterday:
This is the nut of the argument. Krugman, Ezra and others keep saying that the insurance market will fall apart because of rampant free-riding, hence Obama needs to have mandates or give up community rating.
Let's be clear about one thing. It is far from obvious that there will be rampant free-riding. Increased over today's levels? Yes. Significant enough that insurance is not feasible actuarially speaking? No one knows. The pundits can stop pretending they do. I'm sure there are actuaries at Aetna or UHC that have the modeled the level of free-riding that needs to exist for this to be a problem, and others like Gruber that can extrapolate the level of likely free-riding that would exist given the other specifics of the package (subsidies, etc). But no one knows the complete answer right now.
It may be feasible, it may not be. As I wrote above, my hunch is that the level of free-riding would be less than we expect (for those with insurance today via employers, most pay at most 20% of premiums-- are they really going to give up their insurance because the "know" they can get it after they are sick?) and the insurance markets would be fine.
The point is Krugman and Ezra are coming after Obama on this point with far too much of a black-and-white picture, when much is really left to be figured out on this issue. Obama is for universal access, he's on record saying he'd support mandates down the road if needed and there are much bigger issue distinctions to be made on health care.
Clinton and others were right to make a "gotcha" point that Obama's talking point on mandates (people are uninsured because it isn't affordable, if we fix that then the problem is fixed) was wrong. However, is Obama's proposal coupled with a willingness to revisit mandates down the road if needed, so much different a mandate proposal with unclear enforcement mechanisms-- particularly given the uncertainties of the actual impact of either proposal-- that it justifies this much attention? No.
Posted by: wisewon | Dec 5, 2007 5:04:40 PM
"Petey - I've said before I'm impressed with your new message discipline, and I have to say I even do agree with the content of your complaints. You're running up against the legacy of the beast-starvers, which is to say a broadly low-tax, low-regulatory regime is now taken as first-order sacred, up there in our civic pantheon, and direct assaults on said are seen as quixotic and dismissable if not borderline incomprehensible."
Progressives are exactly where Movement Conservatives were in 1979, Senescent. A bunch of things that now seem nutty are just about to become mainstream. John Edwards is our Reagan.
Posted by: Petey | Dec 5, 2007 5:20:41 PM
"You make a compelling case for the Edwards plan, but to the extent that say people making less 30,000 dollars will find the plan affordable their participation will not be a big deal for the sustainability of the reform program. If they would find it affordable then can't be a big part of paying for the system."
Given that they're going to be getting healthcare for free, of course they're not a big part of paying for the system.
Edwards is budgeting $120 billion per year for subsidies by repealing Bush's tax cuts for those making more than $200k/yr. Those folks are going to be the ones paying for the reform.
Posted by: Petey | Dec 5, 2007 5:28:11 PM
If I knew I could get insurance the moment I got really sick without penalty, why would I pay for it now? Because I'm a nice guy? Healthy people are going to know that they will save lots of money by going without until they need it.
Posted by: jd | Dec 5, 2007 6:09:48 PM
John Edwards is our Reagan.
If a lot of the turds swirling around the economy come due all at once, before the primaries are a done deal, maaaybe I could envision that, but even with the assist I still don't think Edwards has the charisma and the chops to enlarge the constituency and hold it together. Don't get me wrong, I think the accent and the economic populism would give him a chance to make good grabs, but I can't see him holding on without getting wedged to death. He sure didn't impress me much in that Amanda Marcotte v. Bill Donohue scrimmage. I suppose ultimately this is me ultimately endorsing the Obama "new politics" appeal.
Posted by: Senescent | Dec 5, 2007 6:34:34 PM
The reason healthcare is expensive is that the government restricts the supply of doctors. The AMA fixes the number of medical school slots at an artificially low level. Practicing medicine without a license is a crime.
Until the government stops restricting the supply of doctors, trying to fix problems with price or demand is pointless.
Posted by: FSK | Dec 5, 2007 6:42:42 PM
If a lot of the turds swirling around the economy come due all at once, before the primaries are a done deal, maaaybe I could envision that, but even with the assist I still don't think Edwards has the charisma and the chops to enlarge the constituency and hold it together.
I doubt Edwards has much of a shot at the nomination at this point (I hope I'm wrong), but, were he to somehow prevail, I suspect he'd be a very formidable candidate. Unless the economy looks a whole lot brighter next November than it does now -- a very unlikely prospect in my view -- I bet this son of the Carolinas would give the GOP serious grief in something like 12-15 states they won in 2004. A large Electoral College margin doesn't necessarily translate into down ticket strength, but it sure helps.
Posted by: Jasper | Dec 5, 2007 7:11:40 PM
Petey
In all seriousness, why do you think getting subsidies for people making 100,000 grand a year is going to be easier than just getting single payer, Medicare for all plan?
Posted by: kevin | Dec 5, 2007 9:23:32 PM
In all seriousness, why do you think getting subsidies for people making 100,000 grand a year is going to be easier than just getting single payer, Medicare for all plan?
I don't presume to answer for Petey, but I would submit the answer to your question is the existence in the US of an $800 billion private insurance industry. Any "Medicare for all" plan will obviously eviscerate the revenue and profit base of private insurance companies. Wouldn't you vigorously contest any proposal to largely legislate your ability to make a living out of existence? I reckon it will be politically easier to force them to submit to more regulations -- with the sweetner of more (temporary) revenue/customers. And then, in a few years, once they begin to have financial difficulties because of the more robust, consumer-friendly regulations imposed by Washington, it will be politically easier to open up "Medicare for all." Indeed, we'll probably have no choice, because a financially stressed private insurance market will no longer be able to get the job done. At that point the industry will begin to downsize, and come to resemble more closely what it does in, say, Australia or France: an insurer dealing with the cost of ancillary medical services. Anyway, this is how I see it.
Posted by: Jasper | Dec 5, 2007 9:41:48 PM
After all, the second they do need insurance, they can purchase it, no penalty. The smart move in such a world is to avoid the system when well, only pay in when sick.
So, we have sizable set of people who:
- can afford insurance
- have no chronic illness
- never get injured
- never get temporary illnesses requiring professional medical care (bacterial infections)
and therefore will not buy insurance unless legally required to. Pfui, I say. That set of people is trivial.
Edward's enforcement mechanism was to enroll people when treated, which is compulsory ins. advocates are saying people will do anyway. Not much of a mechanism.
His other idea is enrollment when they file their taxes if they lack proof of insurance. So they sign up for a plan in March and cancel it in May?
Posted by: c.l. ball | Dec 5, 2007 9:45:34 PM
"In all seriousness, why do you think getting subsidies for people making 100,000 grand a year is going to be easier than just getting single payer, Medicare for all plan?"
In short, because you don't have to fuck with the 85% of Americans who already have private insurance.
You let them gradually come into the public system because they want to, not because you say they have to immediately in 2009. If they like what they currently have, you don't threaten them with change.
Posted by: Petey | Dec 5, 2007 10:17:38 PM
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Posted by: Petey | Dec 5, 2007 10:18:28 PM
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Posted by: Petey | Dec 5, 2007 10:19:11 PM
"In all seriousness, why do you think getting subsidies for people making 100,000 grand a year is going to be easier than just getting single payer, Medicare for all plan?"
In short, because you don't have to fuck with the 85% of Americans who already have private insurance.
You let them gradually come into the public system because they want to, not because you say they have to immediately in 2009. If they like what they currently have, you don't threaten them with change.
Posted by: Petey | Dec 5, 2007 10:19:43 PM
Speaking of open threads, and of outsourcing your blogging to others: everyone should check out Consumerist's awesome liveblog of the Senate hearing on abusive credit card practices Posted by: gfffgj | Dec 5, 2007 10:23:09 PM
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Petey and Jasper
I m sorry, but those answers don't seem reasonable.
"I don't presume to answer for Petey, but I would submit the answer to your question is the existence in the US of an $800 billion private insurance industry."
Yes, an industry that will make sure, in all probability, that the public aspect of the pan is compromised away nd then all we end up with is the private aspect, assuming they cannot kill the thing base don the community rating.
Petey, your line about not fucking with the 85% mises the point -- the 85% will think they are fine and then want to know why rich people get subsidies while they have to keep paying their co-pays and premiums. And then we are right back at having the subsidies gutted and people screwed.
The solution to the "not messing with what they have" is to give the 85% something clearly better than they ave now.
Posted by: kevin | Dec 6, 2007 12:47:17 AM
Honest question (for Ezra and all):
Can't we change the bad incentives associated with the adverse selection problem in ways besides a mandate? For example, is it a necessary part of Obama's plan that you can sign up later, when you are sick, with no penalty?
Maybe it's just a mandate-light. First round, you get in at the right price. But if you miss this chance for some reason, and then sign up after the problem arises, you still get in, but pay a not insignificant penalty?
That sends the message: sign up, it's obviously good for your health and family, AND if you don't you're going to have to pay down the line. BUT AT THE SAME TIME avoids the message of: you must sign up b/c the govt says so.
Surely, lots of enforcement problems with this as well (as with mandates), but couldn't this be a good middle ground?
Posted by: eli | Dec 6, 2007 1:52:19 AM
Mandated purchase of private health insurance could cost nearly 45% more than Medicare for all:
Private insurance is supposed to add 30% costs (20% insurance provider paperwork and procedure denial machinery and 10% doctors dealing with multiple plans paperwork and fending of denial). 30 is 42.8% of 70: nearly 45%.
The poverty line multiples really need to be cut in half (adjusted for reality if you will) before discussion of income levels even begins — because the federal poverty line is based on the useless (if too obviously understated) measure of three times (3X) the price of the cheapest possible emergency diet (dried beans only, no canned beans please!). The 2002 book, Raise the Floor has a professionally worked out poverty line which comes to twice (2X) the official federal line.
Whatever multiples of poverty a person’s wages may be, some individuals will not be in a position to purchase insurance because of their personal situations, making for potentially tragic situations in a programs supposedly trying to help those most in need. We equally need to take into account the tragic state of wages on the low end in this country thanks to the race to the bottom that began in the early 70s. Our standards for what people should be paid are way off what they would be, in an adequately unionized country for instance — potentially leading to more misjudgment on the impact of mandates on people who really cannot afford them.
The only reason I ever see progressives offering for not advocating Medicare for all as best option is the assumption that politicians will be overwhelmed by the politicking of the insurance companies — no other objection. Seems a weak rationale for throwing their support behind a basically undesirable program right at the beginning of a national discussion. Especially when polls show most Americans support Medicare for all as the ideal way to go. Show a little moxie fellows and maybe one of the politicians will get their courage up and follow you (Huckabee?) — couldn’t happen?
Posted by: Denis Drew | Dec 6, 2007 5:52:37 PM
An ugly quality of mandates enforced via heavy fines -- as I believe is the case in Massachusetts -- is that they too much resemble the action of punitive drug laws: the state is going to seriously harm you if it catches you doing something which could potentially harm yourself.
Comparing health insurance mandates to auto accident mandates doesn't wash: you can decide not buy a car you cannot afford to cover; you cannot decide not to be in the state of being a human being, whether or not you have the ability to cover health insurance.
See my post above about not too casually assuming that varying ability to afford health insurance can be reliably linked to points on an income scale.
Posted by: Denis Drew | Dec 6, 2007 6:06:12 PM
Speaking of bad journalist you can add Maggie Mahar. If the percent of premiums insurers pay out is roughly the same in NY and CA and premium in NY is more expensive then CA X% of a higher number means more profit. Contrary to what she says they would prefer to operate in NY because they make more money. Pretty simple math to be butchering.
While we are fixing factual errors;
If you change jobs you get COBRA,
Insurer can not raise individual’s premium they are legally only allowed to raise everyone’s covered under a specific policy,
In CA they have CalChoice small group reform where every employer under 50 lives has rates between 90 and 155% of standard,
Most HMOs are required by law to hold open enrollments where anyone can join, these are not always subsidized by the state,
Most HMO plans like above have no cap, very few have anything similar to the plan she mentions,
Having no insurance, getting pregnant, then expecting someone to insure you for 7 months at a premium that wouldn’t even pay for the delivery is a totally reasonable request,
HIPAA is a federal law, proof of coverage waiving pre-ex applies nationally,
Progressives don’t want to live in CA? not sure what to say about that,
How many blatant factual errors is that in one article?
Posted by: Nate O | Dec 7, 2007 1:18:00 AM
Ezra, really now, for someone that allows themselves to be called a healthcare policy expert you make some major gaffs.
“This is already how it's done in every employer across the country and it works fine.”
Um, no not even close. Thousands of employers charge smokers more. Tens of thousands drug check. Most plans deny claims for injuries from high risk activities. HIPAA specifically allows properly designed wellness programs to motivate healthier living, i.e. losing weight, stop smoking.
Posted by: Nate O | Dec 7, 2007 1:28:16 AM
Ezra, you've jumped the shark. You may not be out to screw over poor people, but you have no way of knowing whether a mandate-based health plan will ultimately do that anyway. You have no idea what the subsidies will look like, or the penalties. I think the waivers in Massachusetts demonstrate pretty clearly the problem with the alledged harmlessness of the mandate system.
I don't care how many experts you parade in front of me, this liberal democrat flat-out doesn't like the idea. More than that, you've gone *way* too far here:
Indeed, his plan is, in some ways, the worst of both worlds: It eschews single payer and its close relatives for the more moderate, less expansive, less disruptive structural design that mandates were created to complete, but also doesn't have a mandate. So the mechanism for building on and reforming the system is broken, but he doesn't construct something new to replace it.
Give me a break. Public insurance is still newly made available to all, and insurance companies still forced to community-rate, and your language here paints Barack's plan as a step backwards. That's Republican-esque.
Health-care progressives need to get a grip. There are *severe* political downsides to using the IRS to force people to buy health insurance. It sounds more like Rudy Guliani's kind of plan to me than a Democrat's plan. Furthermore, the adverse selection problem in this case seems way overrated to me. I'm a young, healthy person, but I skip out on health insurance because it's way too expensive, not for the fun of endangering my life. If the subsidies really make it affordable, then most people will flock to it. If they really don't, then it's a crime to force it on people.
Give this a rest. Barack puts freedom of choice ahead of the lowest possible cost in dollars for the plan - which is really what this is about, the marginal savings of 100% buy-in over 95%. It's a principled stand, and a smart one. Give him a break, for Pete's sake.
Posted by: glasnost | Dec 7, 2007 10:35:14 AM
