Imaginary HSAs

I'll take the posting of the latest Health Wonk Review to belatedly respond to Bryan Caplan's snarky argument that HSA's will too bring down the costs of health care, because it's basic economics.  Much of his post relies on some analogy about traveling to China, but I tend to think chemotherapy is different from jaunts to Shanghai in obvious enough ways that it's not a terribly useful metaphor. 

What Bryan actually argues is that if everyone had to pay the first $10,000 out of pocket, they would get less care.  Problem is, Bryan doesn't mention or doesn't know that the legal limit for a personal HSA's deductible is $5,200.  Only when you're dealing with a family does it go up to $10,200.  Butwaitthere'smore!  Those are maximum deductibles.  The average deductibles are far lower: $2,011 for an individual, $4,008 for a family.  You're going to tell me this is where the savings are, given that the costs are among rare individuals spending in the five or six digits?  I don't buy it.  Those folks will bust through the cap on their first surgical consult, and this doesn't disincentivize their care at all.

Now, Bryan isn't a health care expert, he's an economist, and from that perspective, what he's actually arguing is correct: If you make people pay a lot of money for their health care, they'll use less of it.  The problem is, HSA's don't do much of that for the costliest patients -- they save money on low level treatments, disincentivizing an array of basic care services.  Here's an interesting result from the recent Kaiser survey:

Oddly, HSA users arer less satisfied with the cost of their coverage -- which are cheaper -- than those in more traditional health plans, 41% to 60%, which strikes me as a bad sign for HSAs.  Bit I digress.  Since Bryan and I agree that the costs in the health system are on the higher end and is using a $10,000 deductible as his base, he wasn't talking about actual HSAs (I was), but imaginary ones with higher deductibles -- like the plan his coblogger proposes, with deductibles in the $30,000s.  The problem is, such plans aren't adopted, even in their weak forms (we don't even use the maximum deductibles now), because they're considered, rightly or wrongly, a cruel and counterproductive approach to health care.  They will, however, save a lot of money.  I'm happy to argue that we shouldn't go down that path for a variety of reasons, but it's a different argument than whether HSAs, as currently composed, will significantly lower costs.

"Like Most People?"

Okay, now be honest: Do any of you know anyone who read Ender's Game to "impress a girl?" Indeed, I always figured there was a causal relationship between reading books like Ender's Game and not impressing any girls, but that may just have been my experience.

Faster Than The Speed Of Light

Kevin Drum wonders if rumors really do travel faster than light, and implores folks to link here to help find out. Reminds me of one of my favorites parts from The Hitchhiker's Guide to the Galaxy:

The history of the Galaxy has got a little muddled, for a number of reasons: partly because those who are trying to keep track of it have got a little muddled, but also because some very muddling things have been happening anyway. One of the problems has to do with the speed of light and the difficulties involved in trying to exceed it. You can't. Nothing travels faster than the speed of light with the possible exception of bad news, which obeys its own special laws. The Hingefreel people of Arkintoofle Minor did try to build spaceships that were powered by bad news but they didn't work particularly well and were so extremely unwelcome whenever they arrived anywhere that there wasn't really any point in being there.

Update: Or, from comments, comes this passage from Mort (by Terry Pratchett):

The only things known to go faster than ordinary light is monarchy,
according to the philosopher Ly Tin Weedle. He reasoned like this: you
can't have more than one king, and tradition demands that there is no gap
between kings, so when a king dies the succession must therefore pass to
the heir *instantaneously*. Presumably, he said, there must be some
elementary particles -- kingons, or possibly queons -- that do this job,
but of course succession sometimes fails if, in mid-flight, they strike an
anti-particle, or republicon. His ambitious plans to use his discovery to
send messages, involving the careful torturing of a small king in order to
modulate the signal, were never fully expanded because, at that point, the
bar closed.

Chris Hayes Cometh

Progressive journalism's preeminent e-mailer Chris Hayes has taken to the blogosphere to peddle his irritatingly impressive brand of commentatarizin'. This is a good thing for you all, but a bad thing for those of us who are about to be rendered obsolete. In any case, one of his first posts takes on Mickey Kaus's assertion that card check legislation would "[subject] non-union workers to thuggish peer pressure," a state of affairs vastly worse than thuggish employer pressure, of course...

Kill this meme. Kill it now.

The Bodyguard

Good article in the T-T-T-T-Times about the burden health care places on small businesses, and the role it plays in convincing eager entrepreneurs that the safety of their corporate jobs shouldn't be sacrificed for the uncertainty of a start-up.

Once upon a time, Ms. Smith and Mr. Lueders had generous benefits from their employers and gave little thought to how medical care would be paid. But today, as owners of a consulting firm in Liberty, Mo., and a transmission franchise in North Kansas City, it is a constant struggle.

“When we worked for someone else, life was good,” she said. “We had plenty of money and health care. Now we live with the constant fear of something. You never know, you just hold your breath. We will probably have one of us go back and get a full-time job at some point.”

You know, it's hard, but not impossible, to scrape by on a low income for a couple years. For most folks, such periods of (relative) poverty are transient and endurable. The prospect of a broken arm, a tumor, or a slipped disc changes that equation radically. And the fundamental insecurity of lacking defense against such mishaps is screamingly unsettling.

What's fun about the universal health care argument is how many facets it has. A good plan would be more efficient, more just, more economical, and more effective. It would also, in a positive liberty sense, enhance freedom and choice. Guaranteed health coverage would act as a bodyguard of sorts, allowing Americans to take economic risks, play weekend ball without fear, and live happily ever after with Natalie Portman. And, in the end, isn't that the sort of public good the government should be protecting?

Ask And Ye Shall Receive

Petey wants more Gorewatch content, so here's an interview the Big Guy just did with GQ.

Bipartisan Micropolicy

The Corner's inveighing against the evils and (literal) dangers of the hated clamshell packaging. Readers know I've been on the case for awhile. Bipartisan coalition?

Republican Suicide Watch

It's rather remarkable how deep and swift the post-election depression of the losing part is. Over in The New York Times, David Brooks is claiming to be a new "swing voter" and calling the argument over the size of the state a "stale, abstract debate [that] will never lead anywhere and only inhibits creative thinking." Elsewhere, the Hudson Institution, in an event I'm bummed I can't make, is hosting a "How Vast The Left Wing Conspiracy" panel, where Byron York will chat with representatives of the Democracy Alliance and the Open Source Institute to ask if it's "time for conservatives to reexamine their own intellectual infrastructure in light of the progressive network's success?" Yikes. Meanwhile, neither Brooks's column nor the Hudson event mention that magic little word -- Iraq -- without which none of this makes any sense. Trust me on that guys, I've been here before. I'm a Democrat.

But Did Anyone Tell His Political Advisors?

I don't know how this process works, but Mitt Romney has named his two primary economic advisors for the 2008 campaign, and, to his credit, they're proponents of, quite arguably, the most politically radioactive ideas in economics. Greg Mankiw's current obsession is a significant gasoline tax, a policy he's so committed to he's created a Facebook group to promote it. Meanwhile, Glenn Hubbard provided crucial backup support when Mankiw admitted that outsourcing was good for the economy -- a position that doesn't play so well in The Rust Belt.

In a weird way, both these moves speak well of Romney. Mankiw's "Pigou tax" obsession is arguable policy, but it's an undoubtedly serious -- and even unpopular -- attempt to deal with a profound threat. And taking a fatalistic view of outsourcing, while again up for debate (which I'll leave to Dean Baker), is at least ideologically honest. Both these guys are serious about policy -- more so, in fact, than they are about politics. And Romney's willingness to embrace them, impolitic statements and all, is evidence that there's a current of such seriousness in him, too.

As further evidence, I did a story on Romney's role in passing health reform awhile back. I concluded that he didn't deserve nearly so much of the credit as he'd been given, but even though the outcome was rather predetermined, everyone involved had honest and lavish praise for Romney's attentiveness to the policy issues and willingness to run an open and honest process -- a welcome change from the current occupant of the White House.

It'll Even Improve My Breakfast Cereal?

That's gonna be some redesign.