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December 7, 2007

Health Coverage & Obama

I was recently pointed at an Op-Ed in the NYT by Paul Krugman called The Mandate Muddle that talks about Obama’s health care plan versus Hillary’s health care plan.

I must admit, I have difficulty understanding the whole “universal health coverage” thing. As I understand it, the way things currently work is that the advantage of health insurance is almost the same as every other kind of insurance: when something bad happens, you don’t take the huge financial hit. This is essentially equivalent to simply socking away money somewhere useful (a mutual fund, say) that you’ve specifically labelled as “health care money”, and whenever you need to pay for health care, you tap it. The primary difference being that if bad things happen that you don’t have enough for, insurance will cover it while your personal health account wouldn’t—and the reason it works that way is because rather than drawing on your own account, you’re drawing on (essentially) the combined purchasing power of everyone else that’s been chipping in to the same insurance company. Only, because it’s a company rather than an account, they have a fair bit of overhead involved in verifying claims and making sure people aren’t cheating. The next big detail, though, is that insurance companies negotiate lower rates with doctors: so they limit who you can go to, and they don’t have to pay as much as you would have to if you self-insured. So far, this all makes a fair bit of sense: by purchasing insurance, you mitigate your risk, at the expense of most likely paying more into the system than you ever get out. Probably quite a lot more (otherwise it wouldn’t be profitable for the insurance company). On the other hand, if you’re wealthy, maybe you aren’t so concerned about mitigating the risk, since you can stand to take the hit if and when you need health care.

So what’s the big goal with mandating universal insurance? By making sure that everyone is mitigating risk, we legally guarantee that the insurance companies have customers. And what happens? Do we get better health care? Does the cost of health care go down? Well, we may get better health care, because people will go to more regular check-ups. And that may cause the cost to go down (due to the whole “catch expensive problems before they become expensive” thing), but costs also go up because now hospitals can’t afford to give great prices to insurance companies and pass the buck on to the little guy without insurance. So what happens if you can’t afford to buy insurance?

If you can’t afford car insurance, these days, you just ride a bike (or you walk). But there’s nothing you can give up (short of committing suicide) if you can’t afford mandatory health insurance. So what happens? Legally, you’re required to buy it, so suddenly purchasing insurance gets put first on the list, in front of things like food, shelter, keeping the lights on, keeping the toilets working, etc. Krugman says this is a false claim, but on what grounds? Only that the government will subsidize it for people… meaning what, that the government will buy it for you? Forcibly make it cheaper? This sounds ripe for abuse, and unless the government is buying it for you, doesn’t actually solve the problem.

And the first false claim, that it’s unenforceable… the answer is Switzerland and the Netherlands? Surely that can’t be taken as proof positive. We’re talking about America here, a country that rejected Kyoto, a country that still has capital punishment, a country where people (mostly) don’t live close together and find it easy to ignore each other and revel in our ignorance and rudeness. And Krugman wants to compare this body of people to folks in Switzerland and the Netherlands? Countries known for their staunchly liberal politics? The citizens of America have a far different approach to “government mandates” than do citizens of Switzerland and the Netherlands.

Besides which, there is no enforcement mechanism in these plans. Whether or not it’s even possible to enforce such a mandate, there’s no provision for it in Hillary’s plan. For car insurance, you’re required to provide proof whenever you get pulled over by the cops. What happens for Hillary’s care? Nothing. If anything, Edwards’ plan has at least approached this aspect, as his plan requires people to show proof of insurance when they submit their tax returns. But I think Timothy Noah makes a good point when he says this:

Enrolling people in a private health care plan isn’t the hard part; forcing people to pay for a private health care plan is the hard part. Yes, the government has procedures to collect student loans and unpaid taxes, but it’s understood that such payments are obligations. There’s little disagreement that if you take out a loan, you’re obliged to repay it, and only slightly more disagreement (mostly among crackpots) that as a citizen you are obliged to share in the cost of government. I believe there would be a lot of disagreement about whether the government could compel you to buy a private health insurance policy.

If you want to drive a car, it’s accepted that you have to buy private auto insurance. But that’s conditional on enjoying the societal privilege of driving a car; you can avoid the requirement by choosing not to drive one. A mandate to buy private health insurance, however, would be conditional on… being alive. I can’t think of another instance in which the government says outright, “You must buy this or that,” independent of any special privilege or subsidy it may bestow on you. Even if such a requirement could pass muster in the courts—and I have my doubts—it seems to me that politically it would give the inevitable conservative opposition a nice fat target to rally around. Big Brother will steal your wages if you don’t buy a health insurance policy!

More importantly, he keenly observes the following:

It may be necessary to achieve the goal of expanding government-administered health insurance in stages. All the health care plans of the major Democratic candidates are premised on that assumption, whether they acknowledge it or not. The only Democratic candidate I’m aware of who dispenses with such gradualism is Dennis Kucinich, whose solution—“Medicare For All”—is the only one that will solve the health care mess in the long run. Clinton, Obama, and Edwards all have plans that would steadily enlarge the role of government health insurance. These are accommodations to political reality. I question the wisdom of including, within such an accommodation, a mandate that would render that accomodation unattractive to a large bloc of voters. If we’re going to create a ruckus, better to do it in the service of a more comprehensive solution than either Clinton or Edwards has put forth. If we aren’t, Obama’s resistence to an individual mandate makes perfect sense.

That being said, I’m with Krugman in being annoyed that Obama keeps making the claim that his health care plan covers everyone. The only thing I can imagine is that he must be playing some stupid semantic game: “covers everyone” (i.e. applies to everyone) versus “provides health care coverage for everyone”.

About December 2007

This page contains all entries posted to Kyle in December 2007. They are listed from oldest to newest.

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