Richard Eskow Talks to David Cutler

Eskow writes:

Richard Eskow: Hillary Clinton, John Edwards, and Barack Obama have each presented detailed proposals for health reform. The Clinton and Edwards plans include health mandates, which require Americans to obtain health care coverage or face (unspecified) sanctions. The Obama plan does not include mandates.

Health mandates are popular among many Democratic-leaning health policy analysts. The Clinton campaign has been going after Obama aggressively on this issue. They've said that the absence of mandates is a basic flaw in Obama's plan; suggested a cynical political calculus behind Obama's position said that his position feeds a Republican narrative; and took the position that Obama's plan is politically vulnerable while theirs (and Edwards') is a political plus in the general election.

(The preceding positions were echoed today by Paul Krugman - see my response, "Why Paul Krugman Is Wrong...)

I don't support any Democratic candidate, but I do have strong opinions about health mandates. As a long-time healthcare policy analyst and health manager in the private sector, I disagree with Paul Krugman, Ezra Klein, Jacob Hacker, and others who support mandates. My differences are based on policy effectiveness, issues of fairness, and Democratic political strategy. I think mandates pose more problems than they solve, and that they could be a political loser for Democrats in the general election.

I've been engaged in a collegial debate with Klein, blogger/consultant Joe Paduda and others on this topic for some time (see, for example, here, here, here, and here). During an exchange with Klein over the last week it became apparent that, while I had reasons to support Obama's policy, it was unclear to me what his team's current thinking was on the topic.

The team published a rebuttal to Clinton's campaign late today. Earlier I spoke with David Cutler about mandates. Cutler is Professor of Applied Economics at Harvard, Obama's senior health advisor, and the principal architect of the Obama plan.

---

David Cutler: I'd like to start with a general comment.... Two possible reasons why people don't have health coverage are usually given. One is that the uninsured are gaming the system. The other is that they can't afford it and don't know where to get it. Most of the literature suggests that the explanation is mostly the latter. That means the single biggest thing we can do to help the uninsured is to make coverage affordable and accessible.

That's why all the Democratic plans focus on removing excessive profits where they exist, improving information technology, and so forth. All the plans do those things, although I think the Obama plan does the most.

The mandate argument is: You must buy something %u2013 but I'm not going to tell you what it is, how much it will cost, or where you're going to get it.

It comes down to this. You'll never get someone to buy something if it's not affordable and not accessible. People just don't do it.

Richard Eskow: That's an area where the Edwards campaign has taken the lead. They suggest automatic enrollment whenever an American intersects with the health care system or government services.

David Cutler: You can enroll them and then forcibly collect the premiums. That's one way to solve the problem. But it's not necessary to do that. A better approach is to do everything possible to make it affordable and available. When it is, almost everyone will have it."

Richard Eskow: There are a couple of concerns about that approach. One is the problem of "adverse selection." Sicker people %u2013 or people with a greater likelihood of becoming sick %u2013 will enroll. That will drive plan costs up, making it prohibitively expensive.

David Cutler: Let's look at the level of coverage you can get without a mandate. Our estimates, based on studies in the literature, is that we can get 98% or 99% coverage without a mandate for adults. There may be some small pockets of people who choose not to buy it.

Richard Eskow: What about those people?

David Cutler: If there are free riders, Obama is open to mandates. But what he is saying is %u2018Look, mandates seem like a panacea, but that's not where the hard work needs to be done.' Auto insurance is a mandate, too, and not everyone has that. You've got to prove to the public that you're willing to do the hard work.'

Richard Eskow: Would mandates be considered at that point?

David Cutler: He hasn't ruled anything out. It's a matter of priorities. The fact is, the policy differences on the mandate issue aren't that large at all. Sen. Obama believes they're an option down the road, if other approaches don't work.

Richard Eskow: And yet Sen. Clinton made another speech about mandates and universal coverage yesterday. And the Clinton had ( Clinton Campaign Manager) Patti Solis Doyle and (Policy Director) Neera Tanden talk about health care differences with reporters this morning. And Paul Krugman weighed in on the pro-mandate side of the debate, too.

David Cutler: I know the arguments, but look at the evidence. What really matters is: Can they afford the coverage?

Richard Eskow: Part of the debate involves political communications: Is the mandate issue a winner for Democrats in the general election, or a liability?

David Cutler: I don't get involved in the politics of it.

Richard Eskow: What about the concern %u2013 which I and others share %u2013 that insurance premiums are an inherently regressive form of 'taxation.' The state of Massachusetts has had to waive the mandate for 20% of the uninsured as a result. All the campaigns have been forced to create fairly complex subsidy structures in an attempt to offset that regressivity, but paying for some portion of health insurance out of general tax revenues %u2013 either for a public system or some type of voucher %u2013 would be less regressive. What about taxation as a funding mechanism?

David Cutler: That doesn't seem to be on the table now for any of the candidates.

Richard Eskow: Then the devil is in the details, isn't it? What would premiums costs? Who would get a subsidy, and for how much? Nobody is debating these issues with any specificity, and yet that's where %u2013 arguably %u2013 the real debate should take place.

David Cutler: That's why we're suggesting that we lower costs first. Otherwise, you're saying you want to force people to buy something, but we don't know how much it will cost or what you'll get in return.

Richard Eskow: There's been talk that a consensus is forming among policy analysts that 10% of income is the right number for total out-of-pocket health costs, including premiums, copays, and deductibles. But that's a very high number for lots of people.

David Cutler: Well, healthcare is 16% of the GDP now. Some of that cost is being borne through taxes already. So it depends what you want to count.

Richard Eskow: But 10% for whom? $4,000 for a family of four with income of $40,000 is a devastating figure. Whereas there are probably very few people in the top 2% of income who spend 10% on healthcare.

David Cutler: That's where the subsidy debate comes in, and is another reason to address the cost issue first.

---

Richard Eskow: Overall, Prof. Cutler had a clear and well-articulated response to many of the objections raised to the plan. Since he is not part of the campaign's communication strategy, I did not ask him about the Clinton campaign's accusation that Obama had been misleading in suggesting he had a universal coverage plan. He did make it clear that he feels a 98% enrollment level is possible without mandates, and that if that fails Obama will consider their use.

In my opinion, both the Clinton and Obama campaigns could have communicated their points more clearly - and with less heat. It was for this reason that I contacted Prof. Cutler. I have asked him for more background on that 98%-99% enrollment estimate. He says its an "internal calculation," and it seems quite high to me. I'll provide any further information as I receive it.

Comments

[Denis Drew]

Imagine a future in which families were mandated to buy a health plan -- some purchase the one with the $10,000 deductible (the cheapest legal option?) -- okay; they have obeyed the law -- but now those families end up in the emergency room MORE OFTEN, instead going to their family doctor's office, because they were forced to use up their family doctor money buying what Obama correctly calls "home insurance."

Subsidies tend to be set at a multiple of what -- in reality -- should be a doubled fed poverty line: $20,000 a year for a family of four (the official line based on three times the price of an emergency diet). $40,000/yr is more like the -- real -- barely above poverty line for a family of four, while $55,000/yr is roughly median family income these days. Most families are not far from poverty -- though their numbers might sound just fine -- as med insurance climbs and climbs. Forcing rising premiums down the throats of families with shrinking real world incomes is flirting with disaster in many cases -- and would impose disaster outright upon many hanging by a thread families (maybe you need a lawyer to get your son out of jail or are just in over your head with the bookie).

Avoid mandate suicides.

If private insurance is going to be part of universal health insurance what is wrong with means tested VOUCHERS -- remember vouchers? With vouchers you are giving people something -- great sales imagery.

With mandates you are threatening to take away -- or threatening to do something about it if you don't -- terrible sales imagery.

When I was a NY Post paperboy in the Bronx I was given a route that was a potential gold mine: the distributer didn't even deliver to newsstands on half the route, we delivered for 25% less and the old boy had not done any canvasing.

I brainstormed that giving away free week was the way to go -- BUT I knew people would not want to "get involved" if I just showed up at their door and offered a free week; afraid of hidden conditions. So I printed up FREE COUPONS (I still paid) and stuck one in their hands when they opened the door -- putting them in control in a way they understood -- and got more new customers than any other kid in the city.

That's what vouchers do: you are sticking money in voters' hands when they open the door -- money they can only spend in one place: on health care. They'll eat it up.

Mandates coupled with cash penalties: as unappetizing as an offer you can think of if you were trying to think of unappetizing.

Avoid electing McCain.

[Maynard Handley]

"Two possible reasons why people don't have health coverage are usually given. One is that the uninsured are gaming the system. The other is that they can't afford it and don't know where to get it."

We're never going to get anyway if this is the level of analysis being offered.
(1) A severe problem with health insurance is that what is promised (payment to cover the costs of treating what ails you) frequently is not delivered after the full gauntlet of legal loopholes in the contract is thrown at the purchaser. I'm not interested in paying $4500 a year for treatment denied, or for still having to pay 30% of a multi-hundred thousand dollar bill, or for not having long-term-care covered etc etc.

So this is the first issue with the health insurance business --- plenty of people, for damn good reason, simply don't trust these organizations.

(2) What every normal American is concerned about is not health insurance; it is adequate medical care. Retaining the inefficiencies of the current system, and simply forcing everyone to contribute (either directly, ie mandates, or indirectly, ie govt pays the insurers via taxation) isn't doing anything to attack the fundamental problem --- that Americans pay twice as much as other advanced countries to receive the crappiest care. THAT is what we want fixed.
I expect that part of fixing that involves getting rid of insurance companies.
I expect another part of it involves some laws that damn well force the construction of nation-wide single-point electronic repositories of patient information, because 20+ years of "leaving this to the market" have achieved fsckall; likewise for common-sense laws like requiring all prescriptions (and other doctor communication) to be printed rather than scrawled.
I expect part of this will require confronting the doctors union (AKA the AMA) and damn-well forcing them to open up the number of slots available to train doctors, along with getting rid of the ridiculous initiation practices of the profession --- plenty of other countries seem to have doctors that turned out just fine without being tortured by lack of sleep, a practice that, let us remember, leads (this is documented) to VASTLY more errors on the part of these novices.

The bottom line, however, is that if all we are basically given by these health care plans is new ways of paying for the same crappy system, we're not making any progress.

[JRoth]

What incredible hand-waving! 98-99%? Well sign me up!

The CBER study suggested 93-94% coverage without mandates, which is wholly unacceptable. If Obama's campaign can convince me - and others I trust - that they can really get 98% of Americans into the system with nothing more than cost savings and subsidies, then I'll be happy. But this isn't doing it.

[mike]

I posted this question the other day on the Gruber post. Here goes again...

How come no one is talking about opt-out health insurance? Consider a plan like Edwards’, where enrollment is essentially automatic whenever someone interacts with health services or the government. But, al la Obama, give people the option to back out, but only with signing of many, many disclosures. If insurance is the default (but not necessarily mandatory), still more will ultimately enroll.

Aren’t there a bunch of big-shot economists and psychologists advocating ideas about the importance status-quo reference points, and how this can be really important for certain policies? They’ve talked about this for enrollment in 401K plans and 30-year fixed vs. ARM mortgages. So why not health care? Wouldn’t the basic idea also serve as logical compromise between Clinton and Obama? Would this proposal satisfy Paul Krugman, at least a little bit?

[bacon]

> In my opinion, both the Clinton and Obama campaigns could have communicated their points more clearly - and with less heat

Clinton's position is very clear - if we cannot have a cat (tax), we'll call it a dog (mandate + waver) as long as it catches mice (provides uninversal coverage). Obama's position is also clear - if we cannot have a cat, we'll just try to talk mice into committing suicide instead. What's not clear?

[bigTom]

Ditto for what Maynard says. Of course the political resistance will be immense. Lets assume for the sake of argument that the 2x times OECD figure is corect. Then out of the 16% of GDP currently going to healthcare, 8% of GDP is excess cost. That 8% of GDP is someone's revenue, and they are going to fight awfully hard to keep it. That is why ALL the plans are political fudges, they can't alert the various health industry powers that their revenues are at stake. A change with this many losers is going to take a first class crisis to bring about. With that 16% of GDP rising exponentially (by probably low single digits percent) per year, we may still be some time away from total meltdown. But perhaps the financial institution solvency crisis (this isn't about liquidity) will bring things to a boil much sooner?

[Denis Drew]

Subsidies for low-income mandates are indistinguishable from voucher -- both paid by tax, no? Whatever the specifics of mandate subsidies, looks like we would be giving the equivalent of voucher to most families under mandates.

If the real poverty line (as you folks must be aware) is more like $40,000/yr for a family of four -- and median family income is tragically something like $55,000/hr -- and we want to be very careful that mandates do not put some families into impossible binds (I would argue life's little complications make that goal undoable): we may need to give a 100% subsidy up 1 1/2 X the real poverty line (about median family income)?

Looks likely that most families would get some equivalent of a means-tested voucher.

Basically, mandates make the UHC issue about HOW we achieve the result (advantage Repubs: "garnishing wages!?"). Vouchers have the rhetorical advantage of being the eternal Repub answer to everything -- how could they object to mandates as the HOW of UHC?

[Robert Waldmann]

I am neutral (leaning towards Obama) and have a lot of respect for David Cutler. Nevertheless, he is not being honest in the interview. Consider

"the single biggest thing we can do to help the uninsured is to make coverage affordable and accessible.

That's why all the Democratic plans focus on ...

The mandate argument is: You must buy something %u2013 but I'm not going to tell you what it is, how much it will cost, or where you're going to get it."

The first sentence and the words I quote in the second imply that the third is a false claim. As applied to the Clinton plan it is a false claim. The assertion that there can only be one mandate argument and that it implies not telling people "what it will cost" is obviously false. The last sentence could not possibly be true in any universe with the same rules of English as this one.

On substance, Cutler obviously knows about the Lucas critique. He knows perfectly well that summary statistics are not always structural parameter estimates and that summary statistics based on data prior to a reform can not be sued to forecast the effects of the reform. The fact that currently most uninsured people are uninsured because they can't obtain insurance, does not imply that this will be true under his plan when insurance companies are not allowed to deny coverage, must charge rates based only on geography and must cover pre-existing conditions. His plan will make going uninsured much more attractive and he knows it.

Back when I knew David Cutler, he didn't pull numbers out of his hat and did explain how they were calculated when asked.

Finally, Eskow uses the excuse that Cutler is not part of the Obama message machine to allow a clearly false claim about the message to pass. Cutler volunteered a claim about what Obama "is saying" which is inconsistent with the content of TV ads and mailers approved by Obama

"But what he is saying is %u2018Look, mandates seem like a panacea, but that's not where the hard work needs to be done.' Auto insurance is a mandate, too, and not everyone has that. You've got to prove to the public that you're willing to do the hard work.'"

Note Cutler does not (carefully) assert that Obama has said that. He claims that this is a summary of what he is saying. This is false. Obama has not just claimed that mandates are not a panacea, he has argued that they are a bad thing (bad enough to be important to people's choice in primaries). Since Cutler has chosen to discuss Obama's message, Eskow's claim that Cutler should not be asked about Obama's message is totally dishonest.

Anyway, I stil would be delighted if Obama were elected President and would be delighted if David Cutler were in charge of health care reform.

I assume that they are lying and I have no problem with that. I don't want candidates constrained by honesty.

[Robert Waldmann]

Actually I don't have a problem with dishonesty in politics (don't bring a tooth brush to a knife fight) but there is a surprising rhetorical slip. Now I have great respect for prof. Cutler's rhetorical skills (including calling Bush Sr's economic plan deja voodoo economics and well lots of stuff).

However, he has convinced me that the Clinton plan does vastly more about "removing excessive profits where they exist" "assistance to the poor uninsured than the Obama plan (I haven't read either). Along with the two blatantly false claims which are stated as definite fact without any qualification he said " although *I think* the Obama plan does the most." Cutler is not willing to simply claim that the Obama plan does more than the Clinton plan along with the claims that there is only one possible mandate message and that all Obama is saying is that mandates aren't a panacea.

I assume this was a slip. Otherwise I would conclude that the Obama-Cutler plan does about as much to fight excessive profits as defence department's no bid contracts with Halliburton do. Definitely sloppy.

[Neal]

The only reason why manditory insurance through existing insurance companies is considered an option is the campaign funding that the insurance companies do. The insurance companies are all in favor of it--after all, if someone is required to buy you product, wouldn't it make you happy?

Whose purpose is served by government mandating private insurance? It's not like that there are a lot of people who can afford the extra several thousand dollars a year that the most minimal insurance would require.

Single payer universal insurance is inevitable. All other options will break the economy and consumer, later if not sooner. Regardless of how many back-channels the costs are routed through, the employed/uninsured and the employed/insured person pays for th uninsured. Recognize that fact and health care spending might drop to 11% of the GDP instead of 17%.

[kharris]

Let's us one of Professor Mehra's rules of thumb? Can anybody think of a voluntary behavior, other than those associated with normal bodily functions, in which humanity, or US residents, participate at a 98% rate? That seems a reasonable first slice at this 98% claim. If a model kicks out a 98% number, then you need to look at the model (which we don't get to do). If there is some precedent, that's better, but I can't think of anything we do at a 98% rate. In this case, we are being told it is 98% day in and day out.

[Tuco]

Part of the problem:

"William McGuire, of UnitedHealth Group, the nation's leading insurer, was the third-highest-paid CEO on the Forbes list. His pay of $124.8 million could cover the average health-insurance premiums of nearly 34,000 people."

http://www.commondreams.org/views05/0510-22.htm

"Dr. McGuire is chief executive officer of UnitedHealth Group Inc., one of the nation's largest health-care companies. He draws $8 million a year in salary plus bonus, enjoying perks such as personal use of the company jet. He also has amassed one of the largest stock-options fortunes of all time.

Unrealized gains on Dr. McGuire's options totaled $1.6 billion, according to UnitedHealth's proxy statement released this month."

http://www.post-gazette.com/pg/06108/683054-28.stm

* United Health Group
CEO: William W McGuire
2005: 124.8 mil
5-year: 342 mil

* Forest Labs
CEO: Howard Solomon
2005: 92.1 mil
5-year: 295 mil

* Caremark Rx
CEO: Edwin M Crawford
2005: 77.9 mil
5-year: 93.6 mil

* Abbott Lab
CEO: Miles White
2005: 26.2 mil
5-year: 25.8 mil

* Aetna
CEO: John Rowe
2005: 22.1 mil
5-year:57.8 mil

* Amgen
CEO: Kevin Sharer
2005:5.7 mil
5-year:59.5 mil

* Bectin-Dickinson
CEO: Edwin Ludwig
2005: 10 mil
5-year:18 mil

* Boston Scientific
CEO:
2005:38.1 mil
5-year:45 mil

* Cardinal Health
CEO: James Tobin
2005:1.1 mil
5-year:33.5 mil

* Cigna
CEO: H. Edward Hanway
2005:13.3 mil
5-year:62.8 mil

* Genzyme
CEO: Henri Termeer
2005: 19 mil
5-year:60.7 mil

* Humana
CEO: Michael McAllister
2005:2.3 mil
5-year:12.9 mil

* Johnson & Johnson
CEO: William Weldon
2005:6.1 mil
5-year:19.7 mil

* Laboratory Corp America
CEO: Thomas MacMahon
2005:7.9 mil
5-year:41.8 mil

* Eli Lilly
CEO: Sidney Taurel
2005:7.2 mil
5-year:37.9 mil

* McKesson
CEO: John Hammergen
2005: 13.4 mil
5-year:31.2 mil

* Medtronic
CEO: Arthur Collins
2005: 4.7 mil
5-year:39 mil

* Merck Raymond Gilmartin
CEO:
2005: 37.8 mil
5-year:49.6 mil

* PacifiCare Health
CEO: Howard Phanstiel
2005: 3.4 mil
5-year: 8.5 mil

* Pfizer
CEO: Henry McKinnell
2005: 14 mil
5-year: 74 mil

* Well Choice
CEO: Michael Stocker
2005: 3.2 mil
5-year: 10.7 mil

* WellPoint
CEO: Larry Glasscock
2005: 23 mil
5-year: 46.8 mil

* Wyeth
CEO: Robert Essner
2005:6.5 mil
5-year: 28.9 mil

TOTAL 2005: 559.8 mil

TOTAL 5-Year: 14.9 billion

http://blogs.webmd.com/mad-about-medicine/2007/08/ceo-compensation-who-said-healthcare-is.html

Keep in mind that sick people die in order to protect that now dated 14.9 billion dollar figure.

[Mr Punch]

Part of the problem is that the financing of "universal" health coverage, whether by taxation or purchase of insurance, always involves overcharging relatively healthy groups to subsidize less healthy populations. In an insurance-based plan, as a result, there will be perfectly rational resistance to participation by healthy younger workers -- it's not just that they can't see the need for insurance, it's that in actuarial terms they're being ripped off.

Under the circumstances, 98% participation without a mandate or a tax increase looks like pie in the sky.

[PQuincy]

There seems to be lots of discussion about the inevitable 'free riders' if no mandate for purchasing health insurance is imposed as part of the insurance and health care reforms being proposed by Clinton and Obama -- both of which, as I understand it, have declined to take the path of single-payer universal care, but who disagree about mandated purchasing.

Free-riders, many argue, will not purchase health insurance even if it is reformed to provide universally accessible and fairly priced coverage. Furthermore (and here's the assumption carried forward from today's situation that I question), should a free-rider get really sick and need lots of care, the system will of course care for the person -- leading to a spiral of adverse selection, etc. etc.

That care must be provided to all who need it is indisputable. But the assumption that this care will be provided _as if_ the person had purchased the available insurance is a little more complex. The issue finally got a bit clearer for me when I heard about vague proposals for a 'penalty' rate for free-riders who got sick...i.e., forcing them, once they need it and want to purchase it, to pay considerably more for the universal care. There are various reasons, much-discussed, why this wouldn't work.

But what happens if we take a fresh look at the situation after universal insurance is indeed available -- that is, no exclusions, and price set only by very broad factors (age, smoker/non-smoker, possibly location)...rather like auto insurance.

Such a system will indeed generate free-loaders. BUT: when they get sick, they simply don't have insurance. That means, under the new dispensation, that they are financially responsible for their own care. If they have the money, they owe it -- until they reach bankruptcy.

Ah, some will say: but many free loaders will be impoverished, and not have the money anyway. Yes, that's true. And _such people would be covered for free ANYWAY_ under any imaginable system, probably through subsidy of their purchasing universal insurance. In fact, our society as a whole will cover the cost of expensive care for the poor, regardless of how they are or are not insured.

In short,the new dispensation will shift the _risk_ of failing to purchase universal insurance onto the asstes of freeloaders. (This is quite different from the current situation in which individual insurance is simply unavailable, or wildly overpriced, for individual buyers). The free-loaders and the poor might not buy it -- but even if the poor did buy it, it would only be because the entire system subsidized it, which is essentially a wash for the big picture. Only those who had assets would be risking those assets by not purchasing universal care...and they would thus have very substantial incentives to buy in.

The same applies to children, though there might be some further consideration needed: the children of poor parents should be and will be cared for as a public charge, whether or not their parents buy insurance. And the children of the wealthy will be treated, too, either way -- but their parents may lose their house and their Mercedes if they neglect to buy insurance.

I realize that there are important grey zones and threshold issues for the lower-middle class, etc. I also realize that free loaders may generate disproportionate costs because they will skimp on preventative care, too ... though this is likely to be compensated by the fact that freeloaders with assets are likely to be more healthy than average. Healthy persons in their twenties are another issue...they rarely have that many assets, even if their families do, and so are disproportionately likely to free-ride -- but then again, people in that category really are not very big consumers of health care, and the few who do come down with cancer or chronic diseases are not that big of an issue, I'd guess.

Thus, thinking this through does suggest to me that mandates are less crucial than many discussions assume: the arguments for them seem to envision the new system, with easily available and fairly priced universal insurance as continuing all the bad qualities of our current system.

What am I missing, here?

[tn]

If you are making 80K and have no health problems, why would you ever buy insurance if you can wait until you get sick? If you are making 80K you are not going to get subsidized health insurance. It's true that poor and low middle class don't get insurance, because they can't afford, but health middle and upper middle class people have insurance because they can't afford not to have under current insurance system with pre-existent clauses. They will be wiped out in case of serious illness. It's sad to see that Obama continues to insist that 2+2 = 98.

[ken]

From reading these comments I believe I can safely say that no one here has ever had to actually purchase and pay the full cost of health insurance for themselves.

I well remember the days when I too had several health insurance options provided to me from my employer from which I could chose which plan I wanted and only had to pay a small fraction of the full cost with pre-tax dollars. Yes, those were the days.

But for the last six years I have had to purchase and pay for my own individual health insurance policy for which I now pay $390 per month. I had to go to a $5,000 deductible to keep the price low enough to afford. But still, this is twice what I was paying before as an employee and more than the full cost under a group plan of any size. Plus the premium is not tax deductable so I am paying premiums with after tax dollars.

So I really like the Obama plan. I like it because I am sick and tired of subsidizing group insureds with my higher premiums and I am sick and tired of subsidizing their tax breaks with my fully taxed premiums. So what I plan to do is to cancel my insurance at the first opportunity as soon as the Obama plan is enacted. I will buy insurance again when I need it, but not a moment sooner. As I understand it Obama is promising that it will be cheaper and that no insurance companies could deny me coverage or refuse to cover pre-existing conditions. That works for me. The ONLY reason I keep the insurance now is that their is chance that if I drop it I will never be able to get coverage again as I have a chronic illness that requires medication about every other year or so.

If I can go a few years without insurance (I can pay for the occasional doctors visit out of the premiums saved) I should be able to make up for all the years of getting screwed by both the health insurance companies and by the IRS tax code.

[Nathan Yaffe]

Fix the links for the debate with Klein and Paduda!

I was looking forward to browsing...

[Neal]

PQuincy--What am I missing, here?

Well, if you think that the health care INDUSTRY becomes altruistic instead of continuing on in the same model, then of course there is no problem with "with easily available and fairly priced universal insurance."

But if you look at a "non-profit" like United Health Group-the CEO's pay could have covered $10,000 policies for 12,500 people. Or look at it this way--12,500 people gave all of their premiums for his pay package.

[2.el]

Clinton's position is very clear - if we cannot have a cat (tax), we'll call it a dog (mandate + waver) as long as it catches mice (provides uninversal coverage). Obama's position is also clear - if we cannot have a cat, we'll just try to talk mice into committing suicide instead. What's not clear?

[Mr Punch]

"What am I missing, here?" asks PQuincy. I see two things offhand. (1) The "new dispensation" won't shift risk to the assets of freeloaders -- under the old dispensation people are financially destroyed every day because they lack insurance. (2)"Fairly priced" is a matter of opinion, and opinions vary; no one contemplates a health insurance market sufficiently deregulated as to give all consumers the choices they prefer at prices they will regard as fair -- none of the proposals is as consumer-friendly as, say, cable TV.

[JRossi]

From a family doctor: Mandates won't work. No mandates won't work. What will work: Obliterate health insurance companies, bring drug companies to heel, get universal care paid by taxes. The rest is rearranging deck chairs on the Titanic. Next case.

[JRossi]

From a family doctor: Mandates won't work. No mandates won't work. What will work: Obliterate health insurance companies, bring drug companies to heel, get universal care paid by taxes. The rest is rearranging deck chairs on the Titanic. Next case.

[capitalistpig]

Am I the only person who expected reform of the US medical system to actually reform something? Why are insurance companies involved in a reform of our medical system? They are a major problem with our medical system. We need a medical system as it exists in Canada, Great Britain, and continental Europe! NOT more crooked insurance companies!

[Joe Ray]

I'm in total agreement with both JRossi and capitalistpig (and I'm a market socialist pig). This nattering about mandates is indicative of the lack of real leadership and fortitude among any of the Dem candidates (save Kucinich). The only real solution is true single payer universal care. It could be done by reforming and building on the already existing structure of Medicare, as Kucinich suggested, or it could be through some other mechanism, but that's the debate we should be engaging in -- how to implement universal care -- not this endless time- and energy-wasting back and forth about which awkwardly cobbled together kludge we should adopt so as not to upset the insurance industry.

From what I've read, many people are now supportive of the idea of universal health care. The public is ready for it. If only one of the candidates, perhaps one with strong oratorical skills who has the ability to excite the public (I think there's supposedly one of those in the mix), would show some real leadership and start, well, leading people down that path, the medical/insurance industry complex be damned.

[bigTom]

While I'm very sympathetic to Rossi, Capitalistpig & Joe, I think they are being realistic. With something like 1/6th of the economy being healthcare, their must be something like 40-50 million families relying on healthcare jobs. All of these people would feel threatened by any major redo. It won't take much to panic them into a stampede. Its going to take a real blood running in the streets style revolution to get any real reform. Until the amount of excrement hitting the fan becomes really huge, we just aren't going to be ready for that. So what we are offered is tinkering around the edges. It is rearranging the deck chairs on a slowly sinking ship (not the Titanic which went down fast). It will still be several years before most of the passengers realize that the ship is in fact sinking.

[Joe Ray]

bigTom, I'm well aware that single payer universal care would be a major disruption for the health insurance industry and threaten the jobs of many working people. That's exactly why the discussion of what the transition would look like and how it would be handled should start sooner rather than later, before the whole system collapses catastrophically.

The transition to universal care would be painful for some, no doubt about it, but if the present system is allowed to continue, the pain will be much greater for a much larger number of people. A true leader would find a way of making this point as part of selling the plan. He (or she) would devise a way to reassure those whose jobs are threatened. And he or she could be helped greatly in all this if their advisors and supporters were straining their brains over ways of making the transition as painless as possible for all, rather than having everyone mired in debates surrounding stop-gap measures that fail to address the real problem.

And it's my understanding that France and Germany, for example, still have a private health insurance industry to provide add-ons or alternatives to the government plans, so we're not talking about totally killing the industry. Admittedly, however, the nature and size of it would change radically.

But that's going to happen sooner or later anyway. If a certain one of our candidates were truly a "visionary" (as I heard some caller on talk radio erroneously call Obama), they'd see this and act like a real leader and use their public speaking skills and ability to motivate people to convince the public that this is what we need to do.

[Lewis Carroll]

Speaking as someone who personally benefits from the current healthcare financing system (I'm in financial services including the brokering of group health plans), I realize that, short term, my personal interests would be harmed by the transition to single-payer or some other superior system to that we now have.

However, I'm not so egocentric that I don't realize that the current system is rapidly becoming unsustainable, and became a huge burden to many people a long time ago. When helping clients navigate the private insurance system I find myself unable to disagree with their criticisms of the industry regarding pricing, claims management, cost shifting etc. I do what I can for now, but think that in the long run we'd all be better off with a system like one of those found in Europe.

Further, there's no reason to believe that the cost savings from a more efficient delivery system will just evaporate; capital previously dedicated to the voracious appetite of our current health care delivery system could be *reinvested* elsewhere in the economy. On a more personal level, I believe that individuals and employers who have newly freed resources because of lower insurance costs could invest those resources in other products and services with me.

Now I realize that there are others whose livelihoods would be displaced outright in a shift to a new healthcare system, and I'm sensitive to that. I wish I had an easy answer for them, but I don't. And I wouldn't be pleased with a response to them that basically boiled down to "You're the modern equivalent of a buggy whip manufacturer. Tough luck". Dealing with such displacements and transitions is one reason we have things like economists, Department of Labor etc., right?

[Denis Drew]

Are 38% of American families living below a more accurately drawn poverty line?

50 percentile (technically, mean third-quintile) family income for 2005 was $56,277.

[http://www.census.gov/hhes/www/income/histinc/f03ar.html]

The plausible poverty line for a family of three (on p.44, in the 2001 book Raise the Floor) is $33,345 in 2008 dollars -- health care otherwise covered. Add a $10,000 2008 family health policy to cover and we get a poverty line (not the official federal line computed at 3X the price of a super cheap diet) for a family of three of $43,345.

The difference between mean second and third quintile family income ($35,000, $56,000) is about $1,000 per percentile. That computes (30 percentile plus 8 thousand dollars) to 38% of American families living below a believable poverty line (at least without food stamps and other helps -- average family size is 3.13 persons).

http://www.census.gov/population/www/socdemo/hh-fam/cps2006.html

I had been touting 25% as a realistic poverty line -- just doubled the 12.5% official line -- I figured that made a conservative fit with Raise the Floors doubled lines -- conservative because, if anything, a low income curve should be flatter than 45 degrees. It looks like the curve may have been considerably flatter than I even guessed.

Assuming I can't find anything wrong with 38% in poverty, I will email this startling number to media all over the country. The media reporting 12.5% poverty without qualification is like reporting in Columbus' time that the world is flat -- it makes no waves; but informed people know otherwise.

Meantime a possible 38% poverty line should have progressives wonder whether we are looking at more subsidized than nonsubsidized purchases of health care vouchers. Time to reconsider a straightforward voucher system instead of a clunky payroll tax (to pay for vouchers)-plus-mandate setup (if we must have private plans)?