Cautious Candidate, Cautious Plan

The New Republic: Obama's Health Care Plan Is Good, But Not The Best

(The New Republic)  After that, they say, they can come back to the problem and, following through on Obama's promise, cover that relatively small portion of the population that still doesn't have coverage. If that requires passing some sort of mandate then, so be it. They're prepared to do so.

I think they mean it. But can they do it? The best studies out there — by Urban Institute researchers, the RAND Corporation, and MIT economist Jonathan Gruber — suggest that, without a mandate, improving affordability will cover roughly one-third of the people who don't have coverage. Mandating that kids (but not adults) have coverage bumps that up to about a half. Obama's advisers think that, by really loading up on the subsidies — and making enrollment a lot easier by, for example, having an automatic enrollment with voluntary opt-out at your place of work — they can goose that up to two-thirds. But that's getting optimistic — and, even then, you still have around 15 million people who are uninsured.

In other words, the "mop-up" job at the end would quite likely be more than a mop-up. It'd be a substantial task, maybe even a huge one. That's why most health care experts believe you can't get that close to universal coverage without some sort of a mandate.

So if it's going to take a mandate to really cover everybody, why not include it up front?

Obama's logic here starts with a policy concern — namely, fearing that a mandate will create more problems than it solves. Obama doesn't want to make people buy insurance until, first, he's sure he's made it affordable. Otherwise, he fears, some working-class people would be forced to buy insurance when, in fact, doing so would impose real financial hardship. Lest this fear seem purely hypothetical, Obama's advisers say this is pretty much what has happened in Massachusetts — where, having passed a mandate, the state has struggled to deliver a good insurance product at rates everybody can afford.

This is a real problem, for sure. But it's also an eminently solvable one. (And, in fact, some would argue Massachusetts is solving it.) You can browbeat the insurers into providing cheaper private coverage; you can spend more money on subsidies; or you beef up public programs as alternatives. In a real pinch, you can even loosen the mandates temporarily, to buy a little extra time. Whatever — the point is that, once the mandate is in place, you've pretty much locked yourself in to providing insurance to everybody, one way or another. And that's precisely what should happen.

Obama's other concern seems to be political — and I don't mean that in a nasty, these-guys-are-so-craven sort of way. Like so many in the Democratic Party, Obama's advisers remember all too well how excessive ambition killed the Clinton plan politically. They don't want to make that mistake again. They fear a mandate sounds scarier to the public, particularly middle-class voters. If, on the other hand, they create the structures for expanding coverage, people will get accustomed to having those mechanisms around — and requiring that everybody get insurance wouldn't be such a big deal.

Like all political arguments, this one comes down to a judgment call. But I, for one, don't see it the way Obama does. Everybody talks about mandates now. Remember, the plan that Mitt Romney passed in Massachusetts and the one Arnold Schwarzenegger has proposed for California both involve mandates. The idea just isn't that controversial anymore.

What's more, there's a good reason you have conservatives, as well liberals, touting this: It's a way of stressing individual responsibility. To people with insurance, the ones you really have to worry about losing in a health-care fight, it signals that you're requiring everybody to start paying their fair share. It's also a way to buy some love from the employer community, for whom the words "individual mandate" seem (mysteriously, in my view) to wash away fears of government involvement in health care.

Does this mean Obama's plan is fatally flawed? Of course not. It still would represent serious progress. (That said, if you want to get into more of the details, Ezra Klein has put his finger on some other valid concerns here.) But, for those of us who will vote in the Democratic primaries, again, the question is how Obama's plan compares to other approaches — and what it tells us about Obama's abilities, as both a candidate and lawmaker-in-chief, relative to his rivals.

With that in mind, let me make one last point via a summertime analogy: Going into your swimming pool on a day when the water might be a little chilly. You can wade in a step at a time, or you can jump into the deep end. The advantage of the former approach is that you minimize the temperature shock at any one time. The downside is that it takes a lot longer to get in, and there's always the chance that, for one reason or another, you won't go all the way. You might chicken out at your waist; or something else might capture your attention and you might forget about swimming altogether.

By contrast, jumping in the deep end involves a little more risk: You might feel really cold for a few seconds. But you'll probably get comfortable pretty quickly. And, once you've made the decision to jump, you're guaranteed to be in the water. You can't get un-wet.

When it comes to achieving universal health care, Obama wants to wade into it: He doesn't want to move everybody into universal coverage until the arrangements are all in place and people feel totally comfortable with it. Yes, he's promising to cover everybody. But the promise is only as good as his word, sincere though it may be.

Those who prefer mandates — a category that, again, happens to include rival John Edwards — prefer to jump in the deep end. They want to seize this opportunity and get the mandate on the books from day one (even if, as practical matter, it's phased in so it becomes fully effective only after a few years). In so doing, they are offering what is, in effect, a stronger guarantee.

Reasonable people can disagree on which approach makes the most sense. And, needless to say, this shouldn't be the only criterion on which to judge these two candidates — or any of their rivals. (We're still waiting to see what Hillary Clinton has to say about coverage and access; her proposal to reduce costs, like Obama's, was impressive.) Still, it'd be foolish to ignore this altogether. As far as I'm concerned, Obama definitely showed us something good on Tuesday. It's just not as good as what I've seen elsewhere.

[omega39-2009]

The whole idea of insurance is a risk pool. It's easy to see where our system is headed, the insurance companies will cherry pick the least risky to make sure the shareholders make money, those deemed risky will end up in high risk state run pools financed by taxpayers.

[cozzicon]

I remember seeing a study once that did the math to determine whether a single insurance company could insure the whole American public at a flat fee, and whether it would be profitable.

This was in the 90's.

But the upshot of the study was that, yes, a single payer insurance pool could easily meet the needs of all Americans' health care. The downside (from a business standpoint) was that is wasn't all that profitable. It wouldn't operate at a loss, but it presented a profit opportunity akin to some public utilities (think the electric company- which in most areas is not allowed to make a huge margin).

And there is the real problem... If companies are forced to insure everyone... they will take a large hit in the area of profits. And they like their profits.

[ioweign]

The whole idea of insurance is a risk pool. It's easy to see where our system is headed, the insurance companies will cherry pick the least risky to make sure the shareholders make money, those deemed risky will end up in high risk state run pools financed by taxpayers.
Posted by omega39 at 09:56 AM : Jun 03, 2007

If you go and try to purchase health insurance NOW, the insurance companies not only check your present health. They will look at your credit history and interview your neighbors for your life style. They go way beyond CHERRY PICKING.

The reason we have Social Security is you can't count on employers. Just look how employers are taking advantage of illegal immigration now. PS - Social Security works if the elected officials would keep their fingers out of it.

[sparks224]

Every one knows the system will have to change. We will go one of two ways:
1. Publicly funded single payer (like the rest of the developed world).
2. Privately funded (the same as we have now with more regulation).
The Healthcare Industrial Complex naturally wants to maintain the status quo.

Unfortunately, because of the amount of money required to run for president, Barrack had to sell out to big business. It%u2019s sad.

[makeafence]

Two factors not touched on in the article: 1) the impact of litigation on health care costs and 2) the impact of illegal immigration on health care costs. The "Buf 'n Blue" alum can and should take a shot at Edwards with (1). As most Dems these days, he probably lacks the integrity and fortitude to go near (2). ~40 million uninsured and ~12-20 million illegal aliens. Except with illegal aliens, uninsured does not mean they don't receive medical care; it's just subsidized by the taxpayer.

[bill1fj]

Sounds like Obama has started on the path to trying to get health care insurance available to everyone, but stopped short.
Obama doesn't represent most citizens on many items of consern. Most legal citizens want illegal aliens deported, and anyone that hires them fined and jailed. No Amnesty.
We want someone that has solutions for our problems both inside the country and out.
Obama jsut seems to have no solutions, just complaints.
As someone from Illinois once said: "Where's Obama?"

[bill1fj]

Sounds like Obama has started on the path to trying to get health care insurance available to everyone, but stopped short.
Obama doesn't represent most citizens on many items of consern. Most legal citizens want illegal aliens deported, and anyone that hires them fined and jailed. No Amnesty.
We want someone that has solutions for our problems both inside the country and out.
Obama jsut seems to have no solutions, just complaints.
As someone from Illinois once said: "Where's Obama?"

[sparks224]

Makeafence,
I sounds like you%u2019ve bought into the insurance industry lie that healthcare costs are so high because of lawsuits. Checkout this link.

http://www.centerjd.org/private/mythbuster/MB_medical_malpractice.htm

[sparks224]

Makeafence,
I sounds like you%u2019ve bought into the insurance industry lie that healthcare costs are so high because of lawsuits. Checkout this link.

http://www.centerjd.org/private/mythbuster/MB_medical_malpractice.htm

[sparks224]

Makeafence,
It sounds like you%u2019ve bought into the insurance industry lie that healthcare costs are so high because of lawsuits. Checkout this link

http://www.centerjd.org/private/mythbuster/MB_medical_malpractice.htm

[makeafence]

Hi sparks224,

Don't want to get into dueling statistics as we can both come up with numbers to fit our needs all day. But, I appreciate your point of view. And, an issue with tort reform is that there needs to be a heavy check on unscrupulous companies. That being said, here are a few "lies, d@mn lies, and statistics" going the other way: "Medical malpractice liability -- the "tort tax" on doctors and hospitals -- costs the average American family of four more than $3,300 a year, according to a Tillinghast-Towers Perrin study in 2003." and "Defensive medicine inflates health care costs by encouraging unnecessary procedures and referrals that doctors and hospitals prescribe in order to limit their exposure to future litigation." Not saying it is _the_ factor, just a factor. My point was more economic, i.e., higher insurance costs for goods and services negatively impacts the supply of goods and services, ergo that pushes prices higher.

http://www.ncpa.org/sub/dpd/index.php?Article_ID=3047

[sparks224]

Makeafence,
I tried to go to your link and got %u201Cweb site not found%u201D. I looked up Tillinghast-Towers Perrin and discovered they are a health insurance company.

My point is that the reason healthcare costs are so high is not because of lawsuits.
Insurance companies would like to create the false impression that it is because of lawsuits.

[brianbwb-2009]

Mandatory payment to a private, for profit business for insurance is racketeering. Insurance is little more than a bet, so when the private company uses deliberately vague "small print" to avoid paying up for losing the wager, how is the unlucky victim considered "covered"?

How can the government regulate the prices charged for mandatory insurance, if the private companies know the consumer has no choice? Is anyone stupid enough to think prices will not be colluded and fixed?

here is a better way:

1. subsidize med school for top students, require a two to four year period of work in the public system for a middle standard living wage as repayment.
2. use "sin taxes", i.e., tobacco, alcohol, firearms, gambling and marijuana to pay for the construction and maintenance of public hospitals.
3. set controlled pricing standards for procedures at the public hospitals, to pressure private health care prices.
4. return the money diverted from social security for military mismanagement back to the treasury.

Any takers?

[makeafence]

sparks224, sorry if the link was bad. Ambulance chasers are out there and fear of being sued inhibits doctors (and other small businesses) from operating or operating efficiently. I think I said litigation impacted costs, not that it impacted costs significantly. So, I hope we are close to agreement unless you are saying litigation in no way impacts health care costs. I concur that health insurance companies will spin things their way.

My main point was that there are 12-20 million illegal aliens in the country and many are part of the 40+ million uninsured. Subsidizing their care contributes to the cost of health care for everyone. For example, 2004 uncompensated cost of medical care for illegal aliens in California was $1.4 billion.

[brianbwb-2009]

Here is a couple more points, the government should;
5. use the power of eminent domain to obtain drugs considered necessary to protect the public health, such as AIDS treatments, flu and other contagious disease vaccines, and in future, grant non renewable patents for maximum five years for any new medicinal formulations.

Oh yeah, and also;
6. take MS Windows XP and XP64 to public domain, let Microsoft keep Vista. this alone will save billions in software licensing costs to the government.

[brianbwb-2009]

To makeafence, your points do have some merit, but they do not take into consideration that by far most insurance litigation is the result of the insurance companies trying to wiggle out of their contracted responsibilities.

Also even if tomorrow all the illegals went home, do you think that the health care industry won't simply mark up the already unaffordable prices, and cut other corners to make up for the diminished income they once used to bill to the state, or to the feds? These corporations, after all, have to maintain profits, or the stock value drops, and the CEO salaries become even more ludicrous than they already are.

I find a somewhat one sided logic in your postings, as if the government and the private corporations can do no wrong, and that the problems are caused only by the poor, you seem to shrug off government and corporate corruption as if it were a minor thing, when it is the single major cause of the mess that is US health care, next to which the cost of illegal aliens is but pocket change.

[brianbwb-2009]

to makeafence, lets do some supposition, lets generously assume the 1.4b for California is the number for each state, that would be about 70b, OK?

Now compare it to how much the government diverted from the supposedly "untouchable" social security, and medicare programs to fund military pork, such as the osprey and other cancelled multi billion dollar wastes of money, and lets include the Middle East military misadventure (35b per month!), much of which was kicked back into the pockets of the politicians who voted for the diversions? Check the numbers, you will see what I mean.

Do you think that Bush proposed raising the age of retirement by 7 years out of concern for the elderly unemployed, or because he knows that the money paid into social security by the "baby boomers" has been already embezzled by the politicians and the military?
Next to those numbers, your "illegal alien" problem is almost non existant...

[sjc_1]

It seems to me that health care prices are so high because everyone in the supply chain wants such high profit margins. There is no real competition.

I would like to see Medicare expanded to compete with private insurance. The one that can provide the most for the least wins.

Medicare is administered for less than 2% overhead. Private insurance takes more than 20% off the top. Business principles say that the organization that can control the operating costs can compete. Let's let them compete.

[processor2]

I'd support "universal healthcare" so long as the "single-payer" IS NOT THE GOVERNMENT.

AFTERALL, do you really want George Bush to have access to all your prostate exams, mammograms, & Pap smears????

...

[processor2]

I'd support "universal healthcare" so long as the "single-payer" IS NOT THE GOVERNMENT.

AFTERALL, do you really want George Bush to have access to all your prostate exams, mammograms, & Pap smears????

...

[edenbaum]

THERE IS NO SUCH THING AS "GOOD" "AFFORDABLE" HEALTH CARE COVERAGE WITHOUT RATIONING.

[l8c6]

processor2, Do you REALLY want private wealthy controlling special interests having full knowledge of your healthcare without any accountability to the public?

How is it that people who hate government become politicians like--Ronald Reagan? Conflict of interest? We are in serious trouble in this country because of monetary power packing a great influence that is seriously at odds with the founding principles of this country. Our forefathers had an interest in the posterity of this country. These large private centers of wealth do not. They smell of old world elitism and fascism.

No politician Dem or Rep can safely speak out against the corruption because these devils own the media.

The Reps have been the most influenced by these special interests because they worship the bottom line and the bottom line has nothing to due with core values and principles but rather single issue talking points.

[l8c6]

edenbaum, The private sectore touted itself as more efficient than public sector but the reality is that the VA is highly efficient compared to the private sector that spends its money buying off politiicans and stuffing the pockets of CFOs, CEOs and a few others at the top pimped off to do the work of the billionaires who hold the largest number of shares in stock.

[l8c6]

brianbwb, Microsoft and a few others are interested in developing new markets in Africa etc. They're o.k. with letting the people of this country rot.

[processor2]

I'd support "universal healthcare" so long as the "single-payer" IS NOT THE GOVERNMENT.

AFTERALL, do you really want George Bush to have access to all your prostate exams, mammograms, & Pap smears????

...

[processor2]

I'd support "universal healthcare" so long as the "single-payer" IS NOT THE GOVERNMENT.

AFTERALL, do you really want George Bush to have access to all your prostate exams, mammograms, & Pap smears????

...

[guysdigdirt]

AFTERALL, do you really want George Bush to have access to all your prostate exams, mammograms, & Pap smears????
Posted by processor2
-----------------------
Do you really think he cares about your medical exam? He does not spend as much time thinking about it as you do it seems.

[guysdigdirt]

No politician Dem or Rep can safely speak out against the corruption because these devils own the media.

The Reps have been the most influenced by these special interests because they worship the bottom line and the bottom line has nothing to due with core values and principles but rather single issue talking points.
Posted by l8c6
-----------------------

You are right on the first point. But the Democrats are every bit as swayed by money as anyone else and they jump in bed with their supporters just as quickly. Clinton, the male, proved that. Hillary did too when she stuck with him for political purposes. She has proven that her whole life- it is all about her and her having power.

[bellal-2009]

Many people could have coverage but choose not to thinking they're invincible and believe nothing is going to happen to them. A mandatory requirement is essential for this to work. People CAN afford health insurance but they choose to spend their money on other things. I'm one of those people like the example, whose been paying 35-40% of my income on private medical insurance, so I know the sacrifice involved but you know what, it's worth it. My insurance company has an efficiency dept. run by RNs and I'm more than happy to participate because the company is literally out millions of dollars on my family and I'm happy to save them money. In many states I would have been canceled but our state regulates insurance companies rigorously.

[lestb35]

Once we dumb down our health care then we can replace the few high paying jobs left in America and hire Hb1 visa holders for Dr., nurses, techs, dentists (wait I think we might already do that). Oh yea, does this universal coverage include dental.