On Models For the Future
Houtopia: A Model For The Future?
With all due respect to my good friend Houtopia, I truly hope not. Massachusetts' plan (or, as I've referred to it in the past - Socialism without the socialism ... but all the taxes) is based on the old John Breaux saw of requiring people to buy health insurance, thereby driving down the overall price (so the thinking goes) by forcing healthy 20 year olds with little-to-no perceived need for health insurance to pony up and share the costs with us old timers.
Pardon me while the libertarian side of me breaks loose. But that is an atrociously horrible idea to expand nationally.
Maybe it's a bit of provincialism in me when I offer Phil Bredesen as more of a leader for progessive thought on health care. His "Cover Tennessee" plan takes much the same tack as the Massachusetts/Individual Mandate concept, but the key difference is that it is voluntary, rather than mandatory.
Neither plan is really capable of tackling the 800 pound gorilla on the health care playing field - rising costs and expanding need (perceived, real, or otherwise). But that's not really a role any single state is going to be best suited for anyway.
As Bredesen makes his case for the Tennessee plan:
Now, remember these two words: Affordability. Portability. These will be the core principles behind our approach.My definition of affordable is no more than a hundred dollars a month for an individual. We plan a benefit package that has a total cost on average of about $150 a month. Of that, the state will pay $50. Where an employer is willing to contribute, a $50 contribution on their part will leave the employee to pay $50. If an employer won?t or can?t participate, and the individual has to pay it all, it will still be no more than a hundred dollars.
The prices I?ve used are the average; we?ll adjust the premiums for age ? older people simply have higher health care costs. We?ll also adjust for whether a person is a smoker, and for whether a person is substantially overweight. People who take care of themselves should not have to pay extra for those who don?t. It?s time to move past political correctness and instead to reward personal responsibility.
In order to achieve these prices, we obviously can't do everything and some benefits will be limited. For example, we may have to exclude coverage for certain pre-existing conditions for a limited period of time -- say 6 months. However, this is practical insurance that would provide a generic drug benefit for $10, routine doctor visits for $25, and emergency room and hospital care with limits. And no one would be turned away for medical reasons.
Some commercial and public plans ? Healthy New York, for example ? try to use large deductibles to help keep the costs down. In other words, you might have to spend a thousand dollars out of your pocket before you get any benefit at all. We want to do it just the opposite: we insure doctor visits or prescriptions from the beginning, and keep costs down with other limitations. It?s important to encourage preventive care and early treatment, not discourage it.
As this is a state initiative, we?ll have the ability to impose enforceable residency requirements. There will be initially a requirement that this be offered to people who don?t currently have health insurance so that we don?t encourage employers to terminate existing plans.
And a nice little comparison over in the Boston paper ...
Massachusetts Gov. Mitt Romney, a Republican, has said the "individual mandate" is key to bringing health care costs down for everyone. Bredesen disagrees."It's kind of a bizarre situation," said Bredesen. "You have the Democratic governor of Tennessee talking about market forces, and the Republican governor of Massachusetts talking about mandated coverage -- the world is turned upside down!"
Market forces. Such a nifty concept. Now THAT'S a model for the future I can get behind.
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Politics-20066 Comments
Greg,
Two questions. One, you never state your theoretical opposition to the program other than your libertarian leanings. But why does that apply with particular force here? Government forces us to do all sorts of things. What I'm interested in is why exactly your ire is raised at this compulsion?
Second question, is are you exercised by the requirement that everyone maintain auto insurance?
In reverse order:
2. Yes, but to a lesser degree. That I make use of the freeways by use of a vehicle is much more optional. At present, I do not excercise that option ... therefore, no cost (recognizable, of course) out of my pocket. But even if I were sporting about town in a hotrod, that's something that strikes me more akin to a social security net done by private individuals (albeit be government decree). I don't want to get totalled by some punk with no insurance, therefore I accept the social contract that says we all buy insurance. Begrudgingly ... but I accept it, regardless.
While I disagreed with the law when it was enacted, the old timer in me at least acknowledges that there's some individual quid-pro-quo going on here. I accept the terms of the construct and I, theoretically, don't have to worry about losing a car by such means.
1. Fair point ... here's a swing at that one. First, I think the libertarian in all of us ought to take inventory of those things that we do accept the government require of us. Clearly, I'm not one to go so far as to suggest the income tax be repealed - there is a price to pay for progress, after all.
But the debate over health care strikes me as different than most others when it comes to having a figurative gun put to my head to demand I do something I might not otherwise do. The effects of having or not having health insurance apply, in terms of health, primarily to me. Unless I go hacking and wheezing on everyone around me, or unless I go starting another beubonic plague, I'm clear on this one, though.
The "problem" with health insurance derives from the business model that the health industry operates within. It's that model that leads to inordinate uncertainty and the occassional bouts of steep price inflation that compete with a public concern for stability and professionalism among health care providers. I can at least respect that such a tempestuous business model makes insurance the best last resort to finance it (can you really see a hospital saying they need X heart attacks to happen in a given fiscal year?).
So what I see this plan as is that I'm now told I have to get health insurance so that somebody else can - no, not have better health - but have a lower cost to attaining their better health. In other words: our handsomest politicians get together and realize that out-of-pocket costs are too high, so they go about fixing the problem by rounding up all the healthy, non-covered 20-yr olds to make the financial situation of grandma & grampa better.
But there's no individual tradeoff there. What does that 20-yr old gain - at the point of savings by grampa or later on? That's where it gets vague and overly reliant upon our weakest social science - economics. I'm no longer looking to my neighbor or the guy I'm cutting off in traffic as the person I've signed that social contract with - I'm looking at my fellow age cohorts and getting pretty riled up about how we got nothing out of that decade or two when we never needed health insurance so that grandma didn't have to dip into her changepurse too deep in order to have that 10th breast examination.
Now, none of that is to truly discount the individual benefit of health insurance. I'm all for seeing universal coverage for every kid in America (and I'm less picky about the means for this) in order that they might get off to the fullest opportunity they've got in store for them. I'd certainly recommend everyone who could afford it go out and get themselves a bushel full of it. But I'm not ready to make health care the target of the next tax revolt when such a plan does nothing to seriously address the real problems in health care: rising costs.
This, to me, is the inverse of the school choice argument. Though I support school choice in a plethora of ways (including vouchers for low-income area school disticts), I don't pretend to think that it addresses the fundamental problems of school: improving the quality and relevance of actual learning. I do support it since it attacks two areas that deserve recognition: parent satisfaction with schools and the time-limited nature of a kid's school years (ie - they don't have a decade to wait in most cases).
In this case, it's the lack of a choice ("You must buy health care, or we'll break your legs!") that isn't addressing the root problem. And while it may very well address an economic problem, I'm not sure that I'm willing to bet a few fractions of GDP on it.
Greg,
The central debate in healthcare over the past 50 years has been the balance between developing a market based solution vs. a government based one. You seem to argue that the very need for universal coverage is subject to debate. I think that argument is well settled.
From a business perspective, healthcare costs are the single largest driver dragging our economy down. Every economist, whether liberal or conservative accepts the doctrine that universal coverage in some form is needed to drive down costs.
Second, we as a society have made a moral decision to guarantee that sick people will be taken care of. You have no health insurance now. But in the event you are in an accident or have a catastrophic health issue develop you will be treated. The "emergency" care component of healthcare is beyond debate in our society. But it is that compassion that again drives cost.
Moving to universal coverage is the only answer. I like the Mass. plan for precisely the reason you do not--it balances rights with reponsibilities. Healthcare is a right in our society, but we have lacked a requirement that the individual take a role in making sure that happens. This plan does that. It is a market based solution to healthcare.
I don't quarrel with the goal of universal coverage so much as I do the means to acheive it. That it would take a governmental decree to solve the problem (one that is much smaller in Massachusetts than it is in many other states) speaks volumes to the fact that, at present, universal coverage isn't feasible without a market intervention.
In the case of Massachusetts, the intervention is the figurative gun to the heads of it's citizens. Granted, that presumably drives down the cost to some/most of the insured. But to the new college graduate who's convinced of his/her own immortality (the validity of which, I clearly won't defend), s/he's out $100-150 a month minimum - essentially a tax on him/her for the primary benefit of someone else. That benefit is where I take issue the most with this plan.
If I dare digress to the example of education, I think we'd both agree that if I (a single guy with no known children) were to pay property taxes that helped pay for the education of others, I derive some share of benefit from that overflow - either by being able to hire intelligent workers, benefitting from the ingenuity of someone else who benefitted from that education, or simply knowing that I stand a better chance of getting correct change at Walgreen's. Either way you slice it ... there's some benefit for all as I see it.
But going back to health care ... where's the benefit that goes to the person we've now forced to buy health insurance? That's the part I just don't see very clearly in this.
At least in the case of Tennessee, there's a tacit recognition that, if everyone wants health care coverage, then let the government intervention be on the side of making the economics work towards that end. At the state level, that may well mean just chipping in a third of the cost and devising a lowest-common-denominator health care plan. Admittedly, that still leaves a boatload of work to do at the national level (where I generally turn things over to Michael Porter for the bulk of my sentiments). I don't doubt that it will be a slower move towards universal coverage. But it at least allows the movement to be driven by a free market rather than just a market. The benefit of that being that there are typically more revolts and protests against the latter than there are for the former.
Given that, if universal health care is to be the goal, then why not see to it that it lasts rather than being contingent on the one party that believes in health care as a right being in power?
But going back to health care ... where's the benefit that goes to the person we've now forced to buy health insurance? That's the part I just don't see very clearly in this.
The benefit is that person no longer has to rely on charity care in an emergency room when he gets sick enough to have to go the doctor. Or no longer gives up all that productivity because he's out of work for a few weeks. Or no longer has to rely on unemployment because he's out of work for several months. Or no longer has to give up his house because he's saddled with credit card debt to pay off his bills.
Having a healty society is just as important as having a well-educated society.
Given that, if universal health care is to be the goal, then why not see to it that it lasts rather than being contingent on the one party that believes in health care as a right being in power?
Universal health care would be so popular it'd be the 21st version of last century's political third rail, Social Security. Try to eliminate it through privatization like George Bush did last year and you'd probably have the same results he did.
Ryan,
Those are both points that I get ... but I question how marginal we're taking the case. Show me some math on that and I might be more inclined to revisit my preference. But I don't exactly consider a decimal point improvement in productivity growth something that equates with the need to offer universal education. One is an underlying fundamental element of growth. When you say a healthy society is just as important as an educated society, my first response is to note: "Well, great, we've pretty much got a healthy society these days." So I'm still not seeing the benefits as clearly in order to justify being forcibly sent into a sales meeting with an insurance salesperson.
On the second point, I think there's a bit of confusion in terms. "Universal Health Care" is an end, not a means. "Social Security" is a means toward (principally) eliminating/reducing poverty among the elderly. So your statement doesn't stand on it's own. Universal health care may well withstand the test of time much as I hope Social Security does. But how do you universally cover everyone? Your comment on that may well be one that makes a case for a single-payer plan ... or HSAs ... or pretty much anything else. That's the entire point I'm getting at here.
Fundamentally, for me at least, this seems to come down to the old saw of "equal opportunity" versus "equal outcomes." I'm fundamentally opposed to the latter, but adamant as all hell about the former. That's the breakdown I see in comparing the Tennessee plan to the Massachusetts plan, and hence my preference for a voluntary mandate.