- ‹ previous
- 414 of 2796
- next ›
Tough Choices
One of the common features of the healthcare reform bills currently on the table is that they include a personal mandate combined with insurance subsidies. What this means is that you're required to buy health insurance if you don't get it from your employer, but the government will help pay for it if you can't afford it.
But what's the right level of subsidy? The draft bill introduced by Sen. Max Baucus today provides subsidies for families earning up to 300% of the poverty level, or $66,000 per year. That's a problem: health insurance can easily set you back $15,000 or more, and requiring families with modest incomes to suddenly add a $15,000 item to their annual budget may be more wishful thinking than serious policy. What's more, politically it's likely to prove to be very, very unpopular.
Much better would be 400% of the poverty level, or $88,000 per year. There would still be some unhappy families, but a lot fewer of them. It's a big difference.
Now, compare this to the much discussed "public option." This would be a federal insurance plan offered in addition to private insurance, and the idea behind it is that the competition would help force down insurance prices across the board. That would also make a big difference to a lot of families.
Ideally, we'd like to have both in the final bill. But what if we can't? So here's the question for the day: if someone put a gun to your head and forced you to choose between (a) a public option and (b) a higher subsidy level, which would it be? Please show your work.
Public option
And open to all, at Medicare rates, with the ability to negotiate drug prices unhindered. Because my life or death should not contribute to someone else's bottom line.
BUZZ! Wrong answer.
Medicare is already running $35 trillion in unfunded deficits. There is no way to sustain what you are proposing without bankrupting the country.
You get an "F"
Medicare
Before you issue your F's, let's have the complete documentation on your claim of a 35 trillion dollar deficit.
He's the $35 trillion tool.
Whoever our bold anon is, in any discussion of health care reform all he can do is throw out this number, no matter how discredited it is. It's his all-purpose answer to any question.
Well you could start with
Well you could start with the NYT, WAPO, the CBO, CNN or I don't know, how about the rest of the MSM.
Or you can just pretend it doesn't exist which is basically what the Progressives are wont to do. The reality is no one is even proposing a solution to that crisis. Until someone does, I'm against the Public Option.
Unfunded liability is phooey
That $35 trillion number is when taken out of context simply garbage. We don't score any other government or private spending in that way. First of all that figure is projected out for 75 years. Moreover it assumes a counterfactual. Essentially it argues that something has to be done since nothing will be done. That is close to a tautology.
If we did absolutely nothing and health care inflation continues unchecked the theoretical cumulative gap between revenue and cost GOING FORWARD amounts to a huge number. The claim that FUTURE gaps constitutes a CURRENT LIABILITY is just crappy special pleading designed to scare people.
At some point or points in the future whether that be this year, or five years, or twenty years from now changes will be made to health care spending. Those changes may be on the revenue side or the cost side or more likely both and when they do most or all of that 'unfunded liability' projected forwards simply vanishes. The theoretical gap between cost and revenue in the year 2065 will never come to be, to solemnly include it as if it were actual debt is just silliness promulgated by Kevin Hassett of AEI and the various people and groups around Pete G Peterson. And those names are not drawn out of nowhere.
It is a crap number designed to drive a crap argument whose goal is the roll back of both the Great Society and the New Deal. And that is not rhetoric. They hate Medicare and always did and don't mind using huge invented scary numbers to further their goal of killing what they see as socialism.
I did see a calculation that
I did see a calculation that the average medicare recipient gets about 3 times what the average recipient puts in. (About 180k v 60k) and this is some of the highest risk increasingly worsening customers (folks doing nothing but getting older and more frail) so I'm not particularly scared of the liability. Expanding the plan with reasonable changes in premiums would do a lot of bring this number down and that's without even taxing the rich more or cutting out ridiculous boondoggles the republicans gave the the pharma industry.
Current dollar scoring
The problem is that dollar calculations don't adequately capture the true impact of inflation.
In 2085 we are projected to have Social Security costs of $26 trillion per year. plus another $22 trillion in Medicare Part A alone. Holy crap!
Yet the actuarial gap between that $26 trillion and then current revenues of $19 and all other such gaps back from 2085 to 2009 represent 1.9% of payroll or .7% of GDP over that same time period.
Which of course is the point that Dean Baker makes just about every day at Beat the Press. Big numbers out of context add more heat than light.
Lets not
Well you could start with the NYT, WAPO, the CBO, CNN or I don't know, how about the rest of the MSM.
Yes the same people that brought us 'Social Security crisis' using equally crap numbers from the exact same people peddling the $35 trillion. The MSM just did not due their due diligence on the Social Security issue, instead it was left mostly to the blogosphere to push the "There is no crisis" narrative to the front. Social Security has no unfunded liability, not over the standard 75 years window or as Hassett and Peterson would have it over the Infinite Future Horizon. It can't have any such liability in real life.
"But, but, but! Gosh someone pointed me to Table IV.B6 in the 2009 Report! And it says $5.3 trillion in obligations over the next 75 years and $15.1 trillion over the Infinite Future Horizon! How can you argue with the facts?"
http://www.ssa.gov/OACT/TR/2009/IV_LRest.html#267528
Well facts are bitches. In this case my bitches. Those numbers certainly exist and are useful in framing actual policy going forward but will never actually eventuate. If nothing is done to Social Security under SSA projections benefits will no longer be fully payable in 2037. At which point revenues would have to be increased or benefits cut. Whichever way the decision goes the projected 'unfunded liability' for the year 2040 or the year 2060 or the year 2080 almost totally vanishes. Poof. Trillions of 'debt' simply gets wiped off the books.
But you have not and outside of a column by Dean Baker or Krugman probably will not see this pointed out in the MSM. The don't get it, don't seem to show any signs of wanting to get it, and on the part of particularly USA Today and the WaPo actively go out of there way NOT to get it. On Social Security and Medicare it is not good enough to say "I saw it on the news", because mostly they are just repeating numbers fed to them by people with not so hidden agendas.
When somebody says 'unfunded liability' you can be sure that they are either spinning or the victim of spin, it is a technical number taken entirely out of context.
Public opition doesn't mean government financed for all
All proposals for the public option are based on the premise that it will be funded by participant premiums, subsidized only to the extent that they would also be subsidized for a private plan, based on income. The argument for the public option is that it would be cheaper because of lower administrative costs and no need to make a profit, not that it would be government paid (admittedly, the media does a piss-poor job of explaining this distinction)
What you say?
Hear, hear! Short, sweet, and CORRECTAMIENTO!
So lets see... we have 15%
So lets see... we have 15% of the U.S. uninsured. Included in this percentage is a large number who are willingly uninsured (ie the 24 year old with no health problems) and those between jobs who are temporarily uninsured.
So, to solve this problem, the benevolent Dems want to FORCE those earning less than $66,000 a year to pony up $15,000 (more than 1/3 of your post tax income) to pay for something they likely don't need. Since this is about the average family income in the country, we're talking about a huge number of people here. Care to wager on whether those you hurt by such legislation will outnumber the 15% who desperately need health insurance? I'm definitely taking the over...
BUZZ. Good analysis
But no solution.
You get a "B+
Actually a terrible analysis
That should get more like a D+
No family making under 300% of the FPL will be paying anything like 33% of their income, not at least under the plans whose language we can actually inspect.
Under the House Bill people making between 133% and 400% will have their premiums limited on a sliding scale between 1 1/2% of income at the bottom to 11% at the top.
http://edlabor.house.gov/documents/111/pdf/publications/AAHCA-BillText-0...
Sec 243: Affordable Premium Credit (starting on page 135)
Certainly you could pay $15,000 or more for a family policy today but the question is what that would end up costing net of the subsidy. Plus I would suspect that most of the people making more than 400% of FPL are in jobs that have employer paid coverage to start with or will be required to start supplying it.
But no currently uninsured family is going to have a $15,000 bill dropped on them or pay 33% of their income. There is a reason why the House Bill is called the American Affordable Health Care Act and is is NOT because Waxman et al are just pulling your chain.
The HELP formula is less generous and from what I see of Baucus maybe even less generous than that, but the end result is not going to be punitive in the ways even Kevin's main post asserts.
What does it mean to NEED insurance?
What, exactly, do you mean when you say that insurance is something that young people likely don't need? The way that health care works is that nobody needs it until they have serious health problems. So without insurance, some people pay nothing for health care, and some people pay catastrophically much. The point of insurance is that it is INSURANCE against catastrophe. Since everybody can potentially develop serious health problems, then everybody needs insurance, unless you have enough money to pay for any contingency.
Daryl McCullough
Ithaca, NY
The point here is that young
The point here is that young people get a serious illness much less often than older folks and since they are healthier can recover with less or sometimes no medical help except what you can get over the counter. They get sick/catastrophic trouble so much less often the odds are better if you just skip the insurance.
It doesn't actually work that way of course because we only let you die of lack of insurance if you're poor or minority.
Young People are Immortal!
Everybody knows that twenty-somethings live in a cocoon that insures they will never get in a serious car or motorcycle accident or get hurt skiing or come down with swine flu. And if they do happen to break their heads, backs or legs a little over the counter ibuprofen and a day or too of rest will fix them right up.
Because who ever heard of a healthy, active young person having a sports accident? Or getting accidentally caught up in some incident outside a club? Or being assaulted by a mugger? Why trauma center staff would faint if some young person was wheeled in. Whoever heard of such a thing?
Snark off.
Nobody plans on getting hit by a bus. Or having some guy open up his car door just in time to intersect your bike. That young people are statistically unlikely to be struck down by a heart attack doesn't mean they don't need health insurance and more than being a good driver means you don't need car insurance. Because the contingencies are not all under your control. You can be healthy as can be, but that won't help you if your house collapses on you in an earthquake.
Kevin said about mandated
Kevin said about mandated universal coverage: "What's more, politically it's likely to prove to be very, very unpopular."
Exactly. And although the availability of a public option will lighten the burden of a mandate, it will not completely remove its unpopularity.
Over the years, I have seen many young people pick one job over another on the basis of bottom-line take-home pay, without paying attention to the benefits offered.
So there is a lot of political risk in this for the Democrats. I don't know what the perfect approach would be, but I find it hard to believe that all those who will be forced to get insurance, even if partly subsidized, will appreciate it.
BUZZ!
Commentary. No solution.
Incomplete. Resubmit in the morning.
OK here is my proposed
OK here is my proposed solution: Pay for health care out of tax revenue. Like defense, police, fire protection, public education, transportation infrastructure. Eliminate completely all insurance overhead. Possibly use a combination of federal and local taxes. Maintain (and possibly increase) means-adjusted co-pays to make sure the system is not abused. Yes, increase taxes to pay for this. Ultimately, the money comes from somewhere. To the extent that the idea is that health care costs should be spread over the whole population, and coverage should be universal, there is no reason to maintain a separate, complex, expensive-to-run mechanism for collecting health care payments when we have a perfectly good one already in place for all the other public goods mentioned above. Oh yes, and -- before starting, declare health care to be a public good to which everyone has a right.
Young people are already
Young people are already forced to buy auto insurance - at rates far higher than older people. When you're young it's just a fact of life that some things cost more. In fact, most young people are just weening themselves off their parents' insurance (health and auto) as they enter the work world. When they eschew health insurance they do so mostly because they never really thought about it before - not necessarily because they feel invincible. But that feeling is irresponsible as young people discover - often too late - that they NEED health insurance - especially if they get injured or sick.
Mandatory auto insurance is
Mandatory auto insurance is a totally different thing. It protects others (society) from the holder -- it is not for the benefit of the holder.
A lot of people believe that they should be able to take whatever risks to themselves they feel like taking. And many people, especially the young, do not believe that something bad can actually happen to them -- they think misfortunes only happen to others.
BUZZ.
JS, auto insurance isn't for the holder? Really?
No soup for you!
"F"
Put on your glasses -- we
Put on your glasses -- we are talking about mandatory auto insurance -- not just auto insurance. What is mandatory is the liability part -- liability to others.
Health Insurance Is The Same Thing
"Mandatory auto insurance is a totally different thing. It protects others (society) from the holder -- it is not for the benefit of the holder."
A mandated health insurance policy also serves to protect the community from the irresponsibility of the individual. Without insurance, costs of catastrophic health events are just passed off to the community thru cost shifting.
A mandated health insurance policy is really about personal responsibility, a subject I had imagined Republicans would believe in.
Mandates aren't about
Mandates aren't about personal responsibility-they are a punitive tax on the poor for not having white collar jobs with decent healthcare benefits.
Have you been drinking some Calvinist Koolaid?
Employee mandates would kill me financially, and I'm sure they'd be junk insurance that wouldn't cover the important things that I already use my meager income for.
A couple of questions for Amanda
Have you actually looked up what your premium would look like post subsidy? If not how do you know it would "kill you"?
And have you examined the Essential Benefits Package all insurance companies would have to offer? If not why would you just assume a priori that the result would be "junk insurance"?
The benefits package is quite comprehensive with among other things no annual or lifetime limits. It is pretty hard to see "important things" not included. But of course you would have to start by looking. For example at Sec 122 (b) starting on page 27
http://edlabor.house.gov/documents/111/pdf/publications/AAHCA-BillText-0...
____________
If you are not jaded and cynical about the way things have been run in this country for at least the last three decades you have just been sleep walking. I get that, I lived through it too. But to some degree that result was planned, the powers that be want you to know that the game is rigged in their favor, they counsel despair and distrust and never more so than in government.
I am not saying that everyone should be singing Happy Days are Here Again! But we do have a chance to get this country and government back on the track it was on before "Big Government is the Problem" became a near truism.
Call it New Deal 2.0 or Social Democracy or whatever. It doesn't have to be an impossible dream. Just remember the forces of Reaction's strategy is just to wear you out to the point you quit he game.
The obvious reason why the
The obvious reason why the health insurance analogy is bs is that the government isn't forcing anyone to buy cars and auto insurance. If you take public trans, bike or walk, then obviously the analogy breaks down pretty damn quickly.
Health insurance isn't ONLY for the holder, either.
Interesting analogy to driving insurance, especially since my state (the Commonwealth of Massachusetts, emphasis on the common wealth) has now made health insurance compulsory. I believe some of the logic behind that is a contention that yr health is NOT only yr own business, but impacts a great many besides yrself as well. It cld be as ordinary as dragging yr ill self around cuz you don't have insurance or sick days, thus sharing yr germs with all whom your job exposes you to. It might well be the inordinate use of ERs, esp. by the uninsured. When I was young, I was frequently sidelined by health problems & would gladly have insurance, but having just begun my chance to "make it", just cldn't afford the rotten deals available. I'd be quite surprised if today there aren't any number of kids in my prior plight. And how many would change jobs inna minute, if their pre-existing conditions or benefit levels weren't holding them hostage? Their frustration & negativity poisonss the marketplace just as surely as a round of sneezes. We all live far too close together not to be affected by each other's health, and that includes our economic health to boot.
I really like the public competitive option & suspect that streamlined processing, together with diversion of even a fraction of the loot-stream from private insurers' coffers would more than suffice to cover the changes.
BUZZ! You were soooo close
...why did you stop there? Part of the answer is the model used for car insurance. Do we all buy the same auto coverage? Of course not. Does a 21 year old need the same health insurance coverage as a 55 year old? No.
Part of the solution is to offer polices that fit the individual and not a one size fits all. If a family wants basic coverage and can't afford the premium let the government subsidize it. But if they want something more than basic coverage- say dental- then they have to pay the additional premium themselves. We have to stop pretending that people can't think for themselves and make decisions on their own, that government must do all of that for them.
I'm giving you a B+ but I expect better work from you in the future.
But Anon missed by a mile!
The House bill allows insurers to offer three levels of coverage plus an option: Basic, Enhanced, Premium and Premium Plus. And the Basic Level doesn't cover adult dental or vision.
Meaning the bill meets your basic demand here, nothing limits people from adding things like Long Term Care or Dental or Vision and so make those decisions on their own.. I don't see frills in the package, though some people might disagree on the issue of mental care parity.
So I think I will have to give you a C- for not doing the assigned reading and trying to sneak by with the Cliff Notes Version.
Subsidies
I would go for the subsidies, assuming:
1. The subsidies would be adjusted regionally. I think Medicare reimbursements are. It would be impossible for a family of four in NYC making 100k to afford private insurance without subsidies. Same is probably true for LA, SF, DC and Boston.
2. It would be absurd to have a mandate but not have very strict profit and premium controls on insurers, and I assume a final bill would have these.
3. It's likely there are a lot of people who make too much to qualify for Medicaid but still couldn't afford the public option without subsidies.
Of course, it all depends on the details, but a public option without subsidies would likely still be unafforable to many people, while subsidies with tightly regulated insurers can be affordable to all.
Much is already in the bills
1. There are ceilings on total out of pocket costs that shouldn't make a family in NYC unable to pay. Remember there are strict limitations that don't allow variations in premiums within any given area, no family would be paying more for individual insurance than any other.
2. The House Bill has a very clever method for controlling premiums and profits. It is in Sec 116 and in perhaps the most important two sentences in the bill. In short if companies don't pay out a pre-set minimum percentage of premiums in the form of providing medical services they have to rebate the difference. That is they can't make money just by insuring people who don't need care, or by systematically denying care to those that do. The old business model which was based on predation is forced to adapt to one where the basis is service. You can bet this section is being battled hard by the industry.
3. There are subsidies for the Public Option that work off the same formulas as do the subsidies for private insurance.
So I would think your concerns have been adequately met, if that is we get something reasonably close to the HELP/HR3200 model.
Not quite
Bzz.
The original question is _higher_ - 400% FPL vs 300% - subsidies, not subsidies or no subsidies.
The point is where the money goes
A mandate just funnels my money to the insurance companies and takes away my choice
A mandate with subsidies just forces all taxpayers to give their money to the insurance companies without choice.
A strong public option lets the taxpayers money stay with the govt and be directed toward actual health care not profit.
To me there is no question that the public option is the way to go
and if there is no widely available public option than the mandates need to go even if the subsidies are raised
If you're young & you live in NYC
The mandate w/o public option is gonna be a killer. 3 x poverty level doesn't do sh*t for you here.
I wish I trusted we would get either ...
affordable public option or adequate subsidies. The way our representatives have been dicking around about this, it is hard to believe we'll get anything that doesn't make the system worse for most people while presumably profiting their donors.
Can it happen here?
I *know* exactly what the
I *know* exactly what the cost of health care through my employer is right now, and I can't afford it. Any subsidized mandate would have to be pretty damn subsidized in order for me to prefer paying a penalty.
Many young people don't have health insurance because:
1. They are working crappy jobs just to make ends meat out of college because its a recession and they can't find a decent job related to their degree (me).
2. Many decent jobs don't offer health care or the benefits are simply too expensive.
3. Having to worry about stuff like student loans and credit card bills is simply too much of a hassle compared with health insurance.
Please, please don't assume that young adults are woefully ignorant of the need for health care. This has nothing to do with feeling young and invincible, the bottom line is costs. In my case, as a transsexual female, unless mandated costs are pretty damn cheap, I couldn't afford to transition at the same time. Oh, and of course it doesn't take a genius to realise that trans related health care probably won't be covered anyways.
But if white privileged cissexual male Ezra Klein says its good, then by gosh, it must be good!
How does the subsidy work?
I'm curious about how the subsidy works. Do you get a full subsidy up to $66,000 and then your next $15K in raises goes straight to insurance premiums? (This seems like a ludicrous setup, so I'm guessing the answer is no.) Or do you get some sort of partial subsidy up to $66,000, after which you are on your own? If so, how far down do you have to go before you get full (or near-full) subsidy?
The other question is how well will the public option keep down costs? If we assume insurance company profits of 15% plus addition stupid overhead (overpaid suits in the executive suites plus in-house legal staff to fight contested rescissions etc.) of say, 5%, then the maximum reduction you could get from public option might be a 20% (taking 15k yearly premium down to 12k). Even that is a lot to ask somebody trying to pay a mortgage and raise a family on $60k per year. OTOH maybe the public option won't save much of anything, especially at first as it just gets started.
Probably, if you have to choose, higher subsidies are better to start with, but public option would do more as time went on. But right at the moment it's all guesswork as we don't know the details.
I'm pretty sure that even
I'm pretty sure that even the Baucus plan has relatively generous subsidies up to 3xFPL and then structures subsidies on a sliding scale up to 4xFPL so that a family's out of pocket expense is not more than something like 15% of income (the latter part is fishier in terms of what details are known in the public domain than the former part).
Some more questions
Is that $66K based on your gross income or on taxable income? Does it cover just wages or does it include all income (capital gains, interest etc.)? Can you use income averaging on it if you get a windfall in one year? And on and on...
All those things will have a big impact on how well the subsidy works, and on if this will be an unpleasant debacle for reform's authors.
.
Well, presumably the subsidy could be sufficiently boosted to make it cheaper for me as a user in the short term. But if the subsidized no-public-option system inflates costs at a higher rate, no matter how high the subsidy, eventually it will still cost more than the public-option plan. So no math needed: whichever keeps costs down more in the long run will, necessarily, be cheaper in the long run. On the other hand, if I were planning to die soon (but below 65), I might prefer the short-term payoff.
...but the government will
Does this mean the government will print money, or the taxpayer will pay for the subsidies plus the administrative costs, or we will borrow money from the Chinese (assuming the well is infinite)?
Seems like just a lot of bloated liberal spending to me. Where are the cost savings? I want to hear cost savings, like tort reform, outsourcing patients to Thailand, getting shed of the illegal aliens, getting serious on medical fraud--something. Obama is a liar of Cheney magnitude. He says illegal aliens won't be covered, but even if you don't know what's in the bill, everybody knows Obama wants to give citizenship to illegals to win future elections for Dems. This isn't reform; it's buying the Hispanic vote--pure corruption. If we make it any more attractive for illegal migrants, they'll pour across our borders. Reagan's amnesty for 3 million brought in 30 million more. An Obama amnesty will no doubt entice at least another 100 million more illegals requiring "free" healthcare and obstetrics. This is reform that will lower costs?
Cost savings are indeed ignored in all this.
If you read Maggie Mahar's Money-Driven Medicine, you'll see her estimate that one-third of all medical spending is wasted. Unfortunately for your particular anti-immigrant paranoia, it's not because of brown-skinned people stealing your money. Nor is it because of the wingnut's favorite canard, frivolous lawsuits. Instead, we waste money on health care because of the profit motive embedded in our medical system; doctors, hospitals, insurance companies, drug companies, they're all there, to one degree or another, primarily to make money, not deliver health care. So, take your crazy, obsessive, racist nonsense to some other forum. And did you really say, "outsource patients to Thailand"? Are you friggin' nuts?
>Seems like just a lot of
>Seems like just a lot of bloated liberal spending to me. Where are the cost savings?
Cost of single-payer health care per family in Canada is half that of the USA, for better outcomes. And we don't even have the most efficient system.
Market-based systems are only effecient where there's genuine competition, no price-fixing, and you can tolerate failure. That isn't true of medical systems, anywere.
Also, this thing neds a
Also, this thing neds a speklchecker.
Hmm, Luther.
Seems like you have an issue with undocumented workers.
I hate to rain on your parade, but your federal and local taxes already go to providing medical care to undocumented workers. Medicaid already covers emergency services and many local public sector providers provide services to those not eligible.
So, get a grip. Your racist fantasies are laughable.
Hospitals are ethically and legally required to provide services to all who need emergency care. Should you require treatment in England or France you will get it.
Try griping to your local business that hires undocumented workers. If there was a significant legal cost to hiring the undocumented worker they wouldn't have jobs and wouldn't live here. There really is a simple solution to the issue, but neither Democrats or Republicans want to implement it.
Cost of single-payer health
Bruce sez: "Cost of single-payer health care per family in Canada is half that of the USA, for better outcomes."
True enough. The question is whether just putting in some sort of public option would get the U.S. to canadian levels of efficiency. I tend to think it wouldn't, if for no other reason than that we have much better paid doctors and huge numbers of even better paid specialists.
and by the way
As 58 year olds with a good income but with pre-existing conditions we would get diddly out of a subsidy but would likely benefit from a public plan. And if coverage is mandated the rest of the plan better be really good. But on the other hand the status quo really sucks. My current coverage is perhaps the last I will have until Medicare and 7 years is a long way away.
krugman on the public option
http://krugman.blogs.nytimes.com/2009/09/08/why-the-public-option-matter...