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Tilting at Windmills

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January 10, 2007
By: Kevin Drum

COMMUNITY RATING....One of the arguments in favor of limited universal healthcare proposals -- like the one Arnold Schwarzenegger unveiled on Tuesday for California -- is that it's the best we can realistically hope for. Sure, an honest-to-goodness single-payer system might be superior, but special interests will never allow it to happen. Better to mollify the special interests and take what we can get.

Over at TNR, Jonathan Cohn suggests that it's not that simple. In fact, his guess is that special interests will fight just as hard to kill any plan, no matter what we do to try to get them on board:

This is one reason that, paradoxically, plans like Schwarzenegger's -- which seek to graft universal coverage onto the existing private insurance system, rather than create a single-payer plan that would supplant private insurance altogether -- may actually be as hard, if not harder, to accomplish politically. Any plan for universal health care is bound to offend at least some special interests. And these special interests will fight hard. So while trying to soften their opposition with a less radical plan helps, it may be more important to craft an alternative that captures voters' imaginations and rallies support behind it -- even if that means proposing even more sweeping changes.

The same thing is true nationally. Although Schwarzenegger would surely resist the comparison, his plan has more than a few elements in common with the Clinton health-care plan. The architects of that scheme tried very hard to come up with something that would please various stakeholders. That's a big reason that they, like Schwarzenegger, rejected calls for a single-payer system and settled instead on a proposal in which most people would continue to get insurance through the private sector. Yet, to their dismay, few of those stakeholders became enthusiastic supporters of the Clinton health-care plan. In fact, quite a few attacked it, pretty much sealing its defeat. It's easy to imagine a similar scenario playing out here.

This is the reason I swing back and forth on whether it's worth supporting half-hearted plans like Schwarzenegger's.

On the pro side: (1) It's better than nothing. If it helps people even a little bit, that's better than letting them suffer while we all wait for nirvana. (2) Liberals have gotten burned more times than I can count by not accepting half measures when they were offered. Inevitably, a decade later, we wish we'd accepted the compromise and then worked to improve it. (3) It might work. Stranger things have happened.

On the con side: (1) Cohn is right. You need public support to overcome special interest inertia, and the only way to get that is with a simple plan that people understand. Compromises just don't generate the requisite enthusiasm. (2) Compromise plans sometimes lock weird incentives into place forever. Just take a look at how the United States ended up with employer-based healthcare in the first place. (3) One of the whole points of single-payer healthcare is that it saves a lot of money by reducing administrative costs. Compromise plans don't. Without the cost savings, it's possible that we'll end up with a system that's even worse than what we have now.

In the end, the reason I support Schwarzenegger's plan is because it includes insurance company regulation, and in particular because it enforces community rating (i.e., a requirement that insurers accept all comers at the same price, regardless of age, occupation, or medical history). And while I can't back this up with a solid argument, my gut tells me that community rating will eventually put private healthcare insurers out of business. Even with universal coverage, there are just too many contradictions in trying to run a profit-making insurance company while being forced to insure even people that you know for an absolute fact you're going to lose money on.

I might be wrong about that. Insurance company managers are clever folks, after all, and might very well figure out how to game the system just well enough to stay around. But there's at least a chance that Schwarzenegger's plan will lead to their eventual demise, and thence to a more efficient, more rational healthcare system. For now, that prospect is enough to get me on board.

Kevin Drum 12:35 PM Permalink | Trackbacks | Comments (76)

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Comments

I think you're correct in your conclusions. The Schwarzenegger plan would institutionalize regulation of health insurance at a very deep level -- not just guaranteed issue to all comers, but regulation on permissible levels of profit and administrative costs. This is a step toward single payer (making insurance companies intermediate contractors to a controlling government), and single payer probably could not happen in a single bound.

Posted by: MQ on January 10, 2007 at 1:48 PM | PERMALINK

Perhaps we should accept that some interests really would be hurt by a big move into UHC, and accomodate their concerns instead of telling them to go to Hell. I'd rather get the insurance agencies on board with some pooled plan to let them administer a Medicare-like plan for everyone, made "affordable" by taking a certain percentage of income (isn't the whole problem with traditional insurance, the fact that policies are normally charged as a flat monthly fee depending on non-income paramenters?) That's better than having them fight off any reform, and why should those who invested in insurance companies just have to lose it all?

Posted by: Neil Bates on January 10, 2007 at 1:56 PM | PERMALINK

MQ:Does it regulate profit and admin. costs?

If so, actually I could support it as a half-measure? Any plan to reform the health system needs to start at those two points, or it's less than useless.

Community rating isn't even that useful, because employer based health-care is a captive market situation.

Posted by: Karmakin on January 10, 2007 at 1:58 PM | PERMALINK

Although Schwarzenegger would surely resist the comparison, his plan has more than a few elements in common with the Clinton health-care plan.

Kevin, I think you're right. It's just another version of HillaryCare. It'll subsidize the health insurance of illegal aliens causing more Muslims and Mexicans to cross the border to this country creating a even larger number of illegal aliens in this country. It'll make it illegal not to have insurance even though some people don't want it denying them freedom of choice and making their lives more expensive.
It'll also create a huge state bureaucracy which would make health insurance much more expensive because it adds a extra layer to getting health insurance. Also it doesn't try to control the high costs of medical malpractice suits which is one of the primary reasons for the high cost of health insurance. This means taxes will become out of control and spiral as government tries to keep up with paying health insurance costs.
Suffice it to say the plan is pretty bad.

Al

Posted by: Da Al on January 10, 2007 at 2:00 PM | PERMALINK

I'm usually not one to occupy the squishy middle, Kevin, but I believe your argument in favor of Musclehead's plan are spot on. As long as right-wing slimeballs like Newton Leroy Gingrich are in the pocket of big health insurance middlemen like Golden Rule Insurance (do some research on it), we are never going to get to a true single payor system. Better to get some incremental progress today, than nothing tomorrow. The regulation component of Ahnold's plan is also very appealling.

Posted by: The Conservative Deflator on January 10, 2007 at 2:02 PM | PERMALINK

One of the oldest ploys is to make up something that looks nice and use its failure to poison the well for future endeavours along that line. Medicare Part D should do excellently for an example. Others would be government auto insurance in B.C. and Manitoba, Canada, which were totally bitched by Conservative governments because successful government programs are testimony to the lies of them being "communist" in nature. The bagman rules political policy.
Change still begins with choice of candidates, not election of sanitized and controlled supplicants.

Posted by: opit on January 10, 2007 at 2:04 PM | PERMALINK

Kevin wrote: "Sure, an honest-to-goodness single-payer system might be superior, but special interests will never allow it to happen. Better to mollify the special interests and take what we can get."

Well, that gives new meaning to the expression "Defeatocrats". Let's just accept defeat now, without even trying.

Of course the Democrats in Congress know just as well as the Republicans do, that it's better to "mollify the special interests" and "take what they can get" in return -- namely, campaign donations.

Posted by: SecularAnimist on January 10, 2007 at 2:04 PM | PERMALINK

Do not blithly assume that a single-payer system would be superior. That amounts to monopsony power and whether it is superior for YOU depends on who the single-payer represents. If you are a worker injured on the job and must look to the Workmen's Compensation system for coverage, in many states you will find that it has been captured bureaucratically by employer interests, and it will do everything possible to avoid treating your injuries. And, of course, you gave up your right to sue for damages when you accepted the job covered by it.

Posted by: RWC on January 10, 2007 at 2:09 PM | PERMALINK

Neil- legitimate interests, sure. Purely parasitic insurance rackets ^H^H^H^H^H^H^H companies- no way. And they will indeed fight any proposal at all, so there's no point in trying to play footsie with them. Anyone serious about real health care reform should be prepared for a generation-long war to the knife. My prediction is that this won't start until there is a system collapse obvious to everyone. Which will happen.

Posted by: Steve LaBonne on January 10, 2007 at 2:10 PM | PERMALINK
....One of the arguments in favor of limited universal healthcare proposals -- like the one Arnold Schwarzenegger unveiled on Tuesday for California -- is that it's the best we can realistically hope for. Sure, an honest-to-goodness single-payer system might be superior, but special interests will never allow it to happen.

The falsity of this is demonstrated by the fact that the California legislature already, in its prior session, passed such a proposal, and it was vetoed. The only piece missing is in the Governor's office.

This is the reason I swing back and forth on whether it's worth supporting half-hearted plans like Schwarzenegger's.

Schwarzenegger's plan isn't half-hearted, it is calculated destruction. Its a political ploy to cover cutting welfare benefits for the needy children (both by stealing headlines so most people don't notice the welfare cuts, and by creating a budget wedge as an excuse to justify the "necessity" of the cuts) while at the same time diverting the interest in a real effective universal healthcare system that led to one being passed by the Legislature in its prior term which he vetoed.

It's designed to capture the interest of shallow but influential "liberal" media voices of the same type that lined up to support Bush's war in Iraq while at the same time noting concerns about its justification or conduct with predictable disastrous results, the people that can also be counted on to lap up whatever right-wing gimmick is dreamed up to prevent a popular liberal policy idea from being adopted.

In the end, the reason I support Schwarzenegger's plan is because it includes insurance company regulation, and in particular because it enforces community rating (i.e., a requirement that insurers accept all comers at the same price, regardless of age, occupation, or medical history). And while I can't back this up with a solid argument, my gut tells me that community rating will eventually put private healthcare insurers out of business. Even with universal coverage, there are just too many contradictions in trying to run a profit-making insurance company while being forced to insure even people that you know for an absolute fact you're going to lose money on.

But you aren't, in this system, forced to insure people you know for an absolute fact you're going to lose money on. People are forced by law to buy your product at the price you set. You are limited in what you can use to base your prices on, but not on what prices you can set. People have no choice but to pay the prices you set, because they have to buy the product.

might be wrong about that. Insurance company managers are clever folks, after all, and might very well figure out how to game the system just well enough to stay around.

A mandate to purchase combined with a public subsidy is exactly what, reacting to public pressure for universal coverage, many insurance company executives have actively lobbied for. Its not a matter of insurance companies figuring out how to game it, its exactly the system that most serves the interest of insurance companies to start with.

The fantasy that such a regime would drive private insurance companies out of California is equally deluded to the fantasy that a Bush-led invasion of Iraq was going to produce a pro-US democratic revolution in the region after a short war followed by a peaceful occupation by a couple tens of thousands of US troops.

Posted by: cmdicely on January 10, 2007 at 2:11 PM | PERMALINK

Kevin - I am inclined to agree with you for reasons described in a comment to your first post on this subject. Assuming, hypothetically, you are correct that "community rating" drives carriers out of business, what becomes of the individuals as this breakdown reaches critical mass and comes to it's conclusion; but prior to the initiation of a single payer plan? That could be a nightmare time.

Posted by: bmaz on January 10, 2007 at 2:11 PM | PERMALINK

One advantage that any government plan has is the ability to lay down regulations that will decrease the administrative costs. When I started practicing medicine in the mid-70's all insurance companies had to use the Medicare form and were obliged to honor a number of rules that controlled that document. The result was a simple insurance form that took no time to prepare and gave all the information needed to make a decision on payment.

When the Reagan administration de-regulated the industry, administrative costs skyrocketed both as a means of profit for the insurers and a way to discourage the use of the insurance from both the patient and the treating side of the equation.

I have always contended that re-instituting the same pre-197? rules would help simplify things. As far as I can tell, that could be done fairly easily and (for the government) painlessly.

Posted by: Michael Keyes on January 10, 2007 at 2:13 PM | PERMALINK

The guarantee that anybody can buy into the insurance pool without being discriminated against is a major improvement for a lot of people. If the existence of private insurance companies costs us five percent, that is probably an acceptable compromise -- probably only three percent worse than the best administered universal plans. It is the current situation that has become intolerable.

A system in which private insurers are regulated, forced to accept their share of the high risk pool, and limited in terms of the amount of overhead they can charge (ie: profit) is close enough to nirvana. It doesn't deal with the issues of ever-increasing costs for end-of-life situations, but it will eventually be forced to make some compromises.

Posted by: Bob G on January 10, 2007 at 2:14 PM | PERMALINK

Yeah, Kevin, give up on the single-payer plan passed by the CA leg.

Posted by: Gore/Edwards 08 on January 10, 2007 at 2:23 PM | PERMALINK

If the insurance companies have to accept all comers at the same price, but consumers have a choice of insurance companies, then insurance companies will do their best to recruit the cheap people and discourage the expensive people, so that someone else is stuck with them. They will exploit any leeway that they can get away with, because of the overwhelming pressure to improve the bottom line.

Posted by: Joe Buck on January 10, 2007 at 2:23 PM | PERMALINK

Kevin assumes that community rating won't be sacrificed for compromise or centrism. Because cummunity rating (a statewide risk-pool, I presume) is so completely contrary to the underwriting instincts of the insurance companies, this is the one item the insurance companies won't agree to. They all believe that their underwriting is what makes them better than their insurance company competitors. And they will wail that they would be put out of business through bankruptcy if community rating is included.

So, if Arnold's plan makes it through, but without community rating, would Dems, liberals, conservatives and independents rally behind it?

I doubt that.

I'm unwilling to assume that community rating prevails in Arnold's plan, so I believe the best thing to do in CA is go for single payer and be able to talk about community rating and reduced administration and paperwork for all as major features.

Posted by: JimPortlandOR on January 10, 2007 at 2:25 PM | PERMALINK

When, after a few years in operation, this plan results in California having the highest, by far, insurance prices in the nation, and is dismantled for that reason, it will be the centerpiece in every right-wing argument against any universal healthcare plan.

And the same kind of liberals that today are loud critics of the war in Iraq that they had initially supported because they though Saddam was a bad guy and the Bush War wasn't a good approach, but was the best we could reasonably hope for, and might have some salutory side-effects of regional democratization will be trying, similarly, to walk back their support for this disaster of a plan, and might by then have even developed some concern for the poor that were cut out of welfare programs to pay for it.

Posted by: cmdicely on January 10, 2007 at 2:26 PM | PERMALINK

Kevin: my gut tells me that community rating will eventually put private healthcare insurers out of business. Even with universal coverage, there are just too many contradictions in trying to run a profit-making insurance company while being forced to insure even people that you know for an absolute fact you're going to lose money on.

I might be wrong about that. Insurance company managers are clever folks, after all, and might very well figure out how to game the system just well enough to stay around.

Actually, most insurance company managers aren't particularly clever. However, one doesn't need to be clever to game the system. One merely needs to violate the rules, while bribing or otherwise influencing regulators if necessary.

I'm afraid Kevin's proposal would lead to a variant of Gresham's Law: crooked insurance companies would drive out the honest ones out of the market.

Hawaii has

Posted by: ex-liberal on January 10, 2007 at 2:34 PM | PERMALINK

Sorry for the last 2 words in the above post. Please ignore them

Posted by: ex-liberal on January 10, 2007 at 2:35 PM | PERMALINK

I agree with Kevin that the demise of private health insurors is going to happen sooner or later. The California "plan" will be an experiment just like the MA plan. When (not if) a single-payer federal plan is put into effect, the successes and faults of the states' plans can be taken into account when it is crafted. I'm sure other states are watching CA and MA closely to see how it works.

Posted by: Doc at the Radar Station on January 10, 2007 at 2:37 PM | PERMALINK

Making health insurance mandatory for every man, woman and child, instead of providing them healthcare as a public good with costs equally shared by all, is a state welfare gift to the insurance companies.

Posted by: Brojo on January 10, 2007 at 2:41 PM | PERMALINK

The Ahnold plan has been reported as requiring people who earn more than $50,000 to buy insurance that could cost $10,000 per year for the ubiquitous "family of four."

That's right. One fifth of your GROSS income, before taxes, would be required to be given to insurance companies.

"Stakeholders" who are moderate income earners should oppose this with every fiber of their being.

The only "affordable" health insurance plans come with deductibles that are so huge that people who can't afford to go to the doctor now will STILL not be able to go to the doctor. In fact, some people who now CAN afford to go to the doctor and pay him/her out of pocket will NOT be able to afford to go under the Ahnold plan because they will have shelled-out one-fifth of their pre-tax income (so more like one-fourth or more of their post-tax income) for health insurance that doesn't cover routine trips to the M.D.

Emergency room care will still be the standard method of health care delivery, the insurance companies coffers will grow, and with their "profit" assured by law, they will have no incentives to reduce their overhead. Instead, their incentive will be to INCREASE their overhead and so their profit.

Mandating insurance is a bad, bad idea unless insurance companies are much more closely regulated in the interest of the consumer.

Posted by: Cal Gal on January 10, 2007 at 2:42 PM | PERMALINK

Karmakin: you asked whether the Schwarzenegger plan regulates profit and admin. costs. The initial rollout said that all insurance plans would be required to spend 85% of premiums on patient care. Likewise, all hospitals would be required to spend 85% of revenues on patient care.

How that plays out in practice is anyone's guess, but it was pretty clearly stated in the initial documents.

Posted by: MQ on January 10, 2007 at 2:42 PM | PERMALINK

Maybe I'm missing something important here, but this is how I see it:

You have to buy insurance to operate a motor vehicle on public roads. Fair enough. If you can't afford insurance, or simply don't want that to be a part of your life for some arbitrary reason, you don't drive (on public roadways, do whatever you want on your own farm).

In this case, they're talking about mandating that you purchase insurance just for being alive, or having a child who is. The only exception is if you can prove you can't afford it, in which case you can navigate a beaurocracy to get them to subsidize your legally mandated insurance.

So, if I decide that I'm not getting it, they gonna lock me up? We gonna do this by point of bayonette? Which city do you think oughta be the first to round up the vagrants and ask them for their papers?

Not only no, but fuck no. I can't believe you're getting behind this. If we're talking about legislation that keeps the insurance companies in the system, but makes sure that there's affordable insurance to everyone regardless of their means, then maybe. But legally mandating that someone get out and buy shit as a condition of their existence? C'mon man.

Posted by: chiggins on January 10, 2007 at 2:50 PM | PERMALINK

Wasn't the Clinton plan designed to bring the interest groups onboard?

It generated plenty of opposition.

Single payer. The whole enchilada. Fuck the medical-industrial complex (including the ambulance chasers).

The people who provide useful services will still have their jobs under a single-payer system.

Posted by: Carl Nyberg on January 10, 2007 at 2:54 PM | PERMALINK

but special interests will never allow it to happen

I was raised and educated in the USA. Perhaps the public schools should change their civics courses to educate children about how US society is actually a dictatorship of corporate special interests, instead teaching children lies about democracy and self-governance.

Many main stream media stories are being published this week about President Chavez, who was on a national ballot, nationalizing some industries in Venezuela and how he is becoming another communist dictator like Castro. There are no stories about how unelected special interests can dictate public policy about a needed public good like healthcare in the US.

Posted by: Brojo on January 10, 2007 at 2:54 PM | PERMALINK

You act like the fact that special interests will fight any reform anywhere is a great revelation. For someone who's been in the tank for the teachers unions as long as you have I think that's a little disengenuous.
I do think we've come to a singularity on this issue, though. You recently linked to Derbyshire's screed on NRO's The Corner, and yesterday Instapundit linked to Cathy Seipp (an NR contributor) with another horror story. If you've won over the National Review, how much harder can the fight be?

Posted by: ex-minion on January 10, 2007 at 3:11 PM | PERMALINK

What concerns me most is the "cover or pay a 4% payroll tax" mandate to employers. Any employer who currently pays more than that to insure their employees is going to feel some pressure to drop insurance altogether and just pay the tax. If very large numbers of California citizens suddenly find themselves forced into this plan, it could create some real chaos.

Posted by: fiat lux on January 10, 2007 at 3:17 PM | PERMALINK

Hi, Kevin,
"Sure, an honest-to-goodness single-payer system might be superior, but special interests will never allow it to happen."
Don't give up too soon. Times are a-changin'.

Posted by: Jörgen in Germany on January 10, 2007 at 3:24 PM | PERMALINK

Irony-alert: "minion" complaining about disingenuousness.

Posted by: Gregory on January 10, 2007 at 3:30 PM | PERMALINK

Sorry for the last 2 words in the above post. Please ignore them

How droll, "ex-liberal", given that, other as a source of well-deserved derision or easy-target sniping and phony neocon bullshit, all of your posts merit being ignored.

Posted by: Gregory on January 10, 2007 at 3:31 PM | PERMALINK

One thing is for sure the people who don't have insurance certainly would have it if they could afford it. They often times receive substandard or no medical care. Steve LaBonne said the system won't get fixed unless it breaks down entirely.That may or may not be true but as much as I don't trust Arnold at least he appears to be trying to do something and thats a step in the right direction.Oh by the way fuck you al.

Posted by: gandalf on January 10, 2007 at 3:32 PM | PERMALINK

Cohn's point is spot on. The primary reason the HRC Task Force plan ran 1,000 pages was that it was a byzantine compromise with the insurance industry to mollify them and get them on board. Then the HIAA stabbed the administration in the back with their Harry and Louise ads. That tells you something about the way the industry plays ball--wheel and deal to get a complex compromise, and then publicly decry the compromise's complexity to scuttle it. Fuckers.

Posted by: Andrew Wyatt on January 10, 2007 at 3:32 PM | PERMALINK

one doesn't need to be clever to game the system. One merely needs to violate the rules, while bribing or otherwise influencing regulators if necessary.

Irony alert: "ex-liberal" wrote those words, is still an acolyte of the neocon faith in business, and evidently sees no contradiction.

one doesn't need to be clever to game the system.

Hate to break it to you, "ex-liberal", but you just wrote Karl Rove's epitath.

Posted by: Gregory on January 10, 2007 at 3:35 PM | PERMALINK

Here's my argument for going for single payer: put your finger in the political air, and you can just tell by the direction and power of the winds that the American public is now ready for it.

I don't care about the resistance of the Insurance industry or of the health care industry. I just don't see their usual tired arguments as gaining any traction. I can't imagine that today the childish Insurance company advertisements of the Clinton era are going to get any serious hearing by the public. This is a public with a VERY cynical attitude toward what the "authorities" are telling them. They are ripe for a change, not least because of their own personal pain and frustration with the entire system of medical insurance.

Kennnedy's move to characterize single payer as "Medicare for everyone" is political brilliance.

As the Man said, Nothing is more powerful than an idea whose time has come.

Today is the day. Close your eyes, breathe in and out slowly, and you will feel it in your very nerves.

Posted by: frankly0 on January 10, 2007 at 3:42 PM | PERMALINK

Kevin: Just take a look at how the United States ended up with employer-based healthcare in the first place.

My understanding of this issue is that it started in the 1930s when Blue Cross convinced employers to take their premiums out of employees' pay checks because that was they only way they could think of to get participants to make their monthly payments, and it grew from there.

Neil Bates: why should those who invested in insurance companies just have to lose it all?

It's the risk a capitalist takes; your suggestion would be a jobs program for insurance companies. And it wouldn't be all insurance companies that would suffer, just health insurance. Their life, home, and auto insurance arms would still be in business.

Posted by: anandine on January 10, 2007 at 3:43 PM | PERMALINK

Kevin -- you put your finger on a key dilemma of insurance models: the tension between their purpose of insuring risk, and their knowledge of where that risk resides. The better the knowledge, the less useful insurance is.

Thus, if an insurance company knew exactly who would get sick and when, then they would sell insurance that cost more than the actual treatment (since they need to make money [yes, I know there's investement income involved, but ignore that for a moment, since the client could invest the same money]), and no one would buy it.

Thus, community rating actually is required to make actual 'insurance' possible: only when the insurer does NOT know exact risks, and therefore distributes them among a group, does buying insurance actually make sense.

The dilemma -- a version of the commons problem, perhaps -- is that any individual insurance company can become more profitable by deploying what it knows before selling any individual client insurance. Thus we have it that more and more individuals find it impossible to buy insurance: cherrypicking isn't a manifestation of evil by insurance companies under the current system, it's just elementary business rationality.

Only the state can intervene here -- and by requiring any company wishing to sell insurance to consider knowledge only about communities, not about individuals, the government actually makes 'insurance' possible. What will happen, though, is that the real cost of health care will become much more visible to buyers, since the healthy ones will suddenly pay community risk, rather than individual risk.

Now, a healthy individual, knowing that s/he is less likely to require treatment then the community average, could rationally self-insure. (In fact, we do this with many younger people who just don't buy insurance). It's true, however, that individuals gain a benefit even from insurance that costs more than their risk, since most individuals can't bear the high cost of rare treatment. But on the whole, we are drifting towards de facto self-insurance by the healthy, too, even with low rates based on good knowledge by the insurance companies.

Here, again, the state can intervene in a way that contradicts individual rationality but produces a better outcome for everyone: it can require every individual to buy insurance. While the cost of community-rated insurance will be 'economically irrational' for many individuals, the societal benefits to those individuals, as well as to the sick, are real and considerable -- as long as insurance rates are community-rated fairly (which the state must ensure), and as long as everyone has to buy, which ensures for the insurance companies that the communities are large and of at least average health.

Thus, in contradiction to Kevin's skepticism about whether insurance companies can survive under community rating, I would say that community rating actually allows insurance companies to compete, profit, and benefit society, AS LONG AS everyone is also required to carry insurance. The companies would compete on their investment prowess, on their service, and on their efficiency, rather than today's topsy-turvy situation where they compete primarily in their effectiveness in avoiding risky customers and not paying disputable claims.

Therefore, insurance companies should WELCOME the Schwarzenegger plan. After all, the current situation makes it rational for almost all individuals to HATE their insurance companies, and that's not a stable or desirable situation for the companies in the long run. It will lead to much worse situations, politically, than their current one.

Posted by: PQuincy on January 10, 2007 at 3:46 PM | PERMALINK

Kennnedy's move to characterize single payer as "Medicare for everyone" is political brilliance.

Lawrence O'Donnell told an anecdote on Majority Report once about his days as a Democratic Chief of Staff. As he and his fellow Hill staffers were watching the Clinton health care proposal fall apart on the House floor, he a colleague realized that the Clinton's plan's complexity was easy to solve. To paraphrase O'Donnell, "Take that sentence in Title 42 that discusses Medicare eligibility and scratch out '65 and older'. Congrats: There's your national health care plan."

Posted by: Andrew Wyatt on January 10, 2007 at 3:55 PM | PERMALINK

Here's one other way to make my point about the ripeness of the American public for single payer.

I think that the mood of the populace is very much one of distrust of established interests in general and of right wing forces in particular. I think they realize they have been lied to and manipulated many times in the past, and that the arguments of such people are, as likely as not, nothing but rationalizations.

On the other hand, the American public KNOWS that its pain and suffering over medical insurance is very real.

In short, they can see the argument in favor of major change very powerfully, but are in no mood to credit the timeworn arguments against such a move. It's exactly the right moment for them to to be convinced to take a revolutionary step.

Posted by: frankly0 on January 10, 2007 at 3:58 PM | PERMALINK

In this case, they're talking about mandating that you purchase insurance just for being alive, or having a child who is.

I think this is what bothers me too. It sounds like the state would be compelling residents to purchase a service because they are doing nothing but breathing. Not compelling them to pay taxes on their income, if any. Not compelling them to purchase services to mitigate risks or hazards posed by property they own in in the community. Not even compelling them to purchase a service to engage in a certain activity. It's compulsory spending for the right to live in California. It's creepy.

Posted by: Andrew Wyatt on January 10, 2007 at 4:03 PM | PERMALINK

Michael Keyes: When I started practicing medicine in the mid-70's all insurance companies had to use the Medicare form and were obliged to honor a number of rules that controlled that document.

Holy mackerel! I never heard that. Obviously this is the insurance form standardization that so many reformers have pushed for. Put another nail in St. Ronnie's coffin.

Posted by: alex on January 10, 2007 at 4:04 PM | PERMALINK

A single payer system is not superior. Countless patients don't recieve treatment because of waiting lists and rationing. If you want people dying of cancer because the government bureacracy couldn't treat them in time, go ahead and support single payer.

A better system would be a universal voucher system combined with a nationwide insurance pool. Every American would recieve a voucher with which they can choose their healthcare plan. Medicaid would be repealed, Medicare would be phased out, and subsidies for hospitals that would take care of uninsured patients would instead be replaced with funding for the voucher system.

All 300 million Americans would be part of an insurance pool, like the federal government's, but obviously bigger. If insurance companies want access to these customers, they have to give a better deal than what they are offering now. Federal employees have some of the best coverage in the country because of this concept.

The government should also use sticks and carrots involving the insurance pool to bring about reforms in the healthcare system, such as a switch to electronic technology, which can cut overall costs by 10%. They should do the same for hospital quality, demanding better standards that will translate into better care and saved lives.

A universal voucher system combined with a universal pool will cover everyone and drive healthcare costs down without condemning Americans to endure the dangerous, some times fatal inefficiency of single payer systems.

Posted by: brian on January 10, 2007 at 4:10 PM | PERMALINK

Chiggins says,

"Not only no, but fuck no. I can't believe you're getting behind this. If we're talking about legislation that keeps the insurance companies in the system, but makes sure that there's affordable insurance to everyone regardless of their means, then maybe. But legally mandating that someone get out and buy shit as a condition of their existence? C'mon man."

I see your point, but when you get sick or hurt in an accident, don't you dare show up at the emergency room, alright? Or if you do, make damn sure you've got your American Express card handy, cuz I sure as shit don't want to be picking up the tab for your sorry, injured ass.

Posted by: gab on January 10, 2007 at 4:11 PM | PERMALINK

A further point.

One of the classic arguments used against single payer is that it's like European countries, and, nudge, nudge, everybody can see how decadent and, well, unAmerican such countries are, you know.

I just can't see an argument like that getting any traction nowadays; before the Iraq war, most certainly, but NOT today. I don't see a lot of people holding the Europeans in basic contempt in today's environment.

And I think that arguments that appeal to American exceptionalism are going to sound very much like the arguments that got us into the Iraq war, and are going to treated with great distrust and skepticism.

Posted by: frankly0 on January 10, 2007 at 4:19 PM | PERMALINK

I see your point, but when you get sick or hurt in an accident, don't you dare show up at the emergency room, alright? Or if you do, make damn sure you've got your American Express card handy, cuz I sure as shit don't want to be picking up the tab for your sorry, injured ass.

This is a non sequitur, unless I missed your point. Chiggins' point, if I'm reading it correctly, is that the California plan would mandate that every state resident purchase a service. How is emergency room service even relevant?

Posted by: Andrew Wyatt on January 10, 2007 at 4:20 PM | PERMALINK
A single payer system is not superior. Countless patients don't recieve treatment because of waiting lists and rationing.

Same is true of our current system. The difference is who is negatively affected by the rationing; in single-payer systems the costs of rationing are distributed throughout socioeconomic strata, in a system of rationing-by-ability-to-pay, they are concentrated among those least able to pay.

Posted by: cmdicely on January 10, 2007 at 4:26 PM | PERMALINK

I listened to a call-in show last night (Dave Congleton on 920 AM - Central Coast California) - and he had a lot of callers chime in on this issue:

1. Many claimed to be paying cash for routine healthcare services, and only having catastrophic coverage - this coverage STILL amounted to $300-$400 per month.

2. Most people cited Medicare Part D as an example of why they don't trust the government to enact this policy in good faith (it is widely believed that since this plan does not omit health insurance companies from the equation, that it will amount to a giveaway due to the impact of their lobbyists) - the 2001 energy crisis resulting from the flawed deregulation was also cited as an example.

3. Many also cited the recent local phenomenon; many local doctors have dropped BCBS and other HMO's - even though they're listed by those HMO's. A lot of us who are working full-time professional jobs; I'm talking about engineers and office workers, can't get treated under our health plans, which we're paying premiums for; including marked increases orders of magnitude higher than inflation for the past 5 years in a row.

As I said before. I will support any plan that includes torture and prison time for existing HMO managers and executives.

People want change - but there does not seem to be a consensus on how to make that change yet.

Posted by: Extradite Rumsfeld on January 10, 2007 at 4:28 PM | PERMALINK

If you want people dying of cancer because the government bureacracy couldn't treat them in time, go ahead and support single payer.

And if you want people dying of cancer because the insurance company bureacracy couldn't treat them and keep up its profit margin, go ahead and support the current system.

"brian" forgets -- deliberately or otherwise -- that health care is currently rationed by beureaucrats (who, of course, add tons of waste to the system at no added value). I, for one, would prefer that it not be rationed by bureaucrats who see a profit motive in denying care.

Posted by: Gregory on January 10, 2007 at 4:34 PM | PERMALINK

Good Points. I do a blog on Health Care Crises with Cervantes we call Critical Condition. Since Feb of last year I have been writing about the role of Governors vs Feds See http://medicalcrises.blogspot.com/

Dr. Rick Lippin
"Blake"
Southampton Pa
ralippin@aol.com

Posted by: Dr.Rick Lippin on January 10, 2007 at 4:45 PM | PERMALINK

....One of the arguments in favor of limited universal healthcare proposals -- like the one Arnold Schwarzenegger unveiled on Tuesday for California -- is that it's the best we can realistically hope for. Sure, an honest-to-goodness single-payer system might be superior, but special interests will never allow it to happen. Better to mollify the special interests and take what we can get.

In fact that was your argument yesterday, Kevin. It was also Ezra Klein's although he hedged it a bit. After reading both, I left the blogosphere for the day disappointed and disgusted that two of the most level-headed progressives I read regularly were willing to just roll over and accept the first plan offered. Depressing. Then I remembered that you are both from California. I guess if Georgia* offered something, anything similar right now I might be willing to accept it, too.

If two Republican governors are promoting a form of universal health care coverage for their states, then the health care crisis is beyond its tipping point and is collapsing. Very soon only the beneficiaries of the Bush Administration's tax cuts will be able to afford insurance.

The insurance industry recognizes that the old model is dying and plans like Romney's, Wyden's and Schwatzenegger's give them a chance to stay in the game for a while longer. They'll support these plans as will many, many employers who are sick of the hassle of they face every year at renewal time and many of the currently uninsured who are desperate for something, anything that will get them past the front desk to a health care providers.

Posted by: Emma Zahn on January 10, 2007 at 5:16 PM | PERMALINK

If employers can pay 4% & escape further responsibility, why can't I, as a needy person, pay that same 4%?

Posted by: Dave of Maryland on January 10, 2007 at 5:58 PM | PERMALINK

Kennnedy's move to characterize single payer as "Medicare for everyone" may be political brilliance, but it's a less appealing concept today, now that the enormous cost of Medicare is becoming clearer. One goal of single payer health insurance is saving money. But, Medicare costs a fortune. It cannot be held up as a model of saving money.

In fact I wonder whether the AARP would support Medicare for everyone. They might recognize that the unaffordibility of such a plan would inevitably mean limiting coverage. From their POV, we can (just barely) afford Medicare for seniors. If we extend Medicare, seniors may ultimately have their coverage reduced

Posted by: ex-liberal on January 10, 2007 at 6:12 PM | PERMALINK

cmdicely writes: When, after a few years in operation, this plan results in California having the highest, by far, insurance prices in the nation, and is dismantled for that reason, it will be the centerpiece in every right-wing argument against any universal healthcare plan.

dicely: this is a risk of Arnie's plan, but I think it's a worth risk taking. Why? Because although California may end up having very high insurance costs, it should, in theory, give California universal (ie, 99%+) coverage. (I haven't read the plans details, so, it could be they're only shooting for 95% coverage like Romney's plan; but there's no reason a "play or pay" plan cannot be constructed to get us to virtually universal coverage).

Anyway, I've long thought that once the American people get a taste of guaranteed, genuinely universal coverage, it will become politically impossible to take it away from them -- just as it is in other countries. So, if Arnie's plan is successful, I doubt California will be able to retreat from universal coverage even if some politicians (and a whole lot of insurance industry executives) want to. Far more likely, I think, is that such a plan, in the fullness of time, morphs into something more closely resembling classic single payer, once Kevin Drum's predictions about community rating (that it will kill the private health insurance industry) start to come to pass.

In the interim, even if lots of firms abandon the practice of paying for employees' health insurance, this very likely will be a good thing for California's economic competitiveness.

Posted by: Jasper on January 10, 2007 at 6:34 PM | PERMALINK

I don't know the specifics of the governator's plan, but like Hillarycare, it appears to be based on the German model of healthcare - which rates as one of the best in the world, unlike Canada's single payer system, which delivers only average healthcare.

The devil is in the details here, and while I wouldn't doubt that unscrupulous insurers will try to rip off their customers, if this deal includes regulation of insurance companies, that may be difficult.

Private insurance companies will be forced to reduce their costs by negotiating lower drug prices with Big Pharma, in order to increase profits. With regulated standards in place it will be difficult to do so at the expense of the healthcare consumer.

This could work out.

Posted by: White Rabbit on January 10, 2007 at 6:39 PM | PERMALINK

In fact I wonder whether the AARP would support Medicare for everyone...From their POV, we can (just barely) afford Medicare for seniors. If we extend Medicare, seniors may ultimately have their coverage reduced.

Maybe. Perhaps the politically smart move would be for the AARP to oppose a general expansion of Medicare to cover everyone. I mean, it's not like the program is politically weak now as it is (far from it -- it's hear to stay), so, they really don't need extra "Medicare constituents" to keep it around.

Still, making it truly universal would only bolster the political popularity of Medicare, I suspect. I think one way to combine the Ted Kennedy "Medicare for all" approach (which I regard as a political impossibility in the short term) and the Arnie/Romney "play or pay" strategy is to allow non-retired folks to purchase Medicare coverage voluntarily. Perhaps the government could roll out a Medicare "Part U" plan ("u" for universal) and charge actuarially appropriate premiums.

Posted by: Jasper on January 10, 2007 at 6:42 PM | PERMALINK

I'm sure glad that ex-liberal is an ex liberal, so us liberals aren't associated with his thinking.

He speaks of the enormous cost of Medicare: medicare administrative costs run in the 3-4% range. Private insurers spend over 12$. And, under recent GOP revisions to Medicare, the US government is paying the private HMO insurers a 12% or so add-on above what they pay medical providers for direct service. So, Medicare does save money TODAY compared to private insurance for the exact same population. Lots of money.

As to AARP, their judgement is muddled: they make more money selling their health insurance than any other income source, by paying United Health Care to service their AARP customers. AARP also has its hands in the Medicare Part D pot, by offering their own drug plan serviced by Walgreens and others.

ex-liberal doesn't seem to understandn Medicare as it stands today. Part A of Medicare is financed by paycheck contributions throughout the working life, and covers the hospitalization aspects of health care. The current contribution level is in the area of 3-4% of annual wages, subject to a cap at $89,000 (like Social Security). It could be raised to some other percentage in small steps to cover shortfalls if they occur, or the earnings caps could be removed, but it is still a bargain for the contributors (the IRS rules make it clear that 7% of income is expected to be spent on health care - only the amount that exceeds 7% is deductible.)

As to Part B of Medicare that covers medical providers (MDs, etc.), the entire cost of Part B is covered by the recipients of coverage after they retire. The premiums are deducted from Social Security payments and currently run about $1,000 a year per person. Part B receives no federal subsidy, to my knowledge. The premiums do go up each year as overall health expenditures increase, but the Medicare increase is lower than the increase in private insurance premiums, substantially.

There is no reason that Medicare couldn't be extended to all citizens, but their might be advantages of partitioning pre-retiredment coverage from post-retirement doverage, for a number of reasons, which would tend to reduce the cost of pre-retirement coverage.

In any event, Medicare for retirees is fixable in a number of ways that are afforable to people and the government, and Medicare has controlled costs far better than private insurance.

Ex-liberal, its best to understand the facts when you make broad generalizatons like: It cannot be held up as a model of saving money. or Medicare costs a fortune.

You also seem to know the collective mind of AARP since you say From their [AARP] POV, we can (just barely) afford Medicare for seniors. Do you have a link to support that statement attribted to AARP? Or it it just made-up bullshit to confuse the issues by made-up facts like the GOP usually does?

Posted by: JimPortlandOR on January 10, 2007 at 6:59 PM | PERMALINK

The companies would compete on their investment prowess, on their service, and on their efficiency, rather than today's topsy-turvy situation where they compete primarily in their effectiveness in avoiding risky customers and not paying disputable claims....Therefore, insurance companies should WELCOME the Schwarzenegger plan.

I hope you're right. But I, like Kevin, am skeptical. Insurance companies will face overwhelming pressure to preserve profits under any community rating system that will constantly prompt their devious little minds to develop new ideas about how to avoid writing policies for high risk individuals. Or, if the state really does do a good job at preventing cherrypicking, there will be overwhelming pressure for sky-high increases in health insurance premiums -- to protect themselves from the inevitable, profit-crushing claims by insureds who have MS or HIV or cancer (all of whom can be refused coverage in many circumstances under the status quo).

I'm frankly hoping for A) a quick sprint to 100% coverage with the insurance companies on board; B) a "race to the top" as other states bow to the pressure from their voters to give them what California and Massachusetts residents and businesses possess; and, C) the eventual implosion of the current model whereby private insurance companies play a meaningful role in comprehensive coverage.

I think, for what it's worth, that it's both likely and desirable that private health insurers survive over the long term, but in very different (and limited) roles. I think they may (and should) survive as providers of catastrophic care coverage to (healthy) people who want to limit their monthly budgets and reduce premiums expenses. I also they may (and should) survive as providers of "extras" insurance to people who want luxuries not paid for by the government, such as private rooms, say, or queue-jumping privileges, or plastic surgery, or whatever.

Posted by: Jasper on January 10, 2007 at 7:01 PM | PERMALINK

ex-liberal doesn't seem to understandn Medicare as it stands today. Part A of Medicare is financed by paycheck contributions throughout the working life...The current contribution level is in the area of 3-4% of annual wages, subject to a cap at $89,000 (like Social Security).

JimPortlandOr: the Medicare payroll tax rate is 2.9% if memory serves me right, but it is NOT subject to a wage cap as in the case of Social Security.

Posted by: Jasper on January 10, 2007 at 7:14 PM | PERMALINK

Well, I've probably been around as long as Kevin, and I don't remember liberals passing up any 'half-a-loaf' proposals and living to regret it. In fact, in my experience, it's been pretty much just the opposite- for example, settle for getting rid of Nixon, instead of putting him and his henchmen in jail, and live to see the henchmen back in power escalating another war we should never have started.

In the healthcare case, accepting the Gubernator plan means giving up on the savings from reducing paperwork that you would get by going to a Medicare model from an insurance company model, but what you get in return is the mandate to buy an overpriced product. Pardon my lack of enthusiasm.

Basically the Gubernator plan is intended to make sure providers get paid by making sure the poor people pay for insurance. Well, good luck with that one. You can't get blood from a stone. Of course, the providers will get paid, which means eventually tax revenues will be proppng up the inefficient private sector. Who, quite predictably, will use part of their loot to lobby against any changes. Wouldn't you?

The correct answer is fairly simple- we need the savings and universal coverage we'd get with the extension of Medicare to the entire population. Anything short of that isn't going to work very well, and may not work at all.

Posted by: serial catowner on January 10, 2007 at 8:25 PM | PERMALINK

Has anyone here actually read the *details* of this plan? [To the extent they exist, online at http://gov.ca.gov/pdf/press/Governors_HC_Proposal.pdf] "Universal coverage" means a plan with a $5,000 deductible, of the type "that can be purchased today for $100 or less per month for an individual". The requirement for insurers is "to guarantee coverage, with limits on how much they can charge based on age or health status", which doesn't sound quite like community rating.

Anyone here remember the California Performance Review that Governor Narcissus commissioned when he was first elected? A graphic designer's idea of what a management consultant's report should look like, grandiose promises that collapsed when checked against reality. This health insurance proposal is more of the same. It's not serious public policy. It's more like an empty box with fancy gift-wrapping. The numbers just don't compute -- the cost estimates look like they were written with crayons -- and unfortunately it will divert energy and attention away from solving real problems.

Posted by: Gwailo on January 10, 2007 at 8:34 PM | PERMALINK

Brian at 4:10 reiterates the favourite talking points of how Canadian healthcare is mediocre.
Would someone kindly tell this poor misguided beneficiary of this system how terrible it must be when someone can take the system to court to ensure timely care ? This is proof ?
Ezra has been fighting this for months - on his own blog at least - and done research up the ying-yang. I shouldn't wonder he's feeling discouraged. This is no easy short term battle but well worth finding a way through to the far side.

Posted by: opit on January 10, 2007 at 10:48 PM | PERMALINK

Wouldn't the fact that there are now incremental plans in MA and CA indicate that Cohn is wrong about them being hard to enact.

Regardless of whether or not they're better than full-on, single-payer healthcare, the fact that a couple of such plans have, you know, been passed, demonstrates that they're not harder to pass than a more comprehensive plan.

Posted by: TW Andrews on January 10, 2007 at 10:52 PM | PERMALINK

"Anyway, I've long thought that once the American people get a taste of guaranteed, genuinely universal coverage, it will become politically impossible to take it away from them -- just as it is in other countries.
In the interim, even if lots of firms abandon the practice of paying for employees' health insurance, this very likely will be a good thing for California's economic competitiveness."

Posted by: Jasper on January 10, 2007 at 6:34 PM

This could result in a significantly *increased* demand for labor and increased interest in potential employees to migrate *to* California. What if state-sponsored health care reforms pull IN employment and investment? Then this would accelerate the reform process.

Posted by: Doc at the Radar Station on January 11, 2007 at 12:34 AM | PERMALINK

"Universal coverage" means a plan with a $5,000 deductible, of the type "that can be purchased today for $100 or less per month for an individual".

If large numbers of people who carry no health insurance at all ended up buying such policies as a result of Arnie's reforms, why, again, is that a bad thing? Surely this is an improvement over the status quo, even if it's hardly ideal. A major illness or serious accident could easily set you back a few hundred grand in this country. An insurance policy that "only" pays for $250,000 worth of treatment -- and leaves the patient with, say, $20,000 worth of medical bills -- is better than nothing at all. It's certainly better than not seeking medical attention (until it's too late) because of a lack of health insurance. One can imagine further regulations that might be proposed to enhance the utility of such insurance products. Perhaps a cut rate annual checkup ought to be a mandatory benefit of such plans. Perhaps limits on the total out of pocket expense per incident should be adopted ($10k? $15k?). They could be improved, in other words -- by government fiat if necessary. And let's face it: Not having any medical insurance at all is all the more inexcusable if -- per the figures you cite -- a policy can be had for a little as $100 per month.

I can think of lots of people for whom such insurance policies don't make sense (children, for starters, or parents with dependent kids), but we as a society would be better off if the young, relatively healthy childless person who currently eschews buying health insurance were required to start doing so -- even if it means perhaps forgoing a new IPhone or, say, getting roommates instead of living alone.

Posted by: Jasper on January 11, 2007 at 1:43 AM | PERMALINK

Jasper-

The Schwartzenegger plan basically proposes mandatory purchase of *catastrophic* coverage, which helps hospitals now burdened with uncollectible billings and charity care expenses. Folks still have to come up with the *first* $5,000 of expenses out-of-pocket -- so delay in seeking treatment and recourse to emergency rooms would remain a problem.

It would be nice if this were a real reform package -- at least it would be a start -- but a look at the details [such as they are] suggests that this is just another PR ploy to buff up the image of Governor Narcissus.

Posted by: Gwailo on January 11, 2007 at 3:19 AM | PERMALINK

If it were up to me I'd leave the insurance industry alone. Yes, that's right: I'd give every individual the right to opt into Medicare (though I think choosing some coverage needs to be mandated). That, basically, lets those employers/employees or individuals who think they get a better deal from insurers buy insurance. It establishes a certain amount of accountability for insurers: if they focus too much on profits, their customers have a realistic alternative besides uninsurance. It also establishes some accountability for hospitals and other providers: If they can't make nice by competing to give good prices to private insurers they can look forward to providing more and more services where prices are established by the government. Those employers that can't economically make insurance work (small restaurants, for instance) won't need to feel like SCrooge for not taking care of their employees, and, for those individuals whose coverage will have to be subsidized by the government, they won't also be subsidizing the profits of middlemen. It puts in place a single payer concept without blowing out of the water people who are satisfied with the current arrangement. There are problems with this approach, like adverse selection, but it is worth noting that many people who are currently uninsured (and who presumably would opt into Medicare) are basically healthy, so I'm not convinced adverse selection would be an unmanageable problem.

Posted by: Barbara on January 11, 2007 at 9:44 AM | PERMALINK

A Modest Proposal:

1. Institute single-payer, community-rated universal health car through the government. Let's call it Medicare for All.

2. Let any and all private insurers offer identical coverage and ONLY identical coverage with no government subsidies.

3. Clearly, the insurance industry will welcome this plan because the increased efficiency of private enterprise will triumph and EVERYONE will buy private insurance.

4. Any politician who opposes this plan is obviously an enemy of private enterprise. ;-)

Posted by: xtalguy on January 11, 2007 at 10:24 AM | PERMALINK
Has anyone here actually read the *details* of this plan? [To the extent they exist, online at http://gov.ca.gov/pdf/press/Governors_HC_Proposal.pdf] "Universal coverage" means a plan with a $5,000 deductible, of the type "that can be purchased today for $100 or less per month for an individual".

This is worse than I thought: this is the exact opposite of what needs to be universalized. It does nothing to improve access to routine and preventive care which controls costs and improves productivity and quality of life by preventing illness and/or identifying it early when it can be most effectively arrested with minimum impact on quality and length of life.

And for those with limited ability to pay, having a $5,000 deductible will still wipe people out financially when they have a serious injury.

If the Democrats in the Legislature don't resurrect the real plan they passed last year and beat Schwarzenegger about the head and shoulders with it, they should be ashamed of their own timidity.

And if they let him get away with throwing people off welfare to fund this travesty, then why do we even have a Democratic Party in this state?

Posted by: cmdicely on January 11, 2007 at 10:47 AM | PERMALINK
Wouldn't the fact that there are now incremental plans in MA and CA indicate that Cohn is wrong about them being hard to enact.

Regardless of whether or not they're better than full-on, single-payer healthcare, the fact that a couple of such plans have, you know, been passed, demonstrates that they're not harder to pass than a more comprehensive plan.

Only the Massachussetts one has been "passed". The California one has been proposed by the governor. Insurers have praised the proposal; business and labor groups have both panned it. The Assembly Republican leader (because of what it imposes on employers) and Democratic Speaker (saying that the mandate will make insurance less affordable in the long run) have made negative comments. Not only has it not passed, I don't think it, or anything closely paralleling it, has much chance of passing.

Posted by: cmdicely on January 11, 2007 at 10:53 AM | PERMALINK

I should add that any "opt in" Medicare proposal will need to establish a more universal (read: child friendly) plan of benefits that includes vaccines (which Medicare generally excludes) and preventive services, such as prenatal care.

Posted by: Barbara on January 11, 2007 at 11:34 AM | PERMALINK

How does this qualify as universal health care? How is this anything other than expanded health care for the poor?

The majority of Californians get their health insurance through their employer or union. After this plan goes into effect the majority of Californians will still get their health insurance through their employer or union. After this plan is dismantled, should it be, the majority of Californians will still get health insurance through their employer or union. The majority of Californians will never participate in this plan, except possibly through taxes and decreased quality of care. How does a plan that the majority do not participate in qualify as universal in any sense?

In this case the phrase "limited universal" is worse than an oxymoron. It's a lie. You can't get from non-universal to universal in incremental steps.

Posted by: Allen on January 11, 2007 at 1:57 PM | PERMALINK

Folks still have to come up with the *first* $5,000 of expenses out-of-pocket -- so delay in seeking treatment and recourse to emergency rooms would remain a problem.

Again, I think catastrophic plans aren't ideal for everybody (although for some people they do make sense). But I still think having such a policy is an improvement over not being covered at all -- even for someone of very modest means. At least when you do have to go to the hospital you have a piece of plastic that says "I'm insured" and reduces the incentive of the administrator to shift you to another facility. And even for a lot of poor folks, a $5,000 medical debt shouldn't be an impossibility to pay off via an installment agreement. Moreover, the $5,000 bill won't materialize for a lot of people. Certainly a routine checkup or simple bloodwork or Xrays shouldn't result in that type of bill.

Posted by: Jasper on January 11, 2007 at 4:45 PM | PERMALINK

It would be nice if this were a real reform package -- at least it would be a start -- but a look at the details [such as they are] suggests that this is just another PR ploy to buff up the image of Governor Narcissus.

It sounds to me like it is a real reform. Currently a young, healthy, insurable, employed person whose employer doesn't provide insurance can coast on the taxpayer's dime by showing up at the emergency room and demanding to be treated. Under Arnie's plan, this will no longer be possible. Under current law a dry cleaner with four shops and 15 employees can undercut his more responsible competitor by not offering health benefits. Under Arnie's plan, this will no longer be possible.

Sure, the health insurance situation in California ain't going to be confused with that of Denmark. But it is an improvement. It is a real reform. Universal coverage, even if for some people that coverage initially only means major medical and skimps on preventative care, is still an improvement. There's no law, after all, against heading to your local Wal-Mart and paying cash for a checkup.

Posted by: Jasper on January 11, 2007 at 5:00 PM | PERMALINK
Currently a young, healthy, insurable, employed person whose employer doesn't provide insurance can coast on the taxpayer's dime by showing up at the emergency room and demanding to be treated.

Uh, wrong.

Currently, a young, insurable, employed person whose employer doesn't provide insurance will be liable for payment if they do that; even if they manage to avoid payment, the only treatment they will eligible for is that that it is legally mandatory to provide: i.e., what is required to stabilize them. After that, they are out the door unless they can demonstrate means to pay for services.

Under Arnie's plan, this will no longer be possible.

Sure it will; people still can't be turned away from lack of ability to pay, insurance with a $5,000 deductible won't provide anything to cover most ER visits, so the same means of avoiding any liability (fraud) available to an employed person now will be available to the same kind of person then (they may have to pretend to be from out of state, though.)

Under current law a dry cleaner with four shops and 15 employees can undercut his more responsible competitor by not offering health benefits. Under Arnie's plan, this will no longer be possible.

Sure it will, it'll just undercut the competition a little bit less, and pay into a state subsidy plan that their employees may or may not be eligible for.

Posted by: cmdicely on January 11, 2007 at 6:22 PM | PERMALINK
At least when you do have to go to the hospital you have a piece of plastic that says "I'm insured" and reduces the incentive of the administrator to shift you to another facility.

That piece of plastic only reduces the incentive of the administrator to get rid of you to the extent it represents a genuine ability to pay for the services you are getting.

To the extent that the $5,000 deductible plan doesn't do that, it doesn't reduce that incentive at all.

Posted by: cmdicely on January 11, 2007 at 6:23 PM | PERMALINK

Currently, a young, insurable, employed person whose employer doesn't provide insurance will be liable for payment if they do that...

I made no claim to the contrary. But the fact that such a person is "liable" for payment certainly doesn't mean the taxpayer is off the hook. There's that tricky business of collecting, for starters. Why wouldn't you, as a taxpayer and/or purchaser of health insurance, prefer a net reduction in free riders? I know I do.

...the only treatment they will eligible for is that that it is legally mandatory to provide: i.e., what is required to stabilize them.

"Stabilization" can cost thousands of dollars in the USA. The hospital is certainly better off treating an insured person than a non-insured person. Moreover, under Arnold's plan, this situation (evicting a patient after he/she is stabilized) should be less common, because in theory everybody should have insurance, and therefore the means to pay for treatments that go beyond stabilization. And again, there's no reason lawmakers couldn't propose modifications to the governor's plan as the price of passage. One sensible provision might well be language dealing with the problem you touch upon ("thou shalt not discharge an insured patient who requires treatment because of lack of ability to cover a deductible"). The point is, the governor's plan is a start, not an endpoint.

...insurance with a $5,000 deductible won't provide anything to cover most ER visits, so the same means of avoiding any liability (fraud) available to an employed person now will be available to the same kind of person then (they may have to pretend to be from out of state, though.)

Sorry, not sure what your point is here. Obviously in the United States the law doesn't allow hospitals to refuse care to those who show up at emergency rooms with an emergency. Arnold's plan doesn't change this, as it's federal law. An increase in insurance coverage should result in more care being administered, and fewer incidences of care providers ushering out the door someone who is not yet healthy. Anyway, I'm not arguing that Arnold's plan is a silver bullet to take care of medical fraud. I'm arguing that it's a step (perhaps a small one) in the right direction (toward robust universal health care guaranteed by the government).

Sure it will, it'll just undercut the competition a little bit less, and pay into a state subsidy plan that their employees may or may not be eligible for.

No, the dry cleaner -- and any employer with at least ten employees -- will no longer be able to compete by not offering health benefits. He'll be required by law to do so, although in some cases he'll "provide" benefits via the extra tax due to the state. It may well be the case that this type of pay or play provision will actually reduce employer-provided health insurance by creating this easy opt out. But as I've stated before, I regard this as a very desirable feature of such plans, because I deem tying health insurance to employment to be a very bad idea, and I welcome any dynamic that subverts this particular paradigm.

To the extent that the $5,000 deductible plan doesn't do that, it doesn't reduce that incentive at all.

Of course an insurance policy reduces the incentive of a health care administrator "to get rid of you" (albeit it may not eliminate this incentive entirely). Just look at the status quo: who is more likely be gotten rid of: an uninsured individual or one with a $500,000 health insurance policy and a $5,000 deductible? Any savvy hospital will look at someone carrying a $500,000 catastrophic health insurance policy as a person who is in an extremely sound position to pay his tab (a lot sounder than someone who can't demonstrate any means at all of paying). The mere fact that the first $5k is supposed to come out of the beneficiary's pocket hardly comes into play unless the procedure is so minor as to generate a bill smaller than $5,000. Heck, for our larger hospital systems and care providers, $5,000 here and there is barely a rounding error, and may not even be worth collecting if the total tab is much more than $20 or $30k. And in any event, for a middle class person, a $5,000 bill shouldn't be a crisis. An inconvenience? Sure. A genuine pain in the butt for a middle class person struggling with credit card debt and generally shaky finances? Absolutely. As I've said, I regard such policies as less than ideal. But we're dealing in the realm of what is politically possible, and single payer just isn't right now. Making health insurance universal -- even when some of these newly insured are covered by policies with high-deductibles -- is a net improvement over the status quo.

I'm frankly a tad surprised at the general lack of excitement among liberals about recent developments concerning the health care crisis. Sure, the first few miles on the road to a sane health insurance system may be unimpressive. But there's been a veritable sea change in attitudes concerning health insurance in the last couple of years. Don't y'all sense it? To my eyes, it's frankly obvious that we're on the verge of large scale, historic changes in the way Americans get their healthcare. I mean, multiple states are now on the verge of mandating universal coverage.

Revolution is in the air, and I just think we should give the revolutionaries a bit of credit, and maybe even cheer them on.

Posted by: Jasper on January 13, 2007 at 6:37 AM | PERMALINK




 

 

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