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Back in the mid-1980s I visited an elderly cousin of mine. She would have been in her mid to late 70s at the time and she had a number of health problems. Nothing major but her vision was very poor and she was generally weak. They - whoever “they” were at the time - were talking about reducing Social Security, possibly across the board, possibly through means testing. My cousin had a pension from her husband and money in the bank - she and her husband had worked hard to make sure she had both - but her Social Security money was something she had counted on when planning for retirement. When we discussed the possibility of her Social Security being reduced she was almost in tears. “They can’t take that money away from me,” she said. “I have no way to make more.”
I went home and wrote a letter to Bill Bradley, one of my Senators at the time, saying that I realized Social Security was unsustainable but that I thought it would be criminal to suddenly cut Social Security for people already over 65 or for those close to 65. Instead, I said, we should start telling younger people that their Social Security would be means-tested. Perhaps, I suggested, we could say that for everyone over 55, Social Security would not be means-tested. For everyone under 55 Social Security would be means-tested when they were old enough to qualify but the reductions would be phased in. For example, let’s say you were between 50 and 55 when the new rules went into effect. When you started receiving Social Security, means-testing would be done to see if your Social Security should be reduced. However, if the means-testing said your Social Security should be cut by $100, it would only actually be cut by $25. For someone 45-50 when the new rules went into effect, the cut would be $50; 40-45, the cut would be $75; and for those under 40 the cut would be in full effect. Knowing head of time that Social Security would be means-tested would give those younger people a chance to save more of their own money for their retirement while not unfairly taking money away from those who were counting on Social Security and no longer had the time or the ability to earn and save more.
Needless to say, nothing like this happened (I got a very nice form letter from one of Senator Bradley’s aides) and here we are twenty years later. Unfortunately the great bulge of baby boomers who would have been subject to means-testing if we’d done this twenty years ago are now so old that we can’t give them advance warning of means-testing. That means we can’t cut their Social Security without great unfairness. How would suddenly beginning to means-test Social Security be unfair to the well-off elderly who would lose money as a result of it? Well, here’s how Megan McArdle puts it when talking about a different entitlement, higher education in California (emphasis mine):
... shutting down prior entitlements suddenly is a very bad thing, even if you're the kind of heartless conservative who hates entitlements ...
People plan their lives around public programs. Allowing an unsustainable program to run until it comes to a screeching halt is often worse than having no program. The UC system is very good, and I am in no way suggesting that we would be better off if it didn't exist. But many, many California students, and their parents, planned their lives around a reasonable expectation of what in-state tuition would be. The protests are childish, but the rage underneath them is understandable: if you suddenly have to leave school because legislators have broken your implied social contract, you're probably going to be pretty mad.
And that, of course, is the problem with a change to Social Security that involves cutting benefits for those already receiving them or for those on the verge of being eligible for them. It’s all very well and good to say that well-off old people shouldn’t be getting money from less well-off younger people but those well-off old people made plans based on those Social Security payments. When they decided what job to take, how much money to save for retirement, what to buy and what to forego so they could have the kind of retirement they wanted, the money from Social Security was always in their calculations. To see how this works, let’s take a look at two hypothetical couples.
Ann and Bob have worked hard their whole lives. They married right out of college and bought a three-bedroom ranch house in a nice enough subdivision; both sets of parents helped them out with the down payment. They lived close to the bone - no dinners out, modest Christmas presents, no getting away on vacation - until they paid back those loans. Once they were making a little more money they had a couple of children but they still watched their pennies. Vacations were driving trips, often to visit relatives; they shopped at discount stores for clothes and food; Christmas and birthday presents were still modest and always included a little extra cash tucked away in their kids’ college accounts. And they always, always put away as much as they could for their retirement. They figured they’d have the house paid off and the kids through college by the time they retired and they calculated that with the $2000 per month - $1000 for each - that they’d get from Social Security plus the $2000 per month they planned to have from their own retirement investments, they’d have enough money to do all the traveling and wining and dining they weren’t doing now.
Carol and Dave have also worked hard their whole lives. They, too, married right out of college and bought a three-bedroom ranch in a nice enough subdivision with the help of their parents. They, too, scrimped and saved to pay back their parents. After that, though, they saw no need to continue to be frugal. They never ran up a lot of debt but except for saving for their kids’ college they spent every penny of their income on trips and clothes and restaurants and just plain stuff. As soon as they got halfway decent equity in their ranch house they traded up to a McMansion. There was no way they could save for retirement after that but they figured that the $2000 - $1000 for each of them - that they would get from Social Security would be plenty: they’d be so old when they retired that they wouldn’t want to do much of anything anyhow.
Now both couples are retiring. Ann and Bob will get $24,000 a year from Social Security plus $24,000 a year from their own retirement investments; their house is long since paid off. Carol and Dave will get $24,000 a year from Social Security but they have no retirement savings and not only is their house not paid off, the lousy real estate market means the value of the house is just barely enough to cover the outstanding mortgage.
The government decides to means-test Social Security. What’s going to happen? Why, Ann and Bob are going to lose their Social Security because they’re financially secure without it. Carol and Dave are going to keep theirs because that’s all they’ve got. And that’s not fair.
So are there ways to keep Social Security solvent without unfairly penalizing those who counted on their Social Security benefit when they planned for retirement? Yes and I’m going to discuss three of them: the three-month solution; the 10% solution; and the Lifetime Endowment. As always, I’ve created a new category to group together the posts in this discussion.
A friend gave me one of those page-a-day calendars for Christmas last year, this one called “Forgotten English”. For some reason the September 18 entry on “redargue” amused me. The word itself means “to refute” but what I liked was the quote from James Boswell about Samuel Johnson . (Johnson celebrated his birthday on September 18 hence the reference to him in the calendar.)
About Johnson, Boswell writes:
The truth, however, is, that he loved to display his ingenuity in argument; and therefore would sometimes in conversation maintain opinions which he was sensible were wrong, but in supporting which, his reasoning and wit would be most conspicuous. He would begin thus: "Why, Sir, as to the good or evil of card-playing—"; "Now, (said Garrick,) he is thinking which side he shall take." He appeared to have a pleasure in contradiction, especially when any opinion whatever was delivered with an air of confidence; so that there was hardly any topick, if not one of the great truths of Religion and Morality, that he might not have been incited to argue, either for or against.
I must admit to being in sympathy with Johnson’s view. There is nothing that makes me feel more contrary than an opinion “delivered with an air of confidence”.
[Updated November 25, 2009, at about 4:30pm to add extra Reading.]
Deafening Silence is doing her usual excellent work on ClimateGate, providing a brief narrative, some key points, info on major players, what each side says about the data dump, and links to other sites where more information - including the emails and data themselves - can be found.
I’ve been wandering around reading about this for the last few days and I think the most telling exchange occurred at RealClimate, the Website run by some of the “working climate scientists” who are in the forefront of the research and advocacy that supports the idea of Apocalyptic Anthropogenic Global Warming. Here you will find AAGW luminaries like Gavin Schmidt and Michael Mann and here you will also find Schmidt’s response to ClimateGate. Called “The CRU hack”, this post is a RealClimate masterpiece and well worth reading. As is usually the case at RealClimate, the comments are worth your time also - - although I freely admit I have not made it through all 1,092 comments on the post much less the 502 comments on Schmidt’s follow-up post.
If I may digress briefly, I have often thought there must be a word for writing that is an example of what it is discussing. An easy on the beauty of the English language that uses English beautifully. A piece bemoaning poor grammar that is itself filled with grammatical errors. A paean to courage that required great courage to write. A childish refutation of accusations that the writer is childish. A rant about rants. Onomatopoeia writ large, so to speak. Schmidt’s original post, written in response to charges that science comes far down on the priority list of the AAGW establishment; that said establishment is knowingly making dubious claims; and that said establishment slurs and marginalizes those who disagree with it, would deserve pride of place in any list of such writings.
Back to the post. Schmidt writes:
Clearly no-one would have gone to this trouble if the academic object of study was the mating habits of European butterflies.
Commenter lgarvin replies in part:
That depends on whether or not people were trying to re-order the global economy on the basis of those butterfly studies.
And that, of course, is the crux of the matter. I am willing to accept that most scientific disciplines seethe with personalities, politics, pettiness, and personal attacks. (Hey, I went to grad school.) I am certainly aware that older software often suffers from ugly code, indecipherable routines, an excessive need for manual intervention, and - shall we way - hinky data sets. But most scientific disciplines are not insisting that we need to immediately radically alter the entire basis of our way of life or face cataclysm.
If you’re prophesying the end of the world then - unless you're speaking directly with God - you should be sure both your data and your programs are clean; you should be not merely willing but eager to provide your data and your programs to the whole world for verification; and you should be delighted that people with expertise in related fields like statistics are interested enough in what you’re doing to dissect it. Most important, you should make clear to those who lives you want to at best upend and at worst pretty much destroy that you are, in fact, sure, eager, and delighted. Making it clear that you uncertain, recalcitrant, and scornful is not a good way for you to convince me that you know what you’re talking about, much less that my world is safe in your hands.
*****
Reading:
Deafening Silence points out that the Climate Audit site is difficult to get into due to increased volume. This problem now seems to be resolved but posting is occurring at a Climate Audit mirror site here.
Watts Up With That is posting on Climategate. The oldest post is here.
A stand-alone Website has a searchable data base of the CRU emails, organized somewhat differently from the one Deafening Silence links to.
The emails sound bad but much of what is in them can be explained or spun or is understandable to anyone who has ever written an exasperated email. Not all, but much. I think the state of the computer software code and databases is much more interesting:
L'Ombre de l'Olivier looks at some of the code. He has a link to his copy of HARRY_READ_ME.txt. This is apparently a log kept by the poor programmer who inherited the software at the East Anglia CRU when the original developers left. The programmer (Harry) documents the problems he encounters while trying to figure out what’s going on. You don’t need to read code to follow what’s going on - Harry’s comments tell the story.
HARRY_READ_ME is both agonizing and hysterical. (Be sure to visit Item 17 for a look at squared numbers going negative.) I haven’t read through the whole thing yet but so far my favorite line is in Item 27:
Oh GOD if I
could start this project again and actually argue the case for
junking the inherited program suite!!
Amen, brother. Amen.
*****
Updated November 25, 2009, at about 4:30pm:
This post from the CBS News blog is a must-read. It provides more background thus complementing what Deafening Silence has up. The post concludes with:
The irony of this situation is that most of us expect science to be conducted in the open, without unpublished secret data, hidden agendas, and computer programs of dubious reliability. East Anglia's Climatic Research Unit might have avoided this snafu by publicly disclosing as much as possible at every step of the way.
I found this via Megan McArdle although I’d seen references to it elsewhere. Please do also read McArdle’s post in which she draws an interesting conclusion about the value of any cost-benefit analysis based on the East Anglia CRU software and points out that if - as appears to be the case - the East Anglia CRU itself “cannot now replicate its own past findings” then:
Obviously, this also casts their reluctance to conform with FOI requests in a slightly different light.
That’s the current Best Buy slogan. It’s cute with that whole play on “Buyer beware” thing going on. The problem is it sounds an awful lot like, “Buy or be happy”. Which, given the problem of consumer debt, is probably closer to the truth.
After I finished my Grand Finale post on five health insurance issues I began to worry I had not distinguished clearly enough between health care and health insurance and the role of the free market in each of these. Grim’s comments to that post confirmed my concerns on that score. So let’s return once more to the grocery store and see if I can make myself clearer.
I do most of my grocery shopping at Kings Supermarket, the one on Route 23. It’s bigger than the one in Upper Montclair so there’s a larger variety and it’s less claustrophobic. At the same time it’s smaller than the ShopRite and PathMark stores near me and usually less crowded so it’s a more pleasant place to shop. I think Kings’ prices are in line with those of the larger stores perhaps a few cents cheaper but it’s been worth it to me to have a nicer shopping experience. Now Kings is revamping its product line, however, and attempting to bring prices down. I still do most of my shopping there but I’m beginning to feel like they have too many products on the shelves with too-short expiration dates and I’m not always totally happy with their meats. I just found a butcher shop in Upper Montclair so I may try buying meat there next time. I think they’re a little more expensive but I’ll have to do some comparison shopping to be sure - and then decide if the extra money is buying me better quality.
I don’t do all my shopping at Kings. I like the 365 Day brand olive oil from Whole Foods so I’ll run in there every so often and stock up on that. When I’m in there I also like to pick up a bag of their 365 Day Salt and Pepper Potato Chips - yum! I used to buy more groceries from Whole Foods but once Kings realized how popular some of their stuff was they started carrying it. So now I can buy my soy sour cream from Kings. And, of course, almost every store now carries soy milk. That’s still cheaper at Whole Foods than anywhere else but it’s not enough cheaper to make a separate trip worth the gas and time. I made a wonderful Five Cheese Penne for my husband’s birthday last year and Whole Foods had the best selection of the cheeses I needed for that.
If I need a lot of canned goods - tomatoes, beans - or a lot of non-food items - aluminum foil, laundry detergent - I’ll run to ShopRite. I really don’t like their meat at all but I think they have slightly better prices on non-perishables so it’s worth it to me to make a trip there if I’m going to stock up. They also have a much better selection of Duncan Hines cake mixes than Kings so I’ll pick up a bunch of those while I’m there. ShopRite’s produce is usually quite good so if I’m in there anyhow I’ll buy what I need in the way of lettuce, apples, and so on. And if I want a wide selection of frozen foods - pizza, yum - ShopRite is much better than Kings. It used to not be worth it to run in there just to pick up a California Kitchens Margherita but now that they’ve installed self-checkout - and gotten the bugs out - it’s a breeze especially if I’m already in the area.
I used to hit the FoodTown further up Route 23 because I love Spice Islands spices and it was the only place around here that carried them. They don’t anymore so I never go there. I’ve pretty much adjusted to life with other spice brands - most of the Morton & Bassett brand spice are really good, their bay leaves are great, and the name of the spice is on top of the lid which is very handy is you’re looking down at rows of spices trying to find the one you want. Still I’ve never found a garlic powder that comes anywhere near Spice Islands; luckily I can order that over the Internet.
There is a PathMark near us but I really don’t like shopping there. Their shelves always seem to be understocked and they’re often out of the one thing on my list that I just have to have. However there’s a very nice little Italian deli close by that has wonderful bread and is often a stop to pick up rolls and turkey for lunch.
I love Trader Joe’s but there isn’t really one all that close - and the closest one is near a super-busy mall. I have vegan friends who shop there a lot and also hit a lot of Indian and Asian markets for more exotic ingredients. We do have a farmers’ market in town where I can find wonderful corn and those fabulous Jersey tomatoes during the summer. They also have a brief but incredibly delicious few weeks of peaches.
I buy flour tortillas at Kings but for corn tortillas I like the little corner store up the street. They sell them in packs of 25 or more and they’re always super fresh. There’s also a small liquor store very close to us but their selection is limited so for wine I go to the Wine Merchant. It’s handily in the same shopping center with the ShopRite so sometimes I run in there, too.
I’m sure that by this time you’re fascinated by my grocery shopping adventures - or at least ravenous. But you may be asking what this all has to do with health care and health insurance.
Health care is - or should be - like groceries: a great variety that can satisfy all needs at the best possible price. Health insurance companies are like grocery stores: they don’t produce health care but they are to all intents and purposes where we purchase it. Unfortunately health insurance companies function nothing like grocery stores. We can’t flit from company to company looking for the best deal on a treatment we want or need; we can’t comparison shop; we can’t decide we’ll pay a little more for this treatment because we want this particular doctor.
When I buy health insurance as it is currently structured, it’s as if I can now shop at one and only one grocery store. I get only the products that store chooses to carry. If I need something it doesn’t have, I’m out of luck - no Five Cheese Penne for a birthday dinner. If the store decides to start cutting corners on products, I’m out of luck - dinner may have to be whatever is going to expire tomorrow. If Spice Islands decides to stop doing business with the store I’m committed to, I’m out of luck - I spend my life eating inferior garlic bread.
If I get my health insurance through my employer, the situation is even worse. Now it’s as if I’m forced to buy all my groceries from a store I didn’t even get to pick myself - if my employer picks PathMark, too bad for me.
A free market in health care - like a free market in groceries - is a Very Good Thing. Consumers (patients) must decide whether a treatment is worth them spending their own money on. If they decide it is then they will pay careful attention to exactly what they are getting and exactly how much they are paying for it. They will comparison shop; they will seek out innovative products that provide better quality or lower costs or both. On the other side, many producers (health care providers) will compete to make their product better and lower priced. Others will strive to make their product outstanding so they can charge more for it. Some will find innovative ways to deliver services. Both consumers and producers benefit.
A free market in health insurance may or may not be a good thing but to me that’s irrelevant. Health insurance as currently structured deforms the free market in health care. It doesn’t matter if we’re talking about private health insurance or public; traditional or HMO; catastrophic or first dollar. All our existing forms of health insurance are incompatible with a truly free market in health care.
In contrast, I believe the catastrophic health insurance plans of DeLong and Goldhill - if correctly structured - offer the possibility of providing the advantages of a free market in health care while avoiding the great danger of such a market: that in catastrophic situations, people will be unable to purchase the health care they need. That’s why I’ve already spent so much time analyzing their plans and why I’ll be spending even more time doing so.
*****
Reading:
Health 'Reform' Gets a Failing Grade: Read the whole thing but this is what jumped out at me:
Our health-care system suffers from problems of cost, access and quality, and needs major reform.
[snip]
The system we have now promotes fragmented care and makes it more difficult than it should be to assess outcomes and patient satisfaction. The true costs of health care are disguised, competition based on price and quality are almost impossible, and patients lose their ability to be the ultimate judges of value.
The headline says it all (via TigerHawk): This post quotes Milton Friedman’s observations on the four ways to spend money. I contend that health insurance functions like a combination of the second and third ways. The insurance companies think like this:
Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I'm not so careful about the content of the present, but I'm very careful about the cost.
The policyholders think like this:
Then, I can spend somebody else's money on myself. And if I spend somebody else's money on myself, then I'm sure going to have a good lunch!
I like Sarah Palin in that visceral sort of way that one likes or dislikes public figures. I think she would have made a perfectly adequate Vice-President and I don’t think electing her as such would have been a disaster under any circumstances. Best case scenario? John McCain would have served out his term and Palin would have buckled down, taken the opportunity to learn what she didn’t know, and emerged as a clearly qualified Presidential candidate in four (or, less likely, eight) years. Worst case scenario? McCain would have died before his term was over and Palin would have proven to be a bad President. The country would have survived - the goddess knows we’ve survived lots of bad Presidents in our history.
Middling scenarios? McCain would have served out his term and Palin would haven’t learned anything more than how to attend lots of state funerals and weddings. Or McCain would not have served out his term and Palin - with help from everyone in government who would have rallied around in time of crisis - would have proved her mettle and done a decent job as President.
At the same time, I understand there are lots of people who don’t like Sarah Palin in that visceral sort of way one likes or dislikes public figures. I also understand that there are people who thinks she’s not smart enough, too naive, too far right, not experienced enough, not intellectually curious enough to ever be seriously considered as Vice-Presidential material, much less Presidential material. That’s their prerogative and they may be at least partially right. I have some very similar thoughts about Barack Obama.
What I don’t understand is why so many people hate Sarah Palin. I mean really, really hate her. They can’t just ignore her and they can’t mention her without saying something ugly. They think every form of misogynistic insult is perfectly justified as long as it’s directed at Palin. They’re happy - really, really happy - to attack her children. They sound exactly like some bitter drunk who can’t stop talking about his or her ex, who left for a younger, more attractive lover and got the kids, the cars, the house, and the bank accounts. It is quite possibly the most bizarre phenomenon I’ve ever witnessed in politics.
As it happens, three of the bloggers I read regularly are writing about this very phenomenon - from three very different points of view. Reclusive Leftist writes about Fear of women:
... our nation is also in the grip of some kind of atavistic looming fear of women as evil monsters. Sarah Palin is no weirder than most Republican politicians; [snip] Yet based on the media coverage of the woman, you’d think she was the greatest threat to western civilization since the Battle of Tours.
All of her writing about the attack-Palin phenomenon is must reading and this post is no exception.
Megan McArdle presents the best brief summary I’ve seen of the Newsweek problem and coins the term Palinoia (perfect word, perfect concept):
It's when you think people are out to get you, and then they do their best to justify your erroneous belief.
She concludes:
There seems to be an unhealthy obsession with tearing her down. And really, guys, if you'll just back off a little, she'll do the job for you. Have you seen that resignation speech? How about we all act like she's a former governor and vice presidential candidate, rather than Public Enemy #1?
This, of course, is one of the most bizarre aspects of Palin Derangement Syndrome. People were also deranged when it came to George W. Bush but at least he was, like, you know, the President so he couldn't just be ignored. Palin holds no office, has no political position. If she’s as bad as her detractors think, she’s going to disappear without a trace when her fifteen minutes of fame are up. Why the compulsion to keep bashing her?
Meanwhile, Eric at Grim’s Hall quotes and links to InstaPunk, a blogger I don’t read. InstaPunk’s piece, Hating Sarah Palin, contains some language that I, as a feminist, can’t countenance but he asks the right question (emphasis his):
But here's what I don't get. Hating Sarah Palin. That's my whole point here. Think about it. Who do you have to be to hate Sarah Palin?
I can’t pick just one part of his answer to quote - you have to read the whole thing.
I’ve said it before and I’ll say it again. I really hope I’m alive 20 or 30 years from now when sociologists and political scientists look back at the Presidential campaign of 2008 and its aftermath and explain what the heck was going on with all the people who hated - truly hated - Sarah Palin.
[Updated, November 21, 2009: Grand, perhaps, but not the finale. I have up one more in the sequence here.]
In response to my post on catastrophic health insurance, Grim commented:
I like the idea of market-based reforms. However, I'm not sure why a government plan would be better at simulating the market than, you know, the market.
For example, the DeLong plan that I surrender 20% of my income for health care expenses? The market as it currently exists offers much better deals than that.
In general my preference is for a free market with only as much government regulation as is necessary to keep the more predatory impulses of capitalism in check. However, I have a lot of reservations about whether a totally free-market approach is appropriate for health insurance. I prefer regulation that says, “Thou shalt not” rather than regulation that says “Thou shalt”. Once you wander into government telling private companies what they should do, you’re in trouble and that’s increasingly the case with government regulation of insurance companies. They’re being told what they must do - who to cover, what conditions to cover, how much treatment to provide. That’s a bad situation; bad for the companies, bad for the government, bad for the company’s customers.
Yet I understand why we’ve gone down that road. We want certain things from health insurance and we are trying to get them via government intervention while still maintaining - or appearing to maintain - the companies as private entities. I’m not at all sure that’s working well. We may simply be unable to get what we want from health insurance within the framework of our current system.
This is a big part of why I was so intrigued by the catastrophic insurance plans I discuss in my earlier post. These plans may be the best way to address five issues I think any health care or health insurance plan must handle, the issues we’re trying to handle through our increasingly intrusive regulation of the insurance industry. In sorting out why I think these plans are promising, I’ve written at considerable length about those five issues. As usual, I’ve created a new category - “Five Health Insurance Issues” - to link the posts.
To review my five issues before I sum up:
Issue 1 : While most of us could pay for normal health care expenses ourselves, most of us need health insurance to cover serious situations.
Issue 2: Health insurance is not universally available or universally affordable through the market as it currently exists. Lack of health insurance does in fact often mean less effective medical care when someone is seriously ill. This is not right.
Issue 3: A health care system run entirely by the government is a bad idea.
Issue 4: As currently structured, all insurance - private or government, cheap or expensive, HMO or traditional, catastrophic or first-dollar - masks the true costs of treatment from those who purchase that treatment. This is bad for patients and bad for health care providers and bad for any hope of reining in health care spending through individual decision making.
Issue 5: Either we have to toughen up and let people - including children - die when they - or their parents - are too dumb to buy health insurance they could get and could afford or we have to find a way to force them to chip in for the health care we’re willing to give them if they get sick.
My conclusion - and I assure you it’s a reluctant one - is that a totally free market in health care and health insurance cannot address these issues. A free market will not make insurance affordable or obtainable for everyone; it will continue to mask the true costs of treatment; and it will do nothing to address the problem of free riders - which in a totally free-market system means we’d have to let them and their children die. If someone can describe to me a free-market plan that doesn’t have those effects, I’m all ears. Bonus points is you can describe a system that will guarantee that someone like me, who has cost her insurance company vast sums of money and more pre-existing conditions than you can shake a stick at, will be able to retain my health insurance in a free-market system at a cost I can reasonably expect to afford. Extra bonus points if you can figure out how I could change health insurance companies if I wanted to.
As my third point above makes clear, a single-payer system is not the way to go either. Yes, it will make health insurance/care universally available and it will take care of the free-rider problem. It may make it universally affordable but only if you ignore the taxes necessary to pay for it. However, it most definitely does not unmask the true cost of treatment. This means there is no hope of getting health care spending to come down via individual decision-making; we will be left with no options except to squeeze providers, refuse to cover treatments, and decide what is and isn’t covered based on some political hell’s brew of money and lobbying. If someone can describe to me a single-payer plan that doesn’t have those effects, I’m all ears. Bonus points if you can make me love the fact that birth control is not part of the Basic package on the exchange. Extra bonus points if you are pro-choice and can embrace the Stupak amendment.
What we have now is a hybrid. The free market for health insurance copes well with people who are healthy and employed. The free market copes well with people who are unemployed, healthy, and reasonably well off financially. The free market copes poorly with people who are unemployed and either not healthy or not financially well-off; to some extent the government picks up the slack. If you’re poor enough, there’s Medicaid; if you’re old enough, there’s Medicare; if you’re sick enough, emergency rooms have to treat you. Some people fall through the cracks. The more people who lose their jobs the more people there are who may fall through the cracks. (Surely the idea that health insurance should be tied to jobs is the handiwork of some imp of Satan.)
We can continue with this system, using regulation, government subsidies, and government programs to patch those cracks. If this is what we want to do, then I still think the best solution is to let anyone who wants to buy into the Federal Employees Health Benefits Plan (under a separate risk pool) with government subsidies for those who need them. We’d get rid of Medicaid but keep Medicare. We’d forget the health reform bills currently floating around Congress. We’d keep people from falling through the cracks but we wouldn’t even be attempting to rein in health care via individual decision-making; we’d just be postponing the day when the costs would eventually have to be faced up to.
Alternatively we can follow the route of the Democratic health reform bills. Frankly, I think they’re worse than single-payer. Under those bills we keep Medicare; we expand Medicaid; we set up the Exchange; we get a public option; we force so many conditions on private insurance companies that they’re basically public utilities. We get twice the bureaucracy and twice the overhead. We get less individual choice rather than more. We don’t get any incentive for people to make decisions about how much health care is worth to them. Instead of incentives for providers to innovate we get government pilot projects, government bundling initiatives, government this, that and the other. They won’t work; just look at Medicare. We get a monster.
If we truly want to do something major to overhaul the system then I prefer the Goldhill and DeLong models. They help those who need help but do not put the government totally in charge and do not mask the cost of treatment. Their plans are mandatory which means everyone is forced to buy catastrophic insurance and to set aside money in a Health Savings Account - no free riders here and everyone can (must) participate. Yes, the government runs the catastrophic insurance part of the plan. But the HSA part of the plan is for individuals to do with as they please which means they are fully exposed to health care costs up to the point of their deductible or trigger. Because any unspent money goes back to the individual each of us can decide what health care is important enough for us to spend money on - and each of us has to be willing to spend his or her own money before we can start spending other people’s.
I’m fully aware of the coercive nature of the requirements to buy government-run catastrophic care and to put money in Health Savings Accounts. I know these are an absolute bar to this plan for Libertarians and most Conservatives. I am sympathetic to that point of view. However, I have neither the courage nor the hard-heartedness to live in a world where health care and health insurance are strictly free market. I don’t want to fall through the cracks and I’d rather my fellow citizens didn’t either - especially the young ones. It seems to me that the best combination of free-market and government involvement comes from the Goldhill/DeLong approach. Yes, it takes my money but if structured correctly it gives me back control over my health care decisions while providing a safety net if disaster strikes.
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