This is exactly the spirit of Obamacare. The animating drive is to transfer: mainly money, from those who pay to those who need. The strongest appeal of Democrats' plans is that you needn't worry about coverage because someone, presumably a villain, will pay for it.
Mr. McIlheran thinks doctors and insurance companies have the lobbying power to remain protected. However:
You, however, may have an ATM-like role. The plan assembled by Sen. Max Baucus (D-Mont.) dictates premiums on a sliding scale - 12% of income, about $8,700 a year, for the median Waukesha County family, for instance. We'll all be paying extra to cover people who earn less. Those figures assume, by the way, massive, improbable cuts in costs.
Who else pays? The healthy: Patsies who obey the law and buy insurance before they're sick. Their premiums will cover those who don't bother until they've incurred huge bills.
Mainly, the young will pay. They tend to use less care. Obamacare depends on this: Young workers' premiums are needed to fill the pool as aging workers drain it. That's how insurance works, they say. They mistake insurance, which pools similar risks, with the pooling of known dissimilar costs, which is called a raw deal.
The real winners in Obamacare aren't the elderly. They're already covered, though Baucus' plan cuts Medicare massively. It is, rather, the pre-retirement demographic, not old enough for Medicare, insured but worried, and costly to cover.
Such people usually are in their peak earning years. They've had time to save up, pay off the mortgage. They are typically far better off than the young who will subsidize them. Yet Congress would transfer huge sums from low-wealth twentysomethings to higher-wealth boomers.
Interesting. Health reform supporter Mickey Kaus fits that profile, but what about Ezra Klein?
Tyler Cowen is given space in the Times to outline some problems with the current reform proposals that mandate the purchase of health insurance:
AMERICANS seem to like the idea of broadening health insurance coverage, but they may not want to be forced to buy it. With health care costs high and rising, such government mandates would make many people worse off.
The paradox is this: Reform advocates start with anecdotes about the underprivileged who are uninsured, then turn around and propose something that would hurt at least some members of that group.
To ease the burdens of the insurance mandate, the reform proposals call for varying levels of subsidy. In some versions, such as the current Senate bill, subsidies are handed out to families with incomes as high as $88,000 a year. How long will it be before just about everyone wants further assistance, and this new form of entitlement spending spins out of control? It’s possible to lower insurance subsidies, but then the insurance mandate would impose a bigger burden on the people we are trying to help.
Mr. Cowen is skeptical of the "fleece the young" strategy:
Defenders of a broad health insurance mandate argue that it will lower average costs in the health care market. The claim is that many of the uninsured are young, healthy or both, and that bringing them into the insurance pool might lower average premiums by spreading risk across low-cost groups. Yet Massachusetts has had a health insurance mandate for several years and this cost-saving mechanism does not appear to be kicking in.
Mr. Cowen also makes a valuable point about coverage creep, but muddies the waters a bit:
A further problem is “mandate creep,” which we’ve seen at the state level, as groups lobby for various types of coverage — whether for acupuncture, alcoholism and fertility treatments, for example, or for chiropractor services or marriage counseling.
There are now about 1,500 insurance mandates among the various states, and hundreds of others are under consideration. The dynamic at work here is that the affected groups have a big incentive to push for mandates, while most other people are unaware of the specific issues and don’t become involved.
Because mandates don’t stay modest for long, health insurance would become all the more expensive. The Obama administration’s cost estimates haven’t considered these longer-run “political economy” issues.
I agree with the broad point but my quibble is this: Mr. Cowen blurs the distinction between services (alcoholism treatment) and service providers, such as chiropractors.
Although obviously Obama attended it, I missed the economic class which explained how expanding demand by bringing 40 million new insured people into the system could reduce prices. Unless we have an expansion on the supply side with more doctors and service providers, prices seem set to go up.
However, for many people a chiropractor can be as valuable as doctor in treating back pain, a very common ailment. Including chiropractors in health care mandates could reduce costs by expanding the pool of eligible, competent health care providers.
That would be in contrast with mandating coverage of specific services, such as fertility treatments or alcoholism, where one might argue that the expense includes a large voluntary, self-selected component (Not that people chose to be infertile, but they probably know better than their insurer whether they are).
Let me recycle my own attempt to square the mandate circle.
First, remember how we got here - people have coverage through their employer due to tax code wrinkles and WWII wage and price controls; now, when they change or lose their job they risk losing their coverage, which is a huge problem where pre-existing conditions come into play.
The Dem solution is to force insurers to Just Say Yes to all applicants regardless of pre-existing conditions.
The obvious concern is that if pre-existing conditions are covered, shrewd people won't buy any insurance until they get a ghastly blood test or have a nagging pain; obviously, this strategy backfires in the case of the sudden broken bone due to a mishap.
The Dem solution to that is to oblige everyone to buy insurance, like it or not.
My Tough Love approach would be to rank insurance policies and legislate that anyone with, for example, a Class One coverage cannot be denied Class One coverage by another insurer at prevailing rates. In other words, people only have to pass through the door once; after that first insurance company covers them, they can buy coverage for life. People who take their chances and don't buy insurance when they are young face the risk of getting the Tough Love message (which will be as tough as that faced by the current uninsured, namely, emergency room and clinic care.)
Now, my approach is similar to open enrollments at companies that offer multiple health care plans with a free switching option once a year. It is also somewhat like COBRA, but with a much longer horizon.
However, my approach won't be much help for someone who has lost their job and simply cannot afford to pay health insurance premiums themselves. Obama originally campaigned on a promise of public assistance without a mandate; that could overlap well with my "Once Covered, Always Covered" suggestion.