The McCain Health Care Plan
National Review editor Rich Lowry offered his prescription for what ails the GOP and says various sensible things before turning his sites on the McCain health care plan. Unlike a lot of aspects of McCain’s campaign, Lowry likes this initiative — subjecting employer-provided benefits to taxes, then offsetting the giant tax hike with a tax credit that, over time, would come to be worth less-and-less relative to the cost of health care — praising it as “innovative, representing years of work by conservative policy wonks to develop an alternative both to the current employer-based system and to government-heavy liberal plans.”
Lowry thinks this plan was unfairly subjected to attacks (from this quarter among others) as a tax increase because “tax would have been more than offset in the vast majority of cases by the new credit.” Lowry thinks the plan wasn’t adequately defended because “McCain didn’t seem to have a firm grasp on his own plan, and the Obama campaign successfully distorted it as a huge new tax increase.” I actually think Lowry doesn’t have a firm grasp on the plan. The size of the credit would be scaled to the CPI, but health care costs grow faster than inflation, so over time there would be a tax increase. Indeed, as I’ll explain shortly, this was the point of the plan.
Interestingly, after he’s done with his discussion of health care, Lowry says that “At times, conservatives seemed bizarrely at odds with public sentiment.” In fact, I’d say the health care issue was one of those times.
Most Americans would define “the health care problem” as consisting of inadequate health insurance or fear of imminent inadequacy. Many Americans don’t have health insurance. Others have health insurance but it’s very minimal. Others have good coverage on paper, but are frustrated to discover in practice that their insurer will struggle mightily to get out of paying for things that the patient/customer feels should be covered. And yet others are simply worried that if this or that happens, or if they do this or that, they’ll find themselves in one of the previous categories. The animating impulse of the McCain plan was that this whole definition of the problem was wrong. Instead, the conservative view is that the government, by offering a large tax subsidy to employer-sponsored insurance, is creating a situation in which people have too much insurance. If there were less health insurance overall, the feeling goes, total health care expenditures would be lower and people would have more other stuff. What’s more, the right feels that this situation would create incentives for people to be more discriminating customers, so that the reductions would come disproportionately from the “waste” column of the medical expenditures table.
I think this view of the matter isn’t entirely wrong. But the crude outline of the McCain plan suffered from a lot of defects. Most notably, I would say, an indifference to distributional issues and to the value of preventive care. This paper from Jason Furman (or see Ezra Klein’s shorter and somewhat clearer account of the paper) who, in virtue of McCain losing, will now be in a position to do something about it, contains some very smart thinking about how to apply the truth of this insight in a non-disastrous way. But instead of addressing the main substantive defects of his plan, what Team McCain did was try to address what they saw as the main political vulnerability of the plan — the charge that it was a tax increase. They did this through the tax credit.
In practice, however, all that did was phase the increase in more slowly — ultimately, if your plan is to remove a tax subsidy for something, you’ve got to remove the subsidy. Indeed, I would say that McCain’s real problem in this regard was simply that his tax plan was so hugely regressive that absent the credit most middle- and working-class families would have seen a net tax increase. If he’d had a less regressive tax policy (as, indeed, he had in 2001-2003) he maybe could have squared the circle in an easier way. But that still would have left him with an extremely crude health care proposal that would have been pretty sharply at odds with what most voters are looking for in a health plan.
56 Responses to “The McCain Health Care Plan”
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November 10th, 2008 at 11:33 am
before turning his sites on the McCain health care plan.
I don’t know that the Think Progress Yglesias has offered up a Profound Mistake, but this seems–insofar as Yglesias might, at a stretch, mean NRO–like a candidate.
November 10th, 2008 at 11:35 am
I guess I’m not putting forth anything new here, but it sure seems like everything conservatives put forward it in service of some position they see as an ideal, but they ignore the reality of what it does to the average person’s life. I guess I’ve heard some writers state that ideology trumps all with the right wing, I guess this is an illustration of it in action. The weird thing is, they can never be honest about their real goals, they just have to nibble around the edges and come up with a fictional reason why they do it, or their policies would be rejected by ALL Americans, not just 60-70%. Sorry for the navel-gazing, I guess it all comes back to whether they’re dishonest or stupid. Can I vote for both?
November 10th, 2008 at 11:50 am
Indeed, I would say that McCain’s real problem in this regard was simply that his tax plan was so hugely regressive that absent the credit most middle- and working-class families would have seen a net tax increase.
Over time, yes, although in the short run I’m not sure this is true (Clive Crook wrote a recent piece suggesting otherwise). I think the biggest problem with the McCain plan is that it would have prompted many employers to stop picking up a portion of their workers’ premiums. If you lose, say, $7,000 worth of coverage, you definitely are worse off even with a $5,000 credit (to the tune of two grand) unless your boss converts that lost premium subsidy into extra salary. In other words, not everybody would initially suffer a tax increase, but many people likely would suffer a decrease in after tax income (inclusive of benefits).
November 10th, 2008 at 11:53 am
Different problems begat different solutions. And so it is with health care. If one defines the problem as spending too much, then the solution is to discourage health care spending. And so it is with many conservatives. If one defines the problem as too many uninsured, then the solution is some form of universal care. And so it is with many liberals. If one defines the problem as discriminatory practices of health insurers, then the solution is some form of community rating. And so it is with many policy wonks. But health care suffers from all of these problems, and then some. Why not take some measure from each “problem” and “solution”? I suppose that compromise is the dirty word in this debate, and don’t expect it. Personally, I see the main problem in the context of chronic illness, which frequently results in loss of health insurance (and often a job tied to it), then loss of savings, then loss of dignity.
November 10th, 2008 at 11:58 am
But health care suffers from all of these problems, and then some. Why not take some measure from each “problem” and “solution”?
If Obama’s plan passes, we will have done so.
November 10th, 2008 at 12:03 pm
Republicans biggest problem is that they assume health economics is rational. It isn’t. People feel entitled to the best drugs, doctors, and technology regardless of cost. Ask someone, when they are healthy, whether they would choose more consumption or additional expensive and ineffective insurance coverage and most would say more consumption. But if they do become sick this coverage somehow becomes a fundamental human right.
November 10th, 2008 at 12:03 pm
Sights, not sites. The “sights” are gunsights, you turn your sights on something to prepare to open fire on it.
November 10th, 2008 at 12:24 pm
I guess the fundamental argument is what you expect government to do to save your life. For example, my daughter is sick, and there is a building I can take her to where there are doctors and machines that will let her live. The expense for this is 250,000 dollars, and I don’t have even a fraction of it. My insurance will pay for 50,000 dollars of it. At a base level I want the doctors and machines to be required to save her life, expense be damned. If my insurance won’t pay, the government should. Even if I have to make payments the rest of my life, my daughter’s death will wreck my life, my wife’s life, and potentially several others. I guess this is collectivism at some level, but that’s too bad. The alternative, just letting someone die from lack of treatment, is unacceptable to me. I guess this is the point they arrived at in Sweden, UK, and pretty much every other western democracy, that it is unacceptable. We have a long way to go.
November 10th, 2008 at 12:25 pm
I’d like to defend, not the McCain plan, which I haven’t read, but some of the ideas animating it. I think it’s intended to fix two problems (again, whether it does a good job at this I don’t know).
First is something I think we can all agree on: having health insurance tied to keeping your current job is really crappy. It increases stress, increases variance of personal welfare (you lose health insurance at the same time your income drops), and seriously impairs labor market mobility; all of these are bad things. Unfortunately, a number of factors including the tax-advantaged status of employer benefits, tilts the system towards this insane setup; I think the idea is to change things so that it’s equally cheap for me to buy insurance for myself or for my company to buy insurance for me.
Of course, we could also do this by giving a similar tax deduction to people buying their own insurance plans (I think various people have suggested this at times). But this gets into the other concern, which is that there’s no reason (on first-order effects, at least) that the government should care whether I get health insurance or a new computer.
Matt argues that people want more insurance; that’s of course true, but people (or at least the ones I know) tend to want more of everything. If you offered me a tax break on buying insurance, I’d take it. If you offered me a tax break on buying a car, I’d take it. If you offered me a tax break on a new computer, I’d take it. In fact, we could take this to its logical conclusion and offer people a tax break across the board, on all the things they want. I can say that I’d firmly support that plan; I think I can even come up with a catchy name for it.
But as things stand, we have a tax policy that encourages to buy more insurance and less other-stuff than they might otherwise do. I can come up with a couple decent arguments for why we want to encourage them to do this, but they’re a bit more complicated than “we should make stuff people want cheaper.” If the real argument is that people want health care more than all that other stuff, they’ll buy it on their own; we don’t need to encourage them.
November 10th, 2008 at 12:25 pm
If Obama’s plan passes, we will have done so.
Yeah, and it will cost less, and everybody will be healthier and get a free pony.
November 10th, 2008 at 12:29 pm
Something has to be done about the issue of the uninsured. It’s simply not acceptable that we have such large numbers of people with no insurance, or that people are afraid of job changes because they’re tied to “good” insurance coverage. This article in yesterday’s WaPo Magazine sums it up nicely.
November 10th, 2008 at 12:37 pm
The tax increase would have been short-lived. That’s really not the issue. The whole purpose of the plan was to make employer-provided health insurance economically untenable, in very short order, and drive everyone out into the private market for health insurance. To hasten the rapid exodus, they added a restricted tax credit – which is really just another Republican voucher plan, administered through the income tax. A stick to get you out of your employer plan, and a carrot to get into the private market for health insurance. Within no time, employer plans would shrink in size and become untenable, and employers would stop providing them.
At that point, you’re on your own – except you’ve got a voucher in your pocket that is probably paid for by cutting other government programs you depend on. Every problem that attends a system of purely individual responsibility for one’s own health care is then with us. It’s the “ownership society” all over again. In this case you totally own (almost) your own health problems and the costs of fixing them.
Republicans just hate the idea of sharing health care costs in any way that redistributes any costs from the sick to the healthy, whether the sharing is mandated by the government directly, or accomplished through the legal structure that sustains the system of employer-based health plans. The fundamental conservative problem with our health insurance system – and this is just classic Phil Gramm Social Darwinism – is that the strong and fit are subsidizing the health of the weak and sick. Republicans think that that kind of redistribution of costs is wrong, and that the weak and sick should pay what it costs to take care of themselves, without help from the strong and healthy.
November 10th, 2008 at 12:41 pm
toyboat,
Government assistance with health care is collectivism, no two ways about it. That doesn’t make it wrong, or evil, or un-American.
Government is _about_ collectivism: even enlightened government by popular consent is about the realization that people have to come together and institute governments to do things they can’t do well enough for themselves. Even Minarchists think we should have prisons and a army, because no decent civilization would just let me handcuff somebody to a pipe in my basement for one to three years if I caught him trying to steal my car.
Fire Departments are nothing more or less than a Socialist enterprise, at least by the moronic terms of current Conservative thought. I’d like to see Rich Lowry walk into a fire station and call them a bunch of Pinkos…
November 10th, 2008 at 12:42 pm
“Ask someone, when they are healthy, whether they would choose more consumption or additional expensive and ineffective insurance coverage and most would say more consumption. But if they do become sick this coverage somehow becomes a fundamental human right.”
Similarly ask someone whether they would choose something of value or a worthless drag and most would say something of value. And then this insight leads somehow to the conclusion that a belief in the propriety of universal health care coverage is “irrational”.
November 10th, 2008 at 12:48 pm
Matt – If you want a clearer idea of what was wrong with the McCain plan, then go back a bit further to when Rudy was still running.
The Rudy plan was basically given to McCain – But Rudy was better at explaining the (bad) plan than McCain was, so he also (unintemtionally) exposed more of the bad thinking behind the plan than McCain did.
Rudy candidly admitted that his plan (same as McCain’s) would leave some people in in a far more painful situation. His point was that lack of insurance should not be seen as an accidental byproduct – Rather, lack of insurance would be a sign of a shiftless consumer being punished by the free market.
Rudy is more comfortable in his sadism that McCain so it was no hard for him to articulate these positions. But McCain’s plan was the same
November 10th, 2008 at 12:52 pm
duBois – I disagree. McCain’s plan is more like your Bishop’s mitre being used to poke and probe, while Mother Superior’s hair pin is lost in the Oblate’s woodpile.
November 10th, 2008 at 12:56 pm
“I don’t really know what jejune means, but it doesn’t sound good.” (Yglesias)
Actually, it does sound good. But it’s not – That’s the irony.
November 10th, 2008 at 1:24 pm
anybody notice Lowry’s kind of odd take on the history of Republican presidential losers?
November 10th, 2008 at 2:49 pm
Shorter McCain tax plan:
Hey, all you sick poor people! What is your problem? Just die already!
November 10th, 2008 at 3:00 pm
…And decrease the surplus population!
November 10th, 2008 at 4:25 pm
The whole purpose of the plan was to make employer-provided health insurance economically untenable, in very short order, and drive everyone out into the private market for health insurance.
That’s what made the plan so crazy. Obama and Biden focused on the tax part, probably because it was difficult to explain in a soundbite. McCain’s plan was a libertarian wet dream that would have royally screwed millions of people by forcing them into the individual health care market.
November 10th, 2008 at 4:49 pm
Yeah, and it will cost less, and everybody will be healthier and get a free pony.
Although nobody will get a pony, I believe most of the independent analysis suggests that within a year or two Obama’s plan will indeed cost the government less than doing nothing and sticking with the status quo. Somebody has to pay for all those trips to the emergency room by people who have bad colds, you know. Just sayin.
November 10th, 2008 at 6:04 pm
I’m really surprised that the GOP forgot the big lesson of 1994: Don’t mess with people’s existing arrangements. McCain should have proposed extending the tax deduction to people who buy individual policies and are not self-employed, and maybe thrown in a tax credit for uninsured people of modest means. That’s not a comprehensive solution to healthcare’s woes of course, but it would have shown that he cares about the problem without alienating anyone (even on the far Right, which loves tax cuts ater all), and would not have given Obama a target a mile high to aim at.
November 10th, 2008 at 6:51 pm
Fire Departments are nothing more or less than a Socialist enterprise,
No, they’re just a public good, like the national defense and the criminal justice system. That’s why it’s appropriate for the government to the primary funder/provider of those services.
But health care isn’t like that. It’s a private good, like food and housing and clothing and employment. That’s why health care should be primarily funded and provided by the private sector.
November 10th, 2008 at 7:12 pm
The alternative, just letting someone die from lack of treatment, is unacceptable to me. I guess this is the point they arrived at in Sweden, UK, and pretty much every other western democracy, that it is unacceptable. We have a long way to go.
Do you honestly believe that people in the other countries would get that $250,000 care, no questions asked How do you think they get to spend so much less than the U.S. on health care?
I would suspect that in those other countries whose plans you like so much, you probably would never even be informed of the machines that could make your daughter live, or there would be so few available that it would not be an option, except maybe at the end of a long waiting list.
I doubt that the amount of care offered is as much in these countries as you think it is.
November 10th, 2008 at 7:33 pm
Re: Do you honestly believe that people in the other countries would get that $250,000 care
Well, actually, that $250,000 care costs less in most other countries, so maybe, yes! And for sure they can’t be getting significantly worse care or we’d see it in their overall stats. That, or we’ll have to conclude that healthcare is fairly useless after all.
November 10th, 2008 at 7:41 pm
And for sure they can’t be getting significantly worse care or we’d see it in their overall stats.
We just don’t have good stats on the amount/quality of health care by country. If by “overall stats” you mean things like life expectancy and infant mortality rate, those numbers are dependent on so many socioeconomic, cultural and environmental variables that they tell you virtually nothing about the performance of the health care system.
November 10th, 2008 at 8:19 pm
But health care isn’t like that. It’s a private good
Apart from in the rest of the developed world, where it’s not. Sorry, you lose.
November 10th, 2008 at 8:35 pm
Re: We just don’t have good stats on the amount/quality of health care by country. If by “overall stats” you mean things like life expectancy and infant mortality rate, those numbers are dependent on so many socioeconomic, cultural and environmental variables that they tell you virtually nothing about the performance of the health care system.
If large numbers of people were dying of treatable diseases then those deaths would necessarily be reflected in life expectancy figures. Any claim to the contrary is butt-stupid innumeracy walking around on high, high stilts.
And whlel we’re at it how do you explain the fact that almost every foreigner (or American who has been treated by foreign– European or Canadian– healthcare) who visits threads like these has reported that the standards of care are quite comparable to our own– and cost less. Do you think they’re all lying or delusional? Or the fact that whatever complaints foreign people in general may have about their healthcare, support is all but non-existent for junking those systems? Seems to me if these healthcare systems were as hideous as the propagandist Right claims, if people were dying in the streets of easily treatable conditions, there’d be a huge public outcry. Well, where is it?
November 10th, 2008 at 8:40 pm
Apart from in the rest of the developed world, where it’s not. Sorry, you lose.
No, it’s a private good everywhere in the developed world. Sorry, you’re an idiot.
November 10th, 2008 at 8:55 pm
JonF,
If large numbers of people were dying of treatable diseases then those deaths would necessarily be reflected in life expectancy figures.
They wouldn’t necessarily be reflected in the average life expectancy. There is in fact substantial variation in morbidity and mortality rates for various diseases between different developed nations. For example, the Japanese have an exceptionally low rate of heart disease. Not because their health care system is exceptionally good at diagnosing and treating heart disease, but because their diet and other aspects of their lifestyle make them much less prone to heart disease in the first place. There are numerous social and environmental factors that have large effects on health at the aggregate population level, from diet and exercise, to rates of smoking, alcohol and drug use, to pollution levels.
And whlel we’re at it how do you explain the fact that almost every foreigner (or American who has been treated by foreign– European or Canadian– healthcare) who visits threads like these has reported that the standards of care are quite comparable to our own– and cost less.
I don’t think that is fact, and even if it were, it’s basically irrelevant. Anecdotes are not evidence of large-scale patterns or trends.
Or the fact that whatever complaints foreign people in general may have about their healthcare, support is all but non-existent for junking those systems?
I don’t know what level of support there is for “junking” those systems, but there does seem to widespread dissatisfaction. Especially in countries where people are subject to long waits for consultations and treatments, or denied them altogether because their government deems them to be too expensive.
November 10th, 2008 at 9:15 pm
What is a public good, and what is a private good, are largely consequences of how we choose to build our civilization. In a world where professional fire fighters are hired by, say, insurance companies, then they are excludable and, hence, not a public good. In other places and times, whole swaths of what we expect the “public good” of the police and public courts to handle have been undertaken by private parties or fee-for-service arrangements. But we build fire departments and police departments worthy of a decent civilization (mostly), non-excludable and sufficiently well-funded that we can kinda sorta consider them non-rivaled, and, hey presto: “Public Goods.” But God didn’t hand us graven tablets with a list of what kinds of things get to be public goods in all places, at all times.
You confuse the customs of our tribe with the laws of nature.
November 10th, 2008 at 9:43 pm
What is a public good, and what is a private good, are largely consequences of how we choose to build our civilization. In a world where professional fire fighters are hired by, say, insurance companies, then they are excludable and, hence, not a public good.
No, fire fighters (or, rather, a fire-fighting service) is largely non-excludable. You can’t effectively exclude a member of the community it serves from its benefits. The benefit it provides is largely collective by nature. Same for the national defense and the criminal justice system. That’s why we fund those goods with taxes and provide them through the government.
In contrast, health care (and housing and food and clothing and employment) is mostly excludable and rival. The only kinds of health care that qualify as a public good are those aspects that fall into the category “public health.” Things like clean water and sanitation services, and mass immunization against common infectious diseases. And those aspects of health care already are provided by, or effectively guaranteed by, the government.
November 10th, 2008 at 9:53 pm
The only kinds of health care that qualify as a public good are those aspects that fall into the category “public health.” Things like clean water and sanitation services, and mass immunization against common infectious diseases.
1. Your definition of “public health” is outmoded.
2. Even if one agrees with your outmoded definition, the only reason “public health” was limited to these items was custom, as commenter Craig points out above.
Suicide prevention, diabetes management, treatment and prevention of coronary artery disease, and many other suchlike things are also within the purview of public health.
You also mention that we don’t know much about whether healthcare systems in other countries do a good job. The Commonwealth Foundation has a report you should look at, summarized in the Annals of Internal Medicine a couple of years ago. Happy to furnish the link on request.
November 10th, 2008 at 10:04 pm
1. Your definition of “public health” is outmoded.
Well, don’t keep in suspense. What’s your definition of “public health?” By the way, I didn’t define it at all. I gave some examples of it.
2. Even if one agrees with your outmoded definition, the only reason “public health” was limited to these items was custom, as commenter Craig points out above.
Commenter craig didn’t say anything about “public health.” But until you explain what you mean by the term, it’s hard to know what you’re talking about.
Suicide prevention, diabetes management, treatment and prevention of coronary artery disease, and many other suchlike things are also within the purview of public health.
Why? All three of the things you list are obviously both excludable and rivaled, so why are they public health rather than private health?
You also mention that we don’t know much about whether healthcare systems in other countries do a good job. The Commonwealth Foundation has a report you should look at, summarized in the Annals of Internal Medicine a couple of years ago. Happy to furnish the link on request.
Please furnish the link.
November 10th, 2008 at 10:34 pm
The American Public Health Association’s definition:
“Public health is the practice of preventing disease and promoting good health within groups of people, from small communities to entire countries.”
I don’t understand how suicide prevention, diabetes management or CAD prevention are “obviously” “both excludable and rivaled.” Please enlighten me.
I was mistaken by the source. I should have referred to an American College of Physicians position paper published in the Annals of Internal Medicine (link).
The Commonwealth Fund’s criteria for high-performance health care sytems are referred to in the article.
November 10th, 2008 at 10:49 pm
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November 10th, 2008 at 10:50 pm
The American Public Health Association’s definition:
“Public health is the practice of preventing disease and promoting good health within groups of people, from small communities to entire countries.”
So, as I said, most health care is not public health because it’s the practise of preventing disease and promoting health in individuals, not groups of people.
I don’t understand how suicide prevention, diabetes management or CAD prevention are “obviously” “both excludable and rivaled.” Please enlighten me.
Is this really so hard to understand? Pharmaceutical drugs to manage diabetes or prevent health disease can obviously be given or withheld on an individual basis. You can be excluded from the good. And they’re rivalled because consumption of the good by one individual reduces the amount available for consumption by others. Ditto for medication or counselling to prevent suicide.
Of course, something like a public awareness campaign about risk factors for heart disease, or an advertising campaign for a suicide hotline, is not excludable, and would qualify as a public good. And thus, not surprisingly, such campaigns are usually provided by the government.
November 10th, 2008 at 11:02 pm
Mixner,
I just _mentioned_ the classic example of exclusionary fire departments, those owned and operated by fire insurance agencies, such as existed in London following the Great Fire. Subscribers placed the appropriate company emblem prominently on their front doors so the private companies wouldn’t let their homes burn. There is nothing that obliges fire-fighting services to be a public good “by nature.” London grew out of this appalling “let the poor burn” phase by the 19th century, just as I hope we are growing out of our appalling “let the poor get sick and die” phase as we become a bit more prosperous and a bit more humane.
I say again: there is no brass tablet from God with the canonical list of public goods thereon inscribed. Already today, emergency trauma centers are nearly as good as an approximation for “public goods” as are fire departments. You confuse the customs of our tribe with the laws of nature.
November 10th, 2008 at 11:11 pm
Oh, and by the way, I _work_ in public health, and, as it happens, Suicide Prevention is one of the specific areas I support. In the opinion of the Centers for Disease Control and Prevention, one of the foremost public health agencies in the world, every single one of the items Zackary mentions is a public health concern. But, hey, what do we know?
November 10th, 2008 at 11:59 pm
I just _mentioned_ the classic example of exclusionary fire departments, those owned and operated by fire insurance agencies, such as existed in London following the Great Fire. Subscribers placed the appropriate company emblem prominently on their front doors so the private companies wouldn’t let their homes burn.
But they weren’t effectively exclusionary, were they? If you put out a fire in my neighbor’s house and stop it spreading to my house, that’s a huge benefit to me. If my house is on fire, my neighbors will probably ask their fire service to put it out to stop it spreading to their houses. And if it’s a public building that’s on fire, I benefit just as much from saving that building as you do.
I say again: there is no brass tablet from God with the canonical list of public goods thereon inscribed.
Well, you can say it as many times as you like, but that won’t make it any more relevant. The benefits of a fire service, a national defense and a criminal justice system are by nature collective. You cannot effectively exclude individuals from the benefits of those goods. But you can effectively exclude individuals from MRI scans and blood tests and cholesterol-lowering drugs and the vast majority of other goods and services that are collectively referred to as “health care.” That’s why health care is mostly a private good and not a public one.
November 11th, 2008 at 12:28 am
I’m surprised at such a long and substantive discussion that (mostly) skips the key function of insurance of any kind: risk distribution. For me, the key flaw in the McCain plan is that it tendentially favors individual insurance from private providers, and the record of our current system (as well as the theory of insurance) makes it clear that individual health insurance is generally more expensive than group insurance, and individuals are much more likely to be denied this coverage.
The cost issue is not unavoidable, per se, since it rests (if I understand correctly) mostly on the unpredictability of individual health, more than on actual higher costs. Individuals could presumably form purchasing groups based on something besides their employment, and bargain for better rates because they offered a more predictable cost profile. Still, entirely aside from higher transaction costs, such a development would likely be slow.
However, the denial-of-coverage issue for individual insurance is much more difficult, since it is obviously economically rational for any private insurance to deny coverage to someone likely to get sick (or to price the insurance at such a high cost that it did not, in fact, insure).
This is why I was stupefied by McCain’s repeated public enthusiasm, expressed at one of the debates and on the trail, for the possibility that individuals would be able to go out and buy their own insurance. He sounded like the genuinely thought people would be excited at the possibility, or at least of the possibility that they might save money. This showed, more than anything else, that McCain has never had to purchase health insurance in his life. Most of us who have employer-provided care would rather go to the dentist daily than have to shop for our own health insurance!
November 11th, 2008 at 12:54 am
Now, now, Mixner. You know quite well that unequal access to the criminal justice system is not only possible but even common, historically speaking. Sure, a decent society wouldn’t do such a thing, but not all societies are decent. I’ll grant that it is quite rare for a group to have absolutely no access to the system, but tat’s a pretty low bar.
November 11th, 2008 at 1:04 am
Now, now, Mixner. You know quite well that unequal access to the criminal justice system is not only possible but even common, historically speaking.
Now, now, Alan. You know quite well that “no one can effectively be excluded” does not mean “everyone has equal access.”
Let me know when you’re done fighting those strawmen.
November 11th, 2008 at 7:49 am
Re: That’s why health care is mostly a private good and not a public one.
Healthcare is a mixed public and private good– similar to education, where both individuals and the public as a whole reap large benefits from its provision. (And yes, in principle it would be entirely possible to exclude people from education just as you could, in principle, exclude them from healthcare. This has been done in the past). I have never understood why the Right accepts the concept of universal education but not (for the most part) universal healthcare when the two are almost exactly analogous. The Right does argue against a public monopoly on education and at the extremes pushes for ending public schools and replacing them with vouchers– but that would still be a universal system. Why not something similar for healthcare– have the public fund it (mostly) but let its provison remain (mostly) in the private sector.
November 15th, 2008 at 2:40 am
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