Tuesday, February 05, 2008

I Think Health Care Mandates Are A Really Bad Idea (updated below)

I'll admit I'm older now (41) and I have a federal job that pays pretty well and which provides health insurance coverage, so I'm not nearly as gung ho for universal health insurance as I once was, particularly since while there are many millions at any particular moment who lack coverage, it isn't clear how many of these could afford coverage on their own and seek not to purchase it, or what proportion of the uninsured is only uninsured on a temporary basis.

In any event, requiring employers to cover their employees (the 1993 Clinton plan as I understood it) and requiring individuals to do so (the current Edwards-Clinton plan as I understand it) even if subsidies are provided strikes me as just really bad politics*, and probably not all that good of policy either in terms of the share of the population that would be insured as a result of the extra billions spent.

At a time when Republicans in the White House and in Congress have made significant inroads towards coercive government activity on behalf of "national security" it seems a really terrible idea to add to that with a coercive economic policy initiative, particularly when, in terms of the share of the population to be affected, is not especially large.

*(h/t Andrew Sullivan)

Update: I've now read through some of the recent Krugman Obama-Clinton-Health Care columns that have apparently attracted so much attention. Part of the problem going on with this debate is, from what I can tell, that Krugman and his admirers on this issue aren't clear as to what the specific health care problem is they want the candidates to address. Is the problem availability/affordability? This is what I have always considered the main problem--people don't have and can't afford adequate health insurance and are left untreated or bankrupt in emergencies, or aren't getting the preventative care they need that might alleviate some of these emergencies. You might call this a sort of quality-of-life approach.

But this isn't apparently what drives Krugman's concern with health care reform. In yesterday's column he says this:

But the big difference is mandates: the Clinton plan requires that everyone have insurance; the Obama plan doesn’t.

Mr. Obama claims that people will buy insurance if it becomes affordable. Unfortunately, the evidence says otherwise.

After all, we already have programs that make health insurance free or very cheap to many low-income Americans, without requiring that they sign up. And many of those eligible fail, for whatever reason, to enroll.

So, Krugman candidly admits that the issue is not affordability/availability. The problem is...well, I'm not sure. He does say that:

An Obama-type plan would also face the problem of healthy people who decide to take their chances or don’t sign up until they develop medical problems, thereby raising premiums for everyone else.

This makes it seem as if Krugman, who is after all, an economist by training, is more properly concerned about fairness and equity issues and with the particular problem of having so-called "free riders" who are healthy and thus won't pay for coverage. This leaves the insurance pool to cover the sickest, most costly people. Krugman also notes that Clinton's current plan is only slightly more expensive than Obama's.

But the cost issue is pertinant only because of what Krugman notes is the gap in coverage offered by the two approaches--Clinton's plan is said to cover twice the number of uninsured as Obama's.

Maybe Krugman, being an economist, is singularly concerned about the relative efficiencies of the candidates' plans. And all else being equal, his support for Clinton's plan on this basis would be reasonable.

But if Krugman's real concern is health care finance-coverage efficiency, the efficiency with which the narrowing or elimination of the current gap in coverage between the insured and uninsured is accomplished would seem to be the least of the country's health care problems.

Having read, and usually agreed with, much of what Krugman has had to say in his columns through the years, I suspect that Krugman's real interest here is in under-cutting the current employer-private insurance-for-profit system. Whether he does so on the basis of some idea of rational economics or political ideology I don't know.

I did find this statement in another NYT article (not written by Krugman) interesting in this regard:

If the government is able to undercut private insurers on price — by forgoing profit, reducing overhead, and maximizing economies of scale — it theoretically could put the private system out of business and become the de facto insurer for the nation.

Maybe this is Krugman's wish, if not aim. But I don't think it's necessarily the best or only proper goal of a governmental role in health care. Either way, Krugman and those who echo his concerns should be more clear about what they see as the health insurance-care "crisis". Is the issue efficiency or affordability? If it is affordability, the implicit conclusion from Krugman's argument is that we are much of the way there already. If it is about overall economic efficiency of health care production and delivery, than any solution to the uninsured would amount to a band-aided stop-gap, mostly irrelevant to the issue. And if the real goal--economic or political--is a complete overhaul of the health care system, than they need to make the case why this should be pursued.

Update II: Well, I think Krugman lays it all out on the table here:

Now, if I had my way I’d just go to single-payer, Medicare for All. But that’s politically impossible, at least for now. What had me hopeful was that the Democratic candidates seemed to be offering a more feasible path that could work politically: regulation, subsidies, mandates, plus public-private competition that could eventually lead to single-payer.

This is pretty candid of him. He deserves credit for being this blunt about it. But he shouldn't be surprised to experience some push-back when he is.

Update III: This is an interesting twist (and also provides some context to David Brooks' column today).

1 comment:

shoffy22 said...

ahh very interesting! yeah people talked about this a lot at the NASI conference last week - what an interesting subject - my feeling is that it's probably bad politics once you get to a general election format or in actually trying to pass it next year, but i think it's good policy if it is grouped with lots of other key health care changes. so to me this seems like an open question whether to go for them or not - for a lot of other changes to the health care system (regulations so that insurers can't deny coverage, pools for individuals/small business to buy coverage at better rates, subsidies to make it affordable for lower middle class people) are all more important than a mandate, so if politically a mandate is going to derail these other reforms, it might be better to drop it and focus on the other things.

If it's politically possible to include a mandate in a reform package, then i think it will achieve better results - for i think people do need to be gently pushed to buy insurance for even with it made a lot more affordable - it will be a decent cost (maybe something like $100 a month for a house earning $30K to $40K a year) where with lots of other expenses it will still be not a clear choice for lots of families to buy it.

But I think we may need to compel all to buy into health insurance both for their own good and for the system as a whole - as having everyone covered in a large pool to share risks and costs seems to be a key element toward rationalizing health care and controlling costs in the long run.

cool cool! thanks for the great post bulworth! will have to read the other links you have included as well, haven't read them yet.