Coverage for thee, but not for me

Ezra blogs about a modest proposal to get universal health coverage passed:

My ace reporting reveals that one element of the health reform strategy Edwards will announce today is a bill, to be submitted on his first day in office, ending health care coverage for the president, the Congress, and all political appointees on July 20th, 2009, unless they've passed health reform that accords with four non-negotiable principles Edwards will detail in the speech. If they don't pass comprehensive health reform, they lose their coverage until they do.

The populists got direct election of senators passed by reforming local state legislature procedures to force support for the 17th amendment in the Senate. In this case, however, methinks that this act would have trouble getting passage. And if it did, that the affected politicians would have little difficulty obtaining coverage from insurance companies fearful of change. But it would probably make good political theater.

Comments

Edwards' health plan, like Hillary Clinton's, like the ones used in Singapore, the Netherlands, Massachusetts, and scads of other countries calls 1) for everybody who now gets medical insurance through their employers to continue to get it, and 2) for subsidized medical insurance based on income for people who do not get work-related medical benefits. For some reason, conservatives find this abhorrent. I wish somebody would explain why.

Posted by Stan | September 17, 2007 10:55 AM

There are many ways to handle health coverage. The first question that must be answered logically, and not just flippantly, is "Does everyone need to have health coverage?"

The next problem that comes up, is that with the government regulating everything of any consequence and power, such as health coverage, your individual freedoms are cheapened and provide less liberty to the individual.

Can a Liberal-Progressive tell me why they would want to give up their personal Liberties, or any vestige of them?

Posted by Acculturist | September 17, 2007 11:32 AM

... all political appointees ...

Why should the heads of the FBI, CIA, NSA, NASA, NSF, etc,; federal judges; federal prosecutors; etc. lose health care? They don't have anything to do with introducing, drafting, and passing legislation. What stupid grandstanding.

Posted by ech | September 17, 2007 12:21 PM

Edwards' health plan, like Hillary Clinton's, like the ones used in Singapore, the Netherlands, Massachusetts, and scads of other countries calls 1) for everybody who now gets medical insurance through their employers to continue to get it, and 2) for subsidized medical insurance based on income for people who do not get work-related medical benefits. For some reason, conservatives find this abhorrent. I wish somebody would explain why.

I can’t speak to the Netherlands but that is not an accurate portrayal of Singapore’s health care system. Singapore has a mandatory savings system called Medisave (siimilar to Bush’s proposal for Social Security reform) for people who can afford their own health insurance to purchase it with government subsidies for the poor instead of programs like Medicare and Medicaid or employer mandates for health insurance. If Edwards was proposing that we adopt a Singapore model, he’d call for the abolition of Medicare and Medicaid entirely, disconnect health insurance from employment, and just provide a limited subsidy for poor to enable them to purchase health insurance.

Instead what Edwards has called for is to put more people on the public dole* by expanding Medicaid and SCHIPS who can already afford insurance and to sock it to employers with a tax on employment. In other words, pretty much the opposite of what Singapore did and the opposite of what conservatives want which is more people getting coverage on their own dime and less not more costs being shifted to third parties whether employers or taxpayers.

* Anyone care to bet that if you read the fine print of the Edwards plan, there will be a provision in there (similar to the Clinton plan in 1993) to have the government absorb the legacy costs of certain industries who can no longer afford the overly generous benefits promised to retired employees and now wish to have the taxpayers pick up the tab? In other words – sunrise industries will get hit with a whopping new tax burden for the employees whereas sunset industries will get a government bailout because they have the (mis)fortune to have a unionized work force.

Posted by Thorley Winston | September 17, 2007 12:34 PM

Why should the heads of the FBI, CIA, NSA, NASA, NSF, etc,; federal judges; federal prosecutors; etc. lose health care?

Why should they receive it? There are 47 million Americans with no coverage and tens of millions more who can't get coverage through their jobs. If the President wants to give free government health insurance to the people s/he appoints to positions of power, the President should make sure every other American is covered, too.

It seems to me like a pledge that political appointees in government might actually suffer some consequences if the government doesn't do its job. I know that's a mind-boggling paradigm shift from the current administration, but take some time and you'll start to get used to the idea.

Posted by brooksfoe | September 17, 2007 12:35 PM

The next problem that comes up, is that with the government regulating everything of any consequence and power, such as health coverage, your individual freedoms are cheapened and provide less liberty to the individual.

Something to think about – and I would encourage every conservative or libertarian who is thinking that a Democrat President might not be a bad idea in the hopes of gridlock with Congress* - is that during the 1990’s many leftist executives (POTUS, governors, and AG’s) figured out that they could more easily try to enact much of their agenda by avoiding the democratically-accountable legislature and filing lawsuits against companies that they didn’t like (e.g. tobacco, firearms manufacturers, etc.). It didn’t matter whether they ultimately won the lawsuits, they were expensive for the defendant’s to litigate and often they could force the defendants into a settlement negotiation to get them to agree to do which they couldn’t persuade the legislature to get them to do.

Don’t be shocked if during an Edwards or a second Clinton administration we see the revival of lawsuits against politically disfavored industries in the goal of controlling “health care costs.” If the government doesn’t want you to eat junk food, smoke, or anything else it deems “unhealthy,” they won’t pass a law to directly control your behavior (no that would be a violation of “individual freedom”). They’ll just sue or regulate the companies that make the stuff you enjoy until they don’t make it anymore.

* Which won’t do a frelling thing to fix Medicare or Social Security before the baby boom generation begins to retire.

Posted by Thorley Winston | September 17, 2007 12:44 PM

Could someone explain why the burden for health care coverage is on employers? Is there a fundamental difference between say a job paying $45K per year plus health insurance and a job paying $50K per year with no insurance (assuming insurance costs $5K per year)?

My point is the individual pays either way. Requiring everyone to pay with a sliding scale of subsidies for those less able to pay (sorry, no subsidies for the $80K per year consultant) seems fundamentally fair to me.

Also, creating a better alignment between those paying the cost and those getting the benefits would hopefully create a better brake on price increases.

And Stan, perhaps one of the reasons you think conservatives find it so 'abhorrent' is that the noted flaming liberal Mitt Romney pushed through the idea in Massachusetts last year.

Posted by dix | September 17, 2007 1:21 PM

Acculturist -
I don't see how a plan like this infringes on my liberty. As a retiree, my wife and I are covered through my former employer, and I don't anticipate having to buy subsidized private insurance.

Thorley Winton - My understanding of Singapore's health system is that basic medical care is covered in the manner I described and that the medical savings accounts you discuss are used only for major medical expenses. The plan used in the Netherlands also differs; if it's the same as when I lived there, medical and dental coverage for children of age 17 or less are provided by the government. All the plans I described vary in minor ways, but all resemble each other in their key elements.

I still haven't found out why conservatives find medical insurance plans like the ones I described so hateful.

Posted by Stan | September 17, 2007 1:29 PM

And Stan, perhaps one of the reasons you think conservatives find it so 'abhorrent' is that the noted flaming liberal Mitt Romney pushed through the idea in Massachusetts last year.

In fairness to Governor Romney (full disclosure – I am tentatively a Mitt Romney supporter largely because of the issues of health care and entitlement programs reform) he did oppose and has repeatedly said he opposed the employer mandate portion (which will probably be preempted by ERISA) but agreed to is as part of a compromise with the Democrat-controlled legislature and still thought it was better than the status quo. I think that was the most onerous provision to many conservatives who rightfully saw it as further disconnecting the consumer from the payment process. That’s not to say that many won’t still object to the idea of a government mandate that people buy health insurance on general principle.

Personally, I think we ought to focus on thinks like Association Health Plans (to let individuals and small groups such as small businesses) band together to buy policies at rates comparable to that of larger employers, fixing the tax subsidy for employer-provided insurance which distort so that people who buy their own policies aren’t penalized, expanding Health Savings Accounts, letting consumers buy policies anywhere in the country without all of the unfunded mandates that increase the premiums 25-30%, and targeting whatever government subsidies there are only to the needy rather than to wealthy* senior citizens. Doing those sorts of things will reduce the number of uninsured people with less tax dollars and do it by using competition to make health insurance more affordable for more people.

When we’ve got those things done we can talk about whether that’s sufficient, whether we should have a Singapore-style Medisave system, adopt a Commonwealth Care mandate that if you don’t buy health insurance you have to self-insure, or some other market-oriented or quasi-market reform.

* It always struck me as odd that the same people who think that the “rich” don’t “need’ a tax cut (getting to keep more of their own money) are adamant that the “rich” retirees should have their health care paid for by comparatively poorer younger workers.

Posted by Thorley Winston | September 17, 2007 3:04 PM

Edwards supports legislation that grants benefits to legislators based on how they vote? Being a [foriegn] lawyer, I understand why this is unconstitutional in several parliamentary systems. I can't imagine that US law could be so messed up to permit it.

Rod

Posted by Rod | September 17, 2007 3:14 PM

Edwards supports legislation that grants benefits to legislators based on how they vote? Being a [foriegn] lawyer, I understand why this is unconstitutional in several parliamentary systems. I can't imagine that US law could be so messed up to permit it.

It’s also unconstitutional in the United States:

Article II Section 1

The President shall, at stated times, receive for his services, a compensation, which shall neither be increased nor diminished during the period for which he shall have been elected, and he shall not receive within that period any other emolument from the United States, or any of them.

Article II Section 1

The judges, both of the supreme and inferior courts, shall hold their offices during good behaviour, and shall, at stated times, receive for their services, a compensation, which shall not be diminished during their continuance in office.

Amendment XXVII

No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.

I though that this was just another case of Ezra shooting his mouth off about a topic with which he knows nothing but if Edwards really is stupid enough to propose this legislation, then I guess the only question is – which if any of us his opponents are going to be the first to point out that it violates (at least) three different provisions of the Constitution?

Posted by Thorley Winston | September 17, 2007 3:41 PM

Brooksfoe-
It was all I could do to supress a snicker when I reached your bit about "political appointees in government might actually suffer some consequences if the government doesn't do its job". If you could highlight for me the relevant passages in the Constitution that stipulate that it is the government's job to provide health insurance, I would indeed be grateful. And if you find it lurking in the shadows and penumbras of "general welfare", kindly differentiate health insurance from auto insurance, homeowners insurance, food, daycare, gasoline, phone service and other "essentials" and explain why the government (meaning taxpayers) shouldn't provide universal coverage for those as well.

Posted by m | September 17, 2007 3:50 PM

Thorley -
I support universal benefit programs like social security and medicare on pragmatic grounds. If they were restricted to low income people they would never pass Congress, and if they didn't exist at all we'd go back to the days of mass poverty for the elderly. For the same reason, I prefer the medical insurance plans proposed by Edwards and Clinton over a single payer plan or a plan in which everybody buys their own insurance with the help of a government subsidy. Both have the advantage of divorcing medical insurance coverage from employment, but both suffer the disadvantage of hurting people who presently have good coverage through their employers. Finally, I think conservatives are short-sighted in their opposition to all plans for achieving universal medical insurance. Barring some miracle, like a return of 50's style prosperity to the domestic auto industry, millions of Reagan Democrats are going to lose their medical benefits in the near future and they're going to demand government help. I'm surprised conservatives don't try to influence the debate rather than simply say no.

Posted by Stan | September 17, 2007 4:15 PM

It's such a pleasure to come back to this blog after spending a little time on M. Yglesias's blog--and with his angry, radical adherents. But more to the point, Thorley Winston wrote:

If Edwards was proposing that we adopt a Singapore model, he’d call for the abolition of Medicare and Medicaid entirely, disconnect health insurance from employment, and just provide a limited subsidy for poor to enable them to purchase health insurance.

Now that strikes me as an eminently sensible proposal. Let the government offer a modest subsidy to the indigent and allow the rest of us the freedom to choose our own health care.

Hillary Clinton and John Edwards like to proclaim their fealty to the poor, but in truth what they are peddling is a kind of socialism for the middle classes. That's what Medicare and Social Security really are. And Hillary and company try to persuade people that they can get something for nothing--that they can have universal, free, government health care without higher taxes, less innovation or rationing. Caveat emptor.

Posted by Isocrates | September 17, 2007 4:22 PM

Isocrates -
Both Clinton and Edwards propose financing mechanisms for their health plans based on rescinding the Bush tax cuts on upper income tax payers. I haven't read their plans in detail, but I'd be surprised if they didn't also call for the abolition of Medicaid. Re your comments about Medicare and Social Security being socialism for the middle class, do you really think they should be abolished? And finally, I don't think you understand the problems faced by people in manufacturing states. Heavy industry is bailing out on medical benefits, and a decent medical insurance policy for a family of four costs more than $10,000. If the Republican party continues to take your position on social programs, we're going to have Democratic presidents from here to eternity. I'd like to see this. Would you?

Posted by Stan | September 17, 2007 4:43 PM

brookfoe - Re: "If the President wants to give free government health insurance to the people s/he appoints to positions of power, the President should make sure every other American is covered, too."

The president doesn't give free government health insurance to the people he appoints to positions of power. The government gives health insurance as part of compensation for employment.

The people of positions of high power in this administration are also "given free dollars", but we call that a salary. The health care benefits are just as much part of their compensation as the salary is. Its not a freebie, its compensation for their work.

Posted by Tim Fowler | September 17, 2007 5:37 PM

An analogy:

Customer A is well off, with high end cars on the policy. He does not complain if his six month premium rises by $1500 after adding his son. He is good natured and very chipper. (A variant of type A is not concerned about ability to pay either, but wants to go over the details of the increase, just to make sure that you know, that he knows, that you know, he is on top of things). Generally this customer smells of good citizen, with clean driving record.

Customer B is usually a bit older. Comfortable, but not wealthy, and sometimes just retired or preparing to. This customer wants to review all available discounts and is concerned that you raised the premium by $23.45 and wants to know why. How's my driving record?, he asks, knowing full well it's as clean as a new golf ball. He then asks why his premium should rise when his record is clean. You explain to him that insurance is not based on individualism any more than a mutual fund is based on one stock. You explain how the bad drivers impact the good, unfortunately. He is outraged, and drifts into shady territory about "those people" and you end up having to cut short an extended digression on immigration policy, knowing the bosses are monitoring the calls and that we should all love one another and live in perfect harmony. (Secretly you may agree or disagree and want to pontificate but don't want to get wankish lest you get fired or miss lunch in five minutes).

Customer C has missed a payment, here, and there, and beyond. Their policy is canceled but they want to be reinstated (now that they are calling in a month later and discovered the news). Not to mention that, cousin James and Aunt Linda live in the household, and when we forced them to add all licensed drivers to the policy, the premium rose by about $900, all of which is due before the new policy period begins. Of course you know, based on what they are telling you, that 1) they cannot at all afford a policy that is costing them $3000 over six months and 2) that, given the driving records involved, and the drivers around them, and their credit score, and their neighborhood, that $10000 might be the true market price for insuring them. And you know too that if the choice is beween coming up with $1000 on the spot to reinstate the account (which is about $6000 more than they have), or them using their last two cents for pizza, well... let's just say they won't be faxing over the claims free letter they have to send before being reinstated. (Aside from not having a fax).

Customer A would be defined as libertarians and the wealthy. Customber B would be the masses, who largely pay no attention to economic issues nor understand how insurance works, and that the world does not revolve around their personal circumstance. Customer C would be the poor. All are real situations, but generalizations of types.

You find parallels of all these types and more in the healthcare arena, and I think that if you mandate coverage without helping those on the low end (and not by reimbursement) you run into problems, but at the same time, if you create a system that does not include all individuals there will be the certainty of pricing difficulties for insurers.

So I am looking for the candidate who mandates coverage, provides portability with some corporate or government assistance, assumes the poor will have great difficulty paying up front, and who develops a clear method by which individuals can compare prices across medical service providers. Maybe with a method by which a corporation will be forced to "opt in" or "plug into"* a person's individual plan via a cost reduction for that employee.

*(For example, you are single and paying $100 a month into the national pool, but get hired by The Atlantic Monthly. Atlantic Monthly is then required to reimburse you for a portion of that amount, and then, when you leave, costs automatically revert back to standard national pool rate).

Per Edwards, I've no expectation that Dems or Reps can perform the necessary tasks without demagoguery, or being killed by the demagoguery of others.

Posted by Finn | September 17, 2007 6:41 PM

Aside from the arguments about constitutionality et al., can anyone explain why on Earth Congress would pass such a bill? "I will make my family's healthcare coverage a hostage to my political opponents"? And how many top civil servants (the ones who can best command a premium in the private market) will immediately tender their resignations rather than gamble on the legislature doing Edwards' bidding?

If he really is thinking about this, Edwards may well tank his own campaign.

Posted by Shelby | September 17, 2007 7:56 PM

Let's also have congressman pay their taxes at the highest marginal rate. While we're at it, since the federal deficit this year will be about 6% of revenue, let's make them take out unsecured loans for 6% of their salaries.

Posted by Kwyjibo | September 17, 2007 8:22 PM

I. Both Clinton and Edwards propose financing mechanisms for their health plans based on rescinding the Bush tax cuts on upper income tax payers.-Stan

Not really. The kind of spending they have in mind would require large broad-based tax increases. A small tax hike on the highest earners won't raise sufficient revenues. So they are, in effect, telling most people "You can have free health care. You can get something for nothing."

II. Re your comments about Medicare and Social Security being socialism for the middle class, do you really think they should be abolished?... If the Republican party continues to take your position on social programs, we're going to have Democratic presidents from here to eternity. I'd like to see this. Would you?-Stan, again

Well Stan, I would like to see these programs phased out. They have been very costly, since they've required large distorting taxes to fund them and have significantly reduced the incentive to save.

You are right, though. Such a radical reform is unlikely, and proposing it would be political suicide for any politician, so the next best thing is to make marginal improvements. If we can't cut them back, we ought at least to slow their growth. Social Security, for example, should have a higher age of eligibility and benefits indexed to inflation rather than nominal wages, and Medicare should have higher copays. Such measures could be introduced within a larger bill offering tax deductions for medical insurance and expanded health savings accounts--to mix some honey with the wormwood.

Posted by Isocrates | September 17, 2007 10:46 PM

I. I'm not sure as you are about how much additional revenue would be required for putting a universal coverage plan into effect. It depends on how what kind of medical insurance is offered to the uninsured and how big the subsidy is. One can see this by contrasting medical spending in Singapore and the Netherlands. Therefore, I won't comment on this point except to say that most polls ask people if they are willing to pay additional taxes to finance a universal coverage plan, and they say yes.

II. I think social security can and will be made solvent by raising the cap on incomes subject to the social security tax. Regarding Medicare, I agree that something more drastic has to be done. I expect this to be a combination of a higher Medicare tax and higher copays.

Posted by Stan | September 18, 2007 5:49 AM

m:

kindly differentiate health insurance from auto insurance, homeowners insurance, food, daycare, gasoline, phone service and other "essentials"

There's not much point in us engaging in this debate; the overwhelming majority of Americans feel that it is society's job to ensure that people who cannot pay for medical care should receive it at public cost, and they have already ended this argument, decades ago. There is no political constituency for repealing Medicaid or for allowing hospitals to refuse emergency treatment to people who cannot pay for it. The Constitution says nothing about the government paying for basic education either, but it certainly does not prohibit it, and that argument too has been settled for a very long time.

If you really want to go down this road: 1. you can get around without a car, but you can't get around without legs, unless somebody gives you a wheelchair. 2. similar distinction between a tree falling on your house and a tree falling on your head. 3. if you are starving, the government will in fact give you food -- look it up. 4. the distinction between school and daycare is arbitrary and varies country by country; some states are starting to extend preschool to 2 and 3 year olds to increase productivity among primary caregivers. 5. my objections to subsidizing gasoline for poor people in areas without public transit are pragmatic, not fundamental; the principle is not much different from building free roads in the first place. 6. phone service is indeed essential, which is why US law mandates that phone companies must provide affordable service in non-profitable rural areas; this is analogous to the community-rating and non-discrimination sections of Hillary Clinton's excellent new health insurance plan.

Posted by brooksfoe | September 18, 2007 6:19 AM

Why should employers be involved in health insurance at all? My employer doesn't help me out on my car insurance or my child care expenses. I'm sure there are historical reasons why this is so, but any major reform of the system should seriously consider eliminating whatever incentives apply to businesses to provide health insurance and revert those to the individual consumer. This would eliminate a market distortion where employment and insurance are linked and people wouldn't have to consider their health care when deciding whether or not to change jobs.

EI

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