Megan McArdle

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Asymmetrical information

05 Sep 2009 08:07 am

From my comments on whether any bill is acceptable to progressives with a lower price tag:

I had a heated online discussion a few weeks back with a friend who is a liberal Democrat; eventually I realized that he was reacting strangely to my comments because he assumed that the federal government was going to give everyone in the country 100% free health care paid for out of taxes. So I quoted him the relevant passage from the House of Representative summary of their proposal; and then I had to quote him another passage to get him to believe that they actually meant to charge people a penalty for not getting insurance because it cost too much. He was quite shocked, and is now among the liberals who oppose the Democratic Party proposals. And he's an intelligent, educated man with a strong interest in politics. He just had not read the actual proposals, and had assumed that what Congress was delivering was what he had hoped for a year ago. I'm sure he's not the only one.

I think also of the young woman with whom I exchanged comments more recently; when I suggested the possibility of her getting her employee health benefits as an increase in pay to spend on her own health care, she thought I was referring to the $100 a month she has deducted from her pay. She apparently had no idea that her employer was paying out several times as much to her insurance carrier, over and above her pay. That is, she didn't know one of the basic and important facts about American health care policy.

Both of these things are distressingly common, and no, conservatives, not just among Democrats.  People don't know what's in various bills, because bills are very complicated, so they just project whatever they think would be neat onto the ones authored by politicians they like--for all the policy heat about mandates during the Democratic primaries, I doubt 1% of the audience understood or cared.

And most people are unaware of how much their benefits cost their employer.  That's why when someone points out that their wages aren't growing so fast, they get all angry and outraged, instead of thinking, "Yeah, but I have $3,000 more health care every year!"  That's partly because people just don't realize that the stuff costs employers as much as it does . . . and partly because insurance is a lousy consumer good.  I remember having a conversation with a coworker within three minutes a) complained that there was no reason that health insurance should cost so much and b) insurance was really important, because a few years ago his wife had had a baby prematurely with massive complications for her, and if they hadn't had insurance it would have cost several hundred thousand dollars.  More broadly, as I pointed out a few weeks ago, If you suddenly get organ transplant coverage, this is a big valuable benefit--but you probably only notice if you need an organ transplant, which is pretty rare.

No one should claim that the real problem with the health care debate is that ignorant people are being tricked into disagreeing with you.  The ignorant people infest both sides of the debate, and it's not clear to me which pool of ignorance is more powerful.

Comments (61)

The elimination of withholding from paychecks would do a lot to drain both "pools of ignorance".

If employees were paid 100% of their gross compensation in cash and then required to immediately pay all of the taxes, etc. which are currently withheld from their current paychecks, their would be little HOPE of avoiding major CHANGE.

If employees, while they were paying their taxes, etc. in cash, could also see their employers pay their benefits out in cash, they might begin to "see the light".

Did you mistype Megan?
When you suggest that people should think, "Yeah, but I have $3,000 more health care every year!"
This sounds like an increase of $3,000 every year. People who think that are much more wrong, than those who ignore the change.
I located this link http://www.bls.gov/opub/mlr/2004/11/art5full.pdf
which is old, but seems to indicate from 1993 to 2002 the change
per year is ~$230 (not $3,000).
Also, in there, in 2001 the total insurance cost $2,889 individual, $7509 family.
However, the point that people might be more knowledgeable if they saw the benefits as cash, rather than just shown on the pay stub, is a decent one.

I very much disagree about withholding. What the previous poster proposes would be a financial disaster, leading to the collapse of the United States as a viable nation. Like any other going concern the US government requires a continuous cash flow. It can't just wait until April 15 for its revenue to come in. Moreover paystubs already show what the government is taking out of each check. This is not hidden information the way benefit costs are hidden.
In regards to the latter I worked at a company where at the end of every year we received a statement showing our total comepnsation, with the full benefit costs broken out, even including what the company paid into public benefits (SS, UI and Workers Comp). I wouldn't want this to be mandatory (there are enough mandates on employers as it is) but I do think all employers should consider doing this to show everyone what their "unseen" pay is and how much such things as health insurance, disability, unemployment premiums etc. in fact cost.

Times Current (Replying to: Jon)

It is interesting to recollect how the US was not a viable nation before 1950, when health insurance was the excecption and not the norm. It is also interesting to note that health insurance only became widespread after 1942, when it was given favorable tax status for compensation.

As a wonderful article in the last issue of the Atlantic points out, the unintended consequence of this policy decision was to forge the foundation of a system whose very nature induces massive inflation in the price of health care, while improvement in peoples health lags. Until the foundation of this ill-conceived system is broken down and rebuilt, health care will continue to be a black hole, sucking up larger and larger fractions of both GDP and individuals pocketbooks.

As stated in the article, do you think you could provide yourself with good healthcare if you were given $1.72 million? Because that's roughly what health insurance will cost over one's life.

It is interesting to recollect how antibiotics didn't come into use until the mid 40s. How life expectancy was 60 years old back then. How polio, measles, diptheria were all scourges back then. You died when you got cancer.

Health care was alot different back then.

David Cohen (Replying to: Jim)

What's really interesting is how people seem to think that these two facts are independent -- "Hey, look at how much more health care costs", "Hey, look at how much health care has advanced. What an interesting coincidence."

DylanE (Replying to: Jim)

"Hey, look at how much more computers costs", "Hey, look at how much computers have advanced. What an interesting coincidence."...Oh, wait a second on that first point...

Not saying you are wrong about the connection, but there are quite a few things that have gotten both better and cheaper (in absolute terms) over the last 50 years. Health care and education seem to be (among) the exceptions to this "rule"

smilerz (Replying to: Jim)

DylanE,
Interestingly enough, these are both areas that are severely distorted by government intervention.

derek (Replying to: Jon)

Amazing how different government would be if they had to collect from individuals on a trust basis. They may actually have to give value for money.

The largest industry in the province I live is illegal growth of marijuana. This is in one of the most civilized and respected countries in the world, known for it's rule of law.

The impetus for individuals to participate is very simple economics: large return with very low costs. And no taxes. And free health care to boot.

Derek

Bill Davis (Replying to: derek)

Well, it's obviously as well known now for its complete disregard for the rule of law.

The large return comes from a limited supply constrained by the very laws being violated. If it were legal, it would be cheaper (anyone could grow), and marijuana that isn't under the constraint of medical marijuana laws would mean less tax revenue for the state (anyone could grow).

Not sure how dipping into your supply of B.C. Bud to relieve your anxiety constitutes "free health care", but more power to you.

Anyone can brew beer, but most don't. It's a multi-billion dollar industry. I think the marijuana industry, if legalized, would work out the same way. Remember most users are too lazy to grow it ;)

Yancey Ward (Replying to: Jon)

Jon,

Why do you think we cannot have a tax bill that people write checks for every month? Does the phone company lack for cash flow? The power company? The cable company?

Bill Davis (Replying to: Yancey Ward)

Perhaps because there's a direct correlation between paying your power, phone, and cable bill, and actually receiving service. No pay, no service. What is the government going to cut off, and how is it going to cut if off? Is it going to block your from using public highways? Going to public parks? Walking into a public library? Calling your public representatives?

Ed Reid (Replying to: Jon)

Jon,

The concern you raise with my initial comment above would be valid only if workers were paid once each year, in early April.

The point of my comment was that most people don't understand how large their gross compensation is, or how much government at all levels takes from that gross compensation. If people received their gross compensation weekly, bi-weekly or monthly, in cash and then immediately paid their taxes, FICA, Medicare, etc. in cash there would likely be a far greater understanding of taxation. Having their employers match their FICA, Medicare and health care insurance payments, in cash, while they watched would further clarify the issues.

Bill Davis (Replying to: Ed Reid)

Are you seriously suggesting that most people can't read a pay stub? It's fairly transparent, and doesn't require much math beyond the + and - symbols to deconstruct. This isn't pages and pages of data (that's why they call it a "stub"), and pay stubs (at least where I come from) list pay (per hour or salary), gross, deductions by category, and net, in very simple, very easy to "deciper" comments. People understand taxes very well...They just don't like to pay them.

Ed Reid (Replying to: Bill Davis)

They come from the subset of taxpayers who will tell you in April that they didn't have to pay any tax, they got a refund. Most of them probably don't read The Atlantic or post comments on the website. :-)

It would be wonderful if posting intelligently here indicated that you were at least average. Unfortunately, I don't believe that is the case.

KR (Replying to: Jon)

Reading is fundamental.

The poster who mentioned withholding said "immediately pay taxes", not "wait until April 15th to pay taxes".

Self-employed people already pay taxes quarterly. If it were up to me I'd end withholding and expand that to everyone. Is that quickly enough for you?

ryan yin (Replying to: Jon)

the US government requires a continuous cash flow

I'm not sure there's much of a cash-in-advance constraint for the government (even ignoring that whole "deficit" thing). Like most going concerns, the gov't has the equivalent of corporate paper, and in fact requires it even given withholding, since taxes aren't literally coming continuously and at a constant rate (nor is spending continuous and smooth).

Wyden-Bennett” exposes the real cost of the hidden employer based health care benefit, and gives control to the employee in form of a raise or voucher to choose the same or different plan.

I did not vote for Obama but I do believe his victory included an expectation (if not a mandate) to reform the health care system. The question is, how is this inchoate impulse realized in policy? f I were to guess what the American people really want with health care reform, it would be something that can be articulated pretty simply and emerges from some basic American values of fairness and common sense:

1. Every American gets a baseline level of solid health care. No one is left behind.
2. No American need be at risk of financial ruin or bankruptcy because they get sick.
3. The program is manageable and fiscally responsible. Americans want to feel reasonably certain that costs are understood, we won’t see mushrooming costs like with Medicare and the prescription drug plan, the plan is deficit neutral and requires no net new taxes.

A problem with the ObamaCare1.0 HR 3200 hairball is that it at best accomplishes one of the three. Interestingly, the Wyden-Bennett Healthy Americans Act (S 391) actually does accomplish all three.

I describe myself as a “libertarian-leaning independent”. There are elements of Wyden-Bennett that cannot be reconciled or rationalized with anything that resembles libertarian principles. Where I have my greatest heartburn with this bill, is the bill has mandated coverage. The bill does not work financially without mandated coverage. It works very well with it. It could be rationalized that individuals will have a much wider range of choices under Wyden-Bennett. But that is not a libertarian argument, because individuals will not have the option to not participate.

The trade-off for this mandated coverage is that we get a fiscally sound health care system that covers everyone, that puts no one at risk of financial ruin from getting sick, and does it without raising the deficit or requiring net new taxes. I am willing to take that trade-off. This is why I describe myself as libertarian-leaning as opposed to libertarian or Libertarian. Once in a while, I feel compelled to lean another way.”

TallDave (Replying to: Dividist)

It's better than ObamaCare, but I'm starting to wonder if mandates will pass SCOTUS review when people start challenging them. The Commerce Clause has been stretched pretty far already.

Dividist (Replying to: TallDave)

It's a good question, but above my pay grade. I guess we'll find out, since practically everything being seriously considered has an individual mandate, and I'm convinced something will pass.

I think that's a really big deal. In the entire history of the US, government has never REQUIRED individual citizens to buy anything. When the government decreed some common good, like Social Security, it was funded with taxes. Does the federal government have any right to tell you how to spend your money? How would self employed deal with this?

This becomes even more problematical due to state regulation of this insurance. You can end up with an individual being mandated to spend $2400 per month for family coverage in a place like New York while similar coverage might be less than half that elsewhere.

When you talk about any employer mandate, whether in the form of coverage or issuing vouchers, you have to realize that many small businesses simply do not generate enough profit to pay that. They will fold.

mischief (Replying to: TallDave)

How many cases have caused the Supreme Court to admit that the Commerce Clause is finite in scope? One, that I remember.

jules (Replying to: Dividist)

I find myself wondering why the Wyden-Bennett bill has been pretty much ignored by both sides....maybe just too much noise...
While I would like "medicare for all" that will not happen in the reality based world I inhabit (though I do wonder about others at times) and, from what I have read, find S392 a sound alternative.

I'm sorry to say that much of the ignorance I have encountered in discussion seems to be willful. When I have laid out the relevant facts, with sources, I have been met with "That can't be true". End of discussion.

I remember having a conversation with a coworker within three minutes a) complained that there was no reason that health insurance should cost so much and b) insurance was really important, because a few years ago his wife had had a baby prematurely with massive complications for her, and if they hadn't had insurance it would have cost several hundred thousand dollars.

Heh, this anecdote fits Obama's rhetoric nicely: the system is terrible and broken and expensive and needs to cover 47 million more people, but your coverage won't change and we're going to cut spending without rationing or stifling innovation or scary "death panels."

Magical ponies to the rescue!

kentuckyliz (Replying to: TallDave)

You don't need magical ponies. Just put the Underpants Gnomes in charge of everything and they'll make it work.

http://en.wikipedia.org/wiki/Gnomes_%28South_Park%29

William H Stoddard

Megan, I'm delighted that you found my comment worthy of quoting, but I do want to note that my quoted words end with "about American health care policy." The lines after that were not mine. They seem to have been mis-styled as part of the quotation, rather than as the first paragraph of your comments, which I presume they were. Questions of accuracy aside, I think the passage reads more smoothly that way; the transition is a little jarring in the current form, but when it's clear that the subsequent lines are a new paragraph commenting on the quoted passage they make perfect sense.

Thanks for your attention!

"The ignorant people infest both sides of the debate ..."

Wow, that's rich. Coming from someone who is supposed to inform people, that's a heaping helping of self-condemnation.

Megan ... you are a large part of the problem with people not knowing what's really going on.

You employ euphamisms such as that the main part of the Democrats' plan is to "have young healthy people pool their premiums with those of the old and sick."

You will forgive the young people if they don't realize that you're describing a massive forced tax increase they will have to pay ... since, you know, you never said anything about taxes.

People are ignorant of what's going on because the press is deliberately ensuring that they're ignorant of it.

Thankfully, it's not working and enough people are paying enough attention to prevent the takeover of the one part of the economy the government hasn't fucked up yet.

What I find interesting and seriously short sighted about this whole nonsense is the fact that the US is right now not able to collect revenues to pay their costs.

No matter what they call it, they have to collect. They won't be able to.

What are they going to do? Demand at the emergency ward an IRS statement?

Oh, if you want to know what will happen when the $2 trillion deficit is brought under control, last week one of the Health Authorities in our province announced that they will do 20% less MRI scans to save money.

Derek

movertyperguy (Replying to: derek)

Most people haven't been told of the extraordinary power that the Internal Revenue Service is being given in H.R. 3200.

The IRS will be the governments enforcer if young people try to get around requirements that they purchase very expensive health insurance.

The state of Massachusetts also uses the state IRS to enforce the law requiring young voters to purchase exorbitantly expensive health insurance that they neither want nor need.

According to the Boston Globe, young families in Massachusetts are being required to pay the highest insurance premiums anywhere in the country - averaging $13,788 per year.

Can you afford $13,788 per year for health insurance? Because the bill that is being moved through the House of Representatives is very much like what is being done to young people in Massachusetts.

stonetools (Replying to: movertyperguy)

All car drivers are required by the states to buy car insurance- a big imposition on liberty and a great expense- yet no libertarian goes around calling for a repeal of that mandate or thinks its a huge invasion of liberty.
This is more of the same, and for pretty much the same reason- most drivers will get into an accident at some time in their life ,and most people will get sick. Libertarians seem to be OK with car insurance now,(although I'm willing to bet that they fiercely opposed mandated car insurance originally).

ryan yin (Replying to: movertyperguy)

Stonetools,
Except that car insurance is about making sure you pay for damage you inflict on other people. That's a clear externality argument. Health care isn't. Seriously, are you that unclear about what it is that other people are saying?

stonetools (Replying to: movertyperguy)

Yes, but from a libertarian POV its still an invasion of your liberty. Why should the government require you to buy insurance to pay for the damage that you cause to another? Shouldn't this be a purely a private transaction between the parties? Indeed, this is how it was prior to the imposition of mandates.
It was because that did not work well that you now have universal car insurance mandates.

ryan yin (Replying to: movertyperguy)

Why should the government require you to buy insurance to pay for the damage that you cause to another? Shouldn't this be a purely a private transaction between the parties?

Requiring restitution for a tort isn't exactly a huge infringement on liberty. I'm not sure what you have in mind about private transactions -- again, torts are by definition not a transaction.

I think the equivalence you're trying to draw here is a bit confused. Most libertarians think that protecting individuals against physical harm to life, limb, and property inflicted by other individuals is a legitimate purpose of the state.

Ryan, just to complicate your analogy further, 13 states require "no fault" insurance. From a site I found describing it:

In most states, auto insurance functions under a traditional fault-based system. Insurance companies make payments based on each person's degree of fault in a particular motor vehicle accident. However, long and costly court battles are often required to determine who is at fault in many accidents. In an attempt to reduce this problem, thirteen states have adopted an alternative no-fault system of insurance. These "no-fault" states include Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.

When you have an accident under a no-fault system, your insurer automatically pays for your damages, regardless of fault (up to the specified policy limit). In exchange for this guaranteed payment, you must give up some of your rights to sue the other driver involved in the accident. There are elements of no-fault in all auto insurance coverage. For example, medical payments and property damage are typically paid regardless of fault.

stonetools (Replying to: movertyperguy)

I think that you find it confusing because the whole idea of car insurance mandates conflicts with libertarian ideology:-)

ryan yin (Replying to: movertyperguy)

stonetools,
No, it doesn't. I just pointed out why the two sorts of insurance are different, and why one doesn't really conflict and the other does. You seem to be unclear as to why a libertarian might ever think government rules are okay. If so, I'm not sure you're clear on what libertarianism is.

Troy,
I'm afraid I don't understand your point. I know liability laws vary by state, and that some states use a no-fault rule, but I don't see why that implies libertarians cannot coherently be ok with requiring one sort of insurance but not the other.

Bill Davis (Replying to: movertyperguy)

The penalty for not having insurance amounts to less than a $1000, per year, on average. (50% of the cost of the lowest priced health insurance policy premium, that meets the Mass. requirements, monthly.)

Residents of Mass. also have a higher monthly income compared to the rest of nation, and the average for the nation as a whole is $12,298 for 2008. The difference between the national average and Mass., for 2008 ($13,500) is $1202, an extra $100 per month. While certainly not cheap, I think they can afford it.

It's certainly less coercive than car insurance; in that case, the fine in my state almost exceeds the cost of getting barebones insurance.


Bill Davis (Replying to: movertyperguy)

Ryan Yin:

Then we can call it an internality argument, for the damage people inflict upon themselves, and pass on for the rest of us to pay for when they head to the emergency room.

Ryan, I was responding to the externality argument you were making.

Except that car insurance is about making sure you pay for damage you inflict on other people. That's a clear externality argument. Health care isn't.

I didn't say it invalidates your point, just that it complicates it. In the 13 no-fault states, car insurance clearly is not about making sure you pay for damage you inflict on other people.

Responding to your recent point, I think it's not only acceptable but laudatory that libertarians be for mandating one kind of insurance but against mandating another as long as they can articulate some kind of reasonable rationale. Drawing reasonable lines and distinctions is the core of what citizens in a democracy do. I'm just not immediately understanding your point about the difference between mandating car insurance and mandating health insurance.

No one should claim that the real problem with the health care debate is that ignorant people are being tricked into disagreeing with you. The ignorant people infest both sides of the debate, and it's not clear to me which pool of ignorance is more powerful.

Why does this follow? Suppose Democrats and Republicans are equally ignorant and have equally distorted ideas about health care and the policy debates. Do they necessarily cancel out? If there really were just a one-dimensional space of possible opinions and possible facts, then sure, but that's a weird claim for a libertarian to make.

(Extreme example: imagine if during the Black Death, there were two parties debating what to do, and due to real ignorance on both sides, one side thought we should burn the witches and the other thought we should kill the cats. Would it really matter which side's ignorance was more powerful? No matter what, they're going to end up doing something really bad.)

Michael (Replying to: ryan yin)

I love the example. Reminds me of the story of Elijah contra the priests of Baal in 1 Kings in the Bible. Hanging out with witches with cats was the way to go.

Some what OT,

but listen to this civil discussion of health care between Senator Al Franken and some tea part activists.

http://www.salon.com/politics/war_room/2009/09/04/franken_video/?source=refresh

The activists asked the same kind of questions that are asked here(
How can we pay for it? Why should we change? What about Medicare?)
and Al Franken answered their questions. He admitted that he didn't have all the answers, but he did well enough that most seemed satisfied

So you see Megan, you can have a civil health care debate.

Speaking as a '46 model Boomer, I am less worried
about end of life extension than current life quality;
As long as the Meds I need are affordable for a working
person, and there are jobs out there, I have no complaint.

I will get a little piqued if the State runs the Country
into bankruptcy, the economy collapses, and I have to try
to survive in a state of nature during the recovery years.

Building on Megan's post...

...AND, it's really hard to become not ignorant on this topic for lay people. The spin started so early and with such ferocity on this debate that trying to figure out what was actually being proposed was next to impossible unless you were willing to read the 1400 pages (or whatever) of the legislation yourself and try to figure out what it meant. (I wasn't.)

So I'd agree with what Megan said here:

People don't know what's in various bills, because bills are very complicated, so they just project whatever they think would be neat onto the ones authored by politicians they like

And I'd assert the negative corollary also: "People project whatever they think would be disastrous onto the bills authored by politicians they don't like."

As a concrete example of both points, how much back and forth have you read about the advantages and disadvantages of single-payer healthcare systems in the past 6 weeks? 10 articles/blog posts? 15? 20? I'd say I've read more blog posts and comments debating the wisdom or foolishness of the Canadian or U.K. healthcare systems than any other topic.

But is there any conceivable way you can look at the current proposed legislation and decide it calls for a Canadian or U.K.-style single-payer healthcare system? My answer, admittedly as a layperson who's already admitted his ignorance about the specifics of these proposals, is "Absolutely not." I realize that many people alternatively hope or dread that the current proposed legislation will eventually lead to a single-payer system, but that's not the same thing.

So, when much of the debate isn't even about the current bills, but instead is just about what people hope or fear is in them, it's pretty hard to figure out where you should stand.

Unrelated question: Megan, I know you love to stick it to Krugman when you can. He often blogs about stagnating wage growth during recent American history (at least the last 8 years, maybe the last 20). Have you ever blogged about what happens to that analysis when you factor in increases in the cost of benefits, especially increases in the cost of healthcare? Have wages really stagnated, or are we just getting our increases in the form of higher healthcare costs?

100% tax paid health is care is of course the goal.

The general pattern of liberal power grabs is they start with a modest bill with hidden huge growth implications, usually initially tied to some emotionally powerful issue. Rational voter models are garbage analyzing this attack, as saving "the children" often genuinely overrides the rational calculations voters still know are true.

The only way to stop liberals is to defeat their modest for the children bills from the start and answer each and every one of their rhetorical questions about the children. Nothing less and this bill passes, we will be staring down the barrel of single payer in a matter of a few election cycles.

Bill Davis (Replying to: tehdude)

This is the general pattern of conservative power grabs as well, such as the war in Iraq, or the curtailment of civil liberties after 911. It is the general pattern of all politics. It's quite simply firing up the mob to get someone hung.

Ahh, the "let's leave the baby to the wolves argument". That will work.

This is what I love about libertarians. They actually believe that rationality works, and this is why they keep on losing elections.

ElectronHayek (Replying to: Bill Davis)

That's a nice piece of bigotry about libertarians. Keep it up man, you're really NOT poisoning the political debate!

Bill Davis (Replying to: ElectronHayek)

How so?

If you pretend to be a libertarian, and believe in some semblance of rationality, why invoke emotional arguments to startle the herd into a stampede?

If libertarians are so successful at arguing their political discourse, then how come they enjoy zero prominence in the political landscape?

Andrew_M_Garland

There is so much confusion about healthcare becase Obama and our legislators have not released a readable policy paper about facts, conclusions, and desired action.

The government demands detailed, researched Environmental Impact Statements before starting a building. We should have Official Policy Impact Statements before our representatives change our society. Obama and our legislators should be proud to present the comprehensive research behind their desire to legislate this change in our lives.

We need proposed results, expected evolution, methods, justifications, comparative studies, past successes of similar policy, funding sources, expected difficulties, the works.

I hope people of all parties and positions could agree that this is fundamental. It is non-partisan to demand that the President and all politicians show how they have carefully researched their proposals.

No company can run without books of account. No government can write legislation without a plan in the background. The plan is there. Let's see Obama's written plan. Then, he can talk about it.

Where is the policy paper, Obama's research on healthcare reform?

---------
People misunderstand that their employer pays for their health insurance. In fact, each employee pays for his own health insurance. Yes, the cost is tax-free because the employer is writing the check. But, if the employer did not make the payment, market pressures would raise the salaries of the benefitted individuals so that they could pay it. We could change the tax law to make health insurance tax-free no matter who pays for it.


Company Paid Health Insurance is Part of Your Salary

You deserve to control it

===== Excerpt =====
Employer provided health insurance is not a free benefit. Why do I say that the employee is paying for all of his insurance benefits? Because, the company (rightly) sees the cost of providing health insurance as part of what is paid to the employee.

Companies compete to pay employees for their productivity. If the cost of health insurance disappeared for the company, salaries paid would rise by the same amount that companies currently pay to provide insurance. Then, you could personally buy insurance of the same quality, that would stay with you, and not depend on your employer. Your remaining salary would be the same as it is now, except for taxes.
===================

it's not clear to me which pool of ignorance is more powerful.

Of course it's clear. It's the pool of people on the other side from me.

ScentOfViolets

it's not clear to me which pool of ignorance is more powerful.

Of course it's clear. It's the pool of people on the other side from me.

Of course it's clear. It's the pool of people who refuse to back up their claims with evidence. For example, people saying 'Americans have the best health care in the world', but then refusing to provide any evidence as to why there are specific indicators which appear to contradict this assertion.

You, know, the people who habitually operate in a non-evidence based mode.

William H Stoddard (Replying to: ScentOfViolets)

ScentOfViolets:

You talk as if the dispute were between people who want to go to single-payer, and people who want to preserve the status quo. But that's not an accurate model.

On one hand, you have a dispute between people who want single-payer and people who want free-market reforms, which would be at least as radical (no tax free employee health benefits, health insurance purchased by individuals from any provider they choose, no barriers to purchase across state lines, coverage determined by individual choice without mandated inclusions, and a probable move toward having insurance solely for catastrophic expenses rather than routine care, greatly reducing the role of insurance companies in health care); both are opposed to the current system and both would involve fundamental changes.

On the other hand, you have a less philosophical and more pragmatic difference between people who want to tinker with the status quo to get as many people as possible into the existing health insurance system, and people who think this would do more harm than good and want to see a different set of reforms.

There is a correlation between the two. But they aren't the same issue. It's a mistake to suppose that the current Democratic Party proposal is even vaguely like single-payer or will have the same effects; it's an equal mistake to suppose that advocates of free market medicine are in favor of the status quo, except temporarily because they regard the current proposals as an incrementally worse policy. Confounding either pair of positions shows that you are not serious about the actual issues, but care only seeing "your side" win the political fight.

Andrew_M_Garland (Replying to: ScentOfViolets)

To Scent of Violets,

You wrote: "People say 'Americans have the best health care in the world', but then refuse to provide any evidence as to why there are specific indicators which appear to contradict this assertion."

Healthcare outcomes are repeatedly cited to claim that the expense of US healthcare is wasted, and that only governments deliver quality care. This is supported by a biased interpretation of the statistics, statistics generated by the very government healthcare systems that want to be seen as better.

USA Healthcare is First - Infant Mortality is Low

John Stossel presents this well. "Why the U.S. Ranks Low on WHO's Health-Care Study" (at the above link) analyzes that life expectancy is a bad measure of a country's health-care system. The US has far more fatal transportation accidents than other countries. Our homicide rate is 10 times greater than in the U.K., eight times greater than in France, and five times greater than in Canada.

When you adjust for these fatal injury rates, U.S. life expectancy is actually higher than in nearly every other industrialized nation. That doesn't show a health-care problem.

The infant mortality statistics are also carefully biased. The US counts every live birth, however premature, toward its statistics, even if the infant lives only a few hours. European countries may only count infants that live at least a day or which meet other health criteria. So, they claim fewer infant deaths, which dramatically changes the average life expectancy in years.

Critics claim that the US is spending too much compared to the numbers reported by foreign national health systems. I don't believe that those systems are including all of their costs. Government programs do not accurately report what they spend.

ScentOfViolets
ScentOfViolets:

You talk as if the dispute were between people who want to go to single-payer, and people who want to preserve the status quo. But that's not an accurate model.

Oh really? Where, precisely, did I say that? I think I was quite clear as to what I meant, and nowhere do I see anything that suggests I am talking about people who are evidence-based vs people who are non evidence based.

ScentOfViolets

John Stossel. Uh-huh. I think you might want to reconsider what counts as evidence:

John Stossel presents this well. "Why the U.S. Ranks Low on WHO's Health-Care Study" (at the above link) analyzes that life expectancy is a bad measure of a country's health-care system. The US has far more fatal transportation accidents than other countries. Our homicide rate is 10 times greater than in the U.K., eight times greater than in France, and five times greater than in Canada. When you adjust for these fatal injury rates, U.S. life expectancy is actually higher than in nearly every other industrialized nation. That doesn't show a health-care problem.

This is an assertion, not evidence. Let's see the raw figures and their adjustments. What's funny about this one is this would indicate that even 80-year-olds are being bumped off by violence at a pretty fair rate, since life expectancy for Canadians aged 80-84 is still greater than life expectancy for Americans in the same age category. Likewise:

We count every live birth regardless of the baby's life expectancy. Under socialized systems such as in Canada and Germany (among many others), low birth weight infants under 500 grams (18 ounces), are not counted in the live-birth statistics.

Let's see the evidence that this is the case, and that the difference is significant. Not mere assertion. You know, like something from the WHO life tables.

Paranthetically, you do know, don't you, that not only does the assertion about differentials in live birth recordings have to be true, but that these cases where different definitions are used have to occur with enough relative frequency to actually make a difference?

smilerz (Replying to: ScentOfViolets)

For someone that criticizes the lack of evidence you don't offer a whole lot of it yourself. for instance you just asserted that Canadians 80-84 have better life expectancy (nice cherry pick by the way).

Krugman and some others on the left lauded the fact that people over 65 have better life expectancy than the rest of the world as some sort of evidence that it was proof that socialized medicine works.

The infant mortality rate differential is VERY well documented and there are many reasons that could explain the difference. Instead of actually exploring the issue you simply demand that everyone provide you of evidence that you are wrong.

That doesn't show the characteristics of an open, thoughtful person - its the characteristics of a closed minded partisan. If that is what you choose to be, more power to you. But don't accuse everyone else of the same thing and think that it gives you some moral high ground.

But since you asked so very nicely, this study by the CBO goes into some of the reasons that cross-national comparisons of infant mortality are somewhat problematic. Be careful though, it doesn't confirm your priors.

http://www.cbo.gov/doc.cfm?index=6219&type=0

ScentOfViolets

Do-over:

ScentOfViolets:

You talk as if the dispute were between people who want to go to single-payer, and people who want to preserve the status quo. But that's not an accurate model.

Oh really? Where, precisely, did I say that? I think I was quite clear as to what I meant, and nowhere do I see anything that suggests I am talking about anything other than people who are evidence-based vs people who are non evidence based.

ScentOfViolets
smilerz (Replying to: ScentOfViolets) September 6, 2009 6:23 PM

For someone that criticizes the lack of evidence you don't offer a whole lot of it yourself. for instance you just asserted that Canadians 80-84 have better life expectancy (nice cherry pick by the way).

Sigh. Actually, I've given it on this blog any number of times, for example:

A look at the WHO life tables confirms that this is true; for those aged 80-84, the life expectancy in Sweden is 8.8 years vs. a life expectancy of 9.1 additional years in the United States.
Since people need more health care as they age, LE would correlate more strongly to health care quality at higher ages. This argues again that we have better healthcare.

Otoh, the life expectancy for Canadians aged 80-84 is 9.4 years. So by your argument, Canadians have the better health care.

This is, as I have alluded to any number of times, quite easy to verify, and at any age for any of a number of different countries.

Now, you got somethin' to say?

Thought not. As to why that particular age group, since you asked so nicely, it is because that at this age, death through misadventure is relatively far down on the list.

Krugman and some others on the left lauded the fact that people over 65 have better life expectancy than the rest of the world as some sort of evidence that it was proof that socialized medicine works.

The infant mortality rate differential is VERY well documented and there are many reasons that could explain the difference. Instead of actually exploring the issue you simply demand that everyone provide you of evidence that you are wrong.

That doesn't show the characteristics of an open, thoughtful person - its the characteristics of a closed minded partisan. If that is what you choose to be, more power to you. But don't accuse everyone else of the same thing and think that it gives you some moral high ground.

What a piece of work. Er, no, that would be you and yours who are demanding that others provide evidence that you are wrong. If you want to claim that "Americans have the best health care in the world", the burden of proof is on you, not me. And it is you, not I who have to supply the reasoning and evidence for why various indicators seem to indicate otherwise. You want to claim that infant mortality stats don't indicate what they appear to on the face of it? Fine. Prove it. Don't throw out some speculation and then 'simply demand that everyone provide you of evidence that you are wrong'. Nowhere am I demanding that others prove me wrong(so yes, in your language, I do have the moral high ground.)

And that is what generates so much ill-will, in my opinion. It's not so much the ignorance per se, but the steadfast refusal of partisans like yourself to actually play by the rules. You make a claim, you back it up. You and yours try to put that on others, and we. don't. like. it.

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