Why I Like Hillary’s Health Care Proposals
Let’s start from a basic premise. I believe in social insurance, the idea of a large risk pool whereby the young and the healthy subsidize the old and the ill, on the understanding that they themselves will be taken care of in their time of need. It’s efficient, as risk is spread among a large group. It’s also equitable and accords well with the Catholic principle of solidarity, of a community that looks after its own. I do not believe that actuarial insurance– insurance based on individual risk assessment– should underpin the health care system. Sure, the young and the healthy will get a great deal, but the others will face grave difficulties, as they are priced out of the market completely, or face prohibitive premia. It also relies on an individualist anthropology, and– in Calvinist-style– views individuals as personally responsible for their lot in life.
Creating a single risk pool has huge advantages, which is why I am a big supporter of single payer systems (see here for the full argument in all its gory details). Suffice it to say here that I believe it would be more efficient, more equitable, and achieve better outcomes than the current system. I have no ideological opposition to private health insurance; I merely believe that the profit motive is inappropriate in this area. Until now, risk pooling in the United States was accomplished through employers, and for the elderly through the government (Medicare). But this system is becoming increasingly untenable in an era of rising health care costs, as businesses cannot afford to shoulder this burden and remain competitive. Individuals are being forced to shoulder the risk, with often disastrous consequences.
The Republican solution is to abandon the whole idea of social insurance altogether. They feel that if market forces are brought to bear on the consumption of health care, costs can be contained. By divorcing who pays from who consumes, people have scant incentive to economize– so the argument goes. The problem with this reasoning is that health care is not some good you purchase in the market. For a start, the “seller” of the service has a major informational advantage over the “buyer”. You go to a doctor because you are sick, not because it is free and you have nothing better to do. So the Republican solution is really based on the premise that Americans are over-consuming health care. That argument is more than a little bizarre, with 47 million uninsured and the fact that health care is rationed extensively by cost in the US (survey evidence suggests that more than half of sick Americans stayed away from the doctor on health grounds over the past couple of years).
The real issue is the business model of the insurance companies. How do they make money? Quite simply, by screening people and weeding out the greatest risks. They will deny coverage altogether, or deny needed care in particular circumstances. Americans’ health care choices remain at the whim of faceless insurance company bureaucrats. The insurance companies spend $50 billion a year doing this. Just look at the comparisons: Medicare devotes about 2 percent of its resources to overhead, compared with about 20 percent in the private insurance sector.
However, it would be politically infeasible to leap from the current system to single payer overnight. That was the problem with the 1994 reform proposal (which did not even propose anything as radical as single payer): although most would have gained from it, people who had insurance feared giving it up. They had natural concerns about the unknown. To implement reform, therefore, we need to move in small steps, to persuade people that the new system is better. Reform must be in the realm of what is politically feasible.
Which brings me to Clinton’s current plan. (Ezra Klein and Jonthan Cohn provide good overviews, and I will lean on them liberally). So as not to make the mistake of 1994, Hillary basically tells people that if they are happy with their current health insurance, they can keep it. There is an individual mandate, in that everybody is required to purchase health insurance. This may sound like the Republican approach, but it’s not. For Hillary is wedded to the idea of social insurance, and she will create a purchasing pool maintained by the government, and people (if they choose to change insurance or if they don’t have it in the first place) can select plans much as those in current risk pools do today. Importantly, insurance companies will no longer be able to discriminate among people in the pool based on medical conditions. They will have to set prices based on the average member of the community. It’s just like the plans offered to employees of large companies, except that the “company” is a virtual one. The key is risk sharing. You are not left facing the insurance companies on your own. The bargaining power has shifted. And if you are still too poor after all of this, you would qualify for financial assistance.
There’s an interesting quirk about her plan that I think is brilliant: one of the options available to people will be a government-run plan, using the basic Medicare model. If this proves to more efficient than private insurance, people flock to it and we will have a de facto single payer system. But if it does not perform, people will stay away. What’s not to like? This is truly bringing market forces to health care in a way that does not stack the deck against the patient. Shouldn’t the Republicans embrace this system?
We can’t really predict what will happen. In the past, when traditional Medicare was forced to compete with Medicare Advantage (instead of paying the provider directly, the government funnels the money to a private sector intermediary, typically an HMO), the latter proved between 10-20 percent more expensive, because of overhead. It’s a classic rent-seeking middle man. However, the same might not happen under Hillary’s plan. The insurance companies, realizing their very existence is in jeopardy, might shake themselves up and compete with the government plan competently. This competition, unlike the one proposed by Republicans, could actually bring about efficiency gains while bringing about affordable universal insurance. As I said, what’s not to like?
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MM–
If you prefer a large risk pool, etc, etc,…. why not create one by people who want to join voluntarily? Why do you need to use the coercive arm of the state to establish this? Why not just form a group. call it, “Morning’s Minion Health Care Co-op” and go from there. Actually, this was done in the early 1900s, and do you know what the AMA said? They said that it was bad for doctors because the doctors on retainer for the mutual benefit societies were not making enough money!
Why does solidarity always have to feature the guns of the state? Coercing other people into solidarity doesn’t really seem like genuine solidarity to me.
Michael – you have a rather strange conception of “coercion” and “the guns of the state”.
How about: “It is desirable to organize, through the government we’ve chartered, a scheme whereby no one has to go without health insurance.”
Michael,
I like the idea in principle, but find it impratical. The only way it would work is to make sure the insurance companies cannot discrimate based on medical history or condition, and charge based on the average member of the pool. And think of the incentives on the other side– what if a group of young, healthy people decided to form a pool that excluded all others, to keep costs down. That would violate the idea of social insurance. So I see a role for the government as a setter of rules, rather than a dictator who runs everything.
MM,
Thanks for the summary. It can be hard (or at least very time consuming) to go through each plan and figure out exactly what the candidates are proposing. I agree; her proposal does sound good. How would you say it compares to those from Edwards and Obama?
Matt,
I think that what Michael was getting at is that the state has a monopoly on legitimate force. If we “….organize, through the government we’ve chartered, a scheme whereby no one has to go without health insurance,” it entails that it is right and moral to force people to pay for other people’s health care. It is forced, or coerced, because if someone attempts to opt out paying into the system, they will be arrested (probably against their will) and sent to jail. This actually happens relatively frequently in New Hampshire. We have tax-evaders who get into show downs with the police and who are eventually taken in for tax evasion.
Why not non-profit health insurance companies? If taking away the profit motive can reduce your overhead from 20% to 2%, then presumably a non-profit health insurance company could be highly competitive.
“views individuals as personally responsible for their lot in life. “
Individuals are personally responsible for *some aspects* of their lot in life. For example, if you’re like me and decide not to engage in anal sex then you have less chance of getting AIDS. Some choose to smoke, eat junk food, go skiing — those are all factors. The blanket, vague statement about how Catholics like to take care of people ergo Hillary-care is convincing only to those who want to see it pushed through.
But maybe Hillary will re-introduce anti-sodomy laws, close down ski resorts and turn the tobacco plantation into Republican re-education camps. Who knows….
Zach: As a practical matter, I don’t think it’s the case that “the state has a monopoly on legitimate force,” but even if I accepted that premise, it has a monopoly only because it has been granted one by the citizens who have chartered their government.
Now, I could probably make a case that taxes = tyranny (and I’ve come across that idea on libertarian-right websites, and PJ O’Rourke’s books) but I think it’s ultimately a pretty thin case.
Taxes are the result of laws passed by people you and I elected; the penalties for violating those laws are decided by judges we either elect, or who are appointed by people we elect, etc. Taxes are there because we (broadly speaking) want them, and appreciate the benefits they pay for.
Matt,
How is it not the case?
The only legitimate coercive force is the government. And yes, the fact that we elect our representatives is what makes its force legitimate.
Matt – The question is whether one can forward Christian causes based on those Christians (or non-Christians) who disagree with the idea that universal health care is a necessity.
Here are the dangers I see inherent in a state-run health care system:
1) In our current political climate, the Hilarycare plan will likely include provisions for “emergency contraception” and abortion.
2) Anyone who accepts payment from government-funded health care will be required to provide those services.
3) Catholic institutions will not have an exception claim under statutory or common law.
4) Therefore, Catholic institutions will be required to provide those services.
I thing this is one of the reasons she’s keeping the details extremely vague.
Let me clarify my first part, Matt:
How can one argue using a Catholic basis for legislation with a directly redistributive effect, knowing that there are people affected who disagree, and that if they disagree and withhold their taxes, they will be hauled into court, fined, etc.
Jonathan – I confess I’m not sure what case you’re making concerning taxes and redistribution. I mean, the same could be said about *any* government expenditure with which I disagree – e.g., I don’t like the Iraq War or oppose space exploration or whatever…if I with-hold taxes based on *those* disagreements, I’ll be hauled into court, fined, etc…
Matt,
This is very true. However, I do not think that charity can be forced – otherwise it ceases to be charity. If, on the other hand, progressive-taxation based insurance isn’t based on principles growing out of charity, what is it?
Charity can’t be forced – true enough, Jonathan. But can’t it be enabled or helped through government action, particularly in a democracy?
Or, what prevents anyone from paying taxes for healthcare (however grudgingly) , but then also performing corporal works of mercy for the sick, by, for example, volunteering at a local hospice? I don’t think we’re dealing with a zero-sum situation here…
Matt,
I found this article helpful for thinking about the nature of government, maybe you will too : http://www.lewrockwell.com/orig4/schall1.html
It is directly related to this conversation here.
As a sidenote: I think in an interesting policy idea is voluntary taxation. That is, let wealthy individuals (Hollywood et al, who complain about not paying enough in taxes), let them be able to give their money to the government directly. Allow them to pay more taxes. That would be charity!
Zach – read it, found it…um, I’ll be nice…not terribly informative. Reminded me somehow of this quote:
The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.
- John Kenneth Galbraith
One can’t really conclude an arguement based on predictions of the future, until the future arrives. But given that the Clinton plan uses FEHBP as a model and FEHBP prohibits abortion coverage, I think those who say universal health care leads to abortion have the harder case to make than those who do not.
The whole idea that “every tax dollar is theft” is simply not part of Catholic social teaching. One can find CST hopelessly wrong on this issue, but you really can’t argue that the Church accepts the immorality of taxation.
I don’t think public health care is about charity. I suppose I could make an argument that the freeway system is about charity, if necessary, if people are going to maintain that public health care is charity and charity can’t be forced. Are parks systems charity? I live in a community that even has a city owned electrical company. Alas, they don’t produce their own electricity anymore. We still have one of the cheapest (if not the cheapest) rates in the State.
Well, you see what you want to I suppose.
I take offense at the suggest that persons who don’t find any evidence for the efficacy of government in providing social services are somehow selfish.
Jonathan, I think you confuse what is actually the common good with charity. We don’t necessarily think the rich should have to pay for the poor because we want to force charity on others. You are right that charity cannot be forced. But if the state legislated that parents could not starve their children to death, you would not say it’s charity. You would say it’s respecting the rights and dignity of the children and the parents’ obligation to them. Similarly, providing for basic health care through the state respects the basic rights and dignity of all human beings, even those who cannot afford it.
This is an intersting discussion. A couple of thoughts:
1. Ignoring questions of efficiency for a moment, is the idea of the government providing healthcare at all improper in itself? It is clearly improper for government to assume the task of raising the children in a community, except in situations where there is no other alternative (orphans, abuse). Is there an analagous situation regarding healthcare?
2. I have seen no mention of the effects of frivolous lawsuits on liability insurance, or the rampant problem of non-paying emergency room users, which has closed several emergency rooms in Southern California. These ought to be taken into account when evaluating the current system and possible replacement models.
3. While I can understand an aversion to the profit motive in healthcare (which should be discussed at greater length), there has been no mention here, nor have I heard it stressed anywhere else, of the necessity of individuals paying for health care. In almost all popular discussions of government provided healthcare, rarely does anyone disabuse people of the myth of free healthcare. as we all know, it is not free, but more importantly, it shouldn’t be! One of the problems of someone else ostensibly paying for something, is that an assumption is created that it ought to be free. Just because healthcare is an essential does not mean that those who provide it should not be paid for their time, effort, expertise and guidance. The myth of free healthcare encourages unfounded feelings of entitlement.
4. Kurt’s comments about the current basis of the Clinton healthcare plan not covering abortions does not exactly inspire confidence. While predictions can’t tell the future, a person’s character can suggest that certain eventualities are more likely than others. I find it slightly ludicrous to think that Hilary Clinton will not strenuously attempt to get ceverage for abortions. Moreover, what about the effects on deliveries? Is it possible that coverage will not be extended to an eighth or ninth child? What sort of limits will be established for various services? I think that the failure to grapple with these details is very shortsighted.
5. Taxes are part of living in society. That should be obvious. But from there, the questions multiply quickly. The current tax system is crippling for many families, even those with healthy members who do not struggle with expensive medical bills. It is not just to damage the livelihood of households in order to establish a government health care system. Any plan must acknowledge this in order to be considered just (in my opinion).
6. It may be a tired argument, but that doesn’t make it untrue; what about the systemic problems present in most other government run programs? You cannot have low cost, universal access, and efficient service at the same time. Maybe it is the case that greater access is worth lower efficiency. But to claim that we can have both, while paying next to nothing is simply false. And of course, it won’t cost nest to nothing in the end.
To address Pete’s points:
(1) The issue is not so much the government providing health care so much as acting as an insurer for a large risk pool, and setting the ground rules for private insurers. In the best single payer system, doctors work for themselves– they just get reimbursed by the government instead of private companies. But Hillary is not proposing single payer, so even the insurance system will be largely private. Nobody is talking about government-run hospitals.
(2a) It is an issue blown out of all proportion. Tom Baker in “The Medica Malpratice Myth” addressed the issue of frivalous law suits and the effect on health care costs. Taking into consideration legal fees, insurance costs, and payouts, he shows that this amounts to half of one percent of health care costs. Not even worth bothering about.
(2b) ERs: this is a pet peeve of mine. Because of the lack of insurance in the US and the extensive rationing by cost, people got to the ER for treatment. This is exactly the opposite of a good health care system which would rely on primary care. Indeed, I would argue that a personal relationship between patient and family doctor is an essential component of health care in Catholic social teaching. But the incentives are all wrong, as specialists make 300 percent more than primary care phsyicians (in Europe, the premium is 30 percent). It just shows that no health care is free. If people can’t afford insurance, their only choice is the ER– which puts financial pressure on hospitals as well as being really inefficient in terms of providing care.
(3) You are right, there is no free health care. Clinton’s system involves everybody paying for their own insurance–it’s just that there is a level playing field and insurance companies cannot discriminate. And some point to rising taxes- sure, but the huge premia are already implicit taxes on workers and employers.
(4) I think the abortion issue is a red herring. If you think Clinton is going to use health care to force abortion down people’s throats, I think you underestimate her political savvy. She’s treading very carefully here (for instance, she doesn’t insist thta small businesses pay for their employees’ health care). She’s not going to jeopardize it my doing something stupid. THe coverage of abortion will be no different than now, because the system will not change– except for the rules governing insurance, that;s all.
(5) As I said, many families are struggling because of health care costs. I’m pretty sure the lower and middle income groups would not lose out under this plan.
(6) I talked a lot about this before, but here are the facts: the US pays a lot more for a lot less (in terms of outcomes). Only in single payer systems that try to do things on the cheap do you find rationing (e.g UK). Most studies show that rationing is extensive in the US, and it takes longer to see a doctor than in European countries. The problem is that opponents of reform pick up on anecdotes. They note that rich Canadians come to the US for health care, not noting that poor Americans cannot move northwards so easily. They pick on a few iconic elements (hip replacements in Canada loom large for some reason) as evidence that the whole system stinks. But it;s not true. Even the worst single payers systems have better outcomes than the US.
In reply to Pete:
1) No more improper than a private association providing health care to its members. This isn’t so much an issue of forcing people into a collective system as much as determining the organization and the administration of the collective system.
2) Malpractice awards, frivolous or otherwise acount for under 2% of expenditures. This is why they aren’t discussed. Non-paying emergency room users is certainly an issue. I believe it to be more of an accounting issue than anything else.
3) Do parks likewise give a feeling of entitlement? Regardless there are two more important questions:
a) Is there a public benefit provided?
b) Are the costs apportioned justly?
Those are not simple answers. I find dubious the assumption that people opt for more hip replacements because they are not directly expensed. I find equally dubious the assumption that my son is breaking the system by taking multiple trips down the slide. There are natural limits to how many times my son will go down the slide even if it is free, and there are limits to how often people will use health care services. More specifically, for all the concern about waste and graft there is a corresponding concern about needed care not being provided. Personal responsibility will aid in reducing waste, but it will also reduce needed care. In many cases this can be a greater public burden in the future.
4) It is of course possible that government will act injustly. Presently, having a child is a financially significant event. Due to our needs as a family, we may not reach that 8th or 9th child to which you allude. We may not even reach a 6th. Given the choice between thousands of dollars per child presently and only having my first 7 children’s deliveries covered, I would choose the latter. Your mileage will vary.
5) Our present tax system isn’t particularly crippling. It just isn’t. I think it is over 25% of families presently pay no federal income tax.
6) I would remove government run as a qualifier. Show me a low cost, universally accessible, and efficient, and I’ll add quality, anything. There are tradeoffs with anything. Having been under public and private electric systems, I can tell you that I see no discernable difference between them, other than the public one is a little cheaper.
I for one can not wait until we have a Government Run Plan. Having been in the military for several years I can tell you how wonderful it was being in a government run health system – especially since the doctors were so happy that they were immune from malpractice suits – quality of care was so much better. Maybe someday all American’s will get the same quality of care that military members receive at Walter Reed.
“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.
- John Kenneth Galbraith”
Mr. Galbraith was always much better at quips than at being an economist. I rather like this quip of his:
“It is a well known and very important fact that America’s founding fathers did not like taxation without representation. It is a lesser known and equally important fact that they did not much like taxation with representation.”
M.Z. and M.M.
Thanks for your responses. Regaring #2 about lawsuits, I’m in no position to directly question both of your assertions regarding the percentage of expenditures, but two things come to mind: I’m not so concerned with the amount that plaintiffs get from doctors/hospitals. I’m concerned with the effect those lawsuits have on doctor’s liability insurance, which most definitely does have effects on cost and availability. I’ve read in several places about severe shortages in in obstreticians because their liability costs have gotten out of control.
M.Z., regarding entitlement, you need a better analogy than a park. A park is not quite as fundamental as healthcare in the hierarchy of needs. But to answer your question, yes a park could engender unfounded feelings of entitlement. If you pay taxes and your community builds a park, then you are entitled to use it. So feelings of entitlement are not unfounded in this case. If, however, you don’t pay taxes and you feel that using the park is your right, well then those feelings are unfounded. You may have a legal right to use the park but you have not done anything to create or maintain it, and if you have been given a right to use it, you have that right precisely because it has been given, and not because of any merit or intrinsic deserving on your part.
When I get healthcare because it is part of my compensation package at work, AND I pay a couple hundred bucks a month, then those feelings of entitlement are not unfounded either, although I may have no idea what the actual cost of the services I want are. If, however, my healthcare is paid for by somebody else, then those feelings of entitlement (if any) ARE unfounded. Again, this only speaks to generation of unfounded feelings of entitlement. It doesn’t necessarily bear on Hilary’s actual proposal.
You mentioned your son on the slide, so let’s talk about that. First, the natural limits of sliding simply have no bearing on healthcare. Once a slide has been built for, say, $100, your son utilizing the slide, even at the maximum natural limit, does not increase costs anywhere. In contrast, someone utilizing a health service to maximum natural limit is absolutely incurring costs. So, in that use, the example fails.
Regarding #4, it doesn’t matter to me how many kids you have. The point is that if you decide to have large, or very large family, and the government is your insurer, then they ultimately decide what is covered, and it is within the realm of possibility in our current social milieu that you may not be effectively covered. Besides deliveries, what high-risk pregnancies? I realize this is all conditional, but I see no reason why anyone should trust the government to make coverage decisions, especially regarding life issues.
Regarding #5, M.Z., perhaps crippling is too strong a word. I would hope that we never get to the point of truly crippling taxes for the majority of taxpayers. It should be noted though that 97% of households that pay no income tax make below $40,000 a year (http://www.taxfoundation.org/news/show/1111.html). If you are living on either of the coasts with 2 or 3 kids, then you are likely pinched pretty tight even without any taxes. So, if they did pay any taxes they would likely qualify as crippling. My ultimate point is that there is hardly an untapped fountain of wealth from which to fund government run/regulated/mandated/provided healthcare.
Regarding #6, M.M. When you say that we get a lot less for a lot more in the U.S., I just have to take your word for it. You say outcomes, but I have know idea what that means. You are correct about the battling anecdotes. For every six month wait for cancer treatment in Canada, there is an uninsured cancer victim in the U.S. I’m certainly not enamored of our system, but even in this discussion with well-meaning and knowledgeable people, no one seems willing to put forth the possible trade-offs in a government-regulated system. M.Z. you acknowledge the trade-off principle, but don’t suggest what they may be. I’m curious to hear waht everyone would be willing to to without or to pay in taxes to make something like Hilary’s plan a reality. Thanks again for your responces.