Tuesday, September 08, 2009

Regarding Hillary's 2008 plan, and individual mandates

OK Buzzcook, I read the lengthy(4,000+ wd) post you referred to in the comments,
"An analysis of Clinton's [2008]Health Plan Proposal"

Robert Laszewski talks about how H. Clinton's 2008 healthcare plan(hereafter I'll just call it HRC-08)says that there will be a public option allowing regular people to buy a plan that's the equivalent of the "Federal Employee Health Benefit Program", something a lot of pols talk about.

Yes, the healthcare plan for federal employees is pretty good, but SO WHAT? If you've ever actually looked at buying health insurance on your own, you'd see that the major companies don't offer a one-size-fits-all plan for everybody, but rather a pretty wide array of plans, with the economy plans offering negligible coverage with high deductibles, and the top of the line plans offering at least as much coverage at the "FEHBP" plan, sometimes more. If you're curious, go to www.ehealthinsurance.com and plug in your personal data and see what's available to you. Blue Cross and Humana, for example, offer an especially wide range of plans, but the prime ones are well out of my reach.

(incidentally, the reason I recommend you look at ehealthinsurance is because they don't ask you, as of this writing, for an email or home phone number, which many of the other online comparison services do, presumably so agents in your area can subsequently pester you. For the record I have not purchased anything from them, just window-shopped.)

Laszewski also discusses the HRC-08 approach to individual mandates,

"Limit Premium Payments to a Percentage of Income: The refundable tax credit will be designed to prevent premiums from exceeding a percentage of family income, while maintaining consumer price consciousness in choosing health plans."

OK, the devil in her plan finally shows itself. Tax credits are all well and good, but what if they're not enough to purchase decent coverage? Then you have to purchase sub-standard coverage(I guess that's where "consumer price consciousness in choosing health plans" comes in.)

I'm a male in my 40s, and from what I've looked at, it would cost me at least 250/month to purchase meaningful coverage, as opposed to plans with 3,000/yr or 5,000/yr deductibles* that don't cover dr's visits until the deductible is satisfied, which are often more "reasonable."

Except they're not. The canard that individual mandate proponents often trot out is that individual mandates will force healthy people to buy coverage when they're well, and quit gaming the system by waiting until they're sick, implicitly suggesting that is what the bulk of the nation's 45 million plus uninsured are doing.

I don't believe that for a moment. If I had a spare 250 dollars a month I would buy a policy, but I'm really poor. I'll wager that most people who don't have health insurance just can't afford it, and some have looked at the bargain-basement policies and figured out they're essentially worthless. And of course some had insurance and were bumped by their insurance companies, and can't find anybody who'll cover them, except at exorbitant rates.

Let's say you are a cashier or a short-order cook, earning 8.50 or 9 bucks an hour. (Let's also assume you have no dependents and no pre-existing conditions.)

Sure, maybe you could, with some difficulty, afford to enroll in a plan that only costs 80 or 90 bucks a month, assuming you can stay healthy and don't actually need that 80 or 90 bucks that month, should you actually need to see a doctor and buy some medication, something the economy plans generally wont help you with, or will only help you a spitting-in-your-poor-face, token amount.

Let's see. You're paying 80 bucks a month, 960 dollars a year, the doctor charges 80 bucks for a visit, and the 80 bucks a month plan reduces your out-of-pocket expense to 45 bucks? Wow! But you don't have 125 bucks to spare on healthcare for the month, not if you want food, and some electricity? You're a bum.

And since you're making, say,18,000 dollars/yr, that 960 bucks a year is still too little to deduct off your income tax, because even if it's more than 7.5% of your taxable income, you still don't make enough to be able to itemize.

My point, buzzcook, is that plans with individual mandates are eminently gameable-- they're designed so the politicians can take credit for dramatically reducing the number of uninsured folks while forcing a large segment of society to buy junk policies, by defunding vouchers so they only pay for worthless coverage, or by making eligibilty for tax credits that phases out below a certain point, in the same way that making something tax-deductible means only people who make enough money to itemize may benefit.

Do I know HRC created a plan with this aspect designed to be a deliberate gimmick? No, but I don't have to. It's not about her, any more than it's about Obama now that he's president. It isn't even about the democrats. It's a systemic vulnerability that's built into individual mandates and that's why it's foul public policy, period. I'm sure you've heard of unfunded mandates in other contexts.

They won't call it cutting the plan off at its knees;

they'll call it "reaching a bipartisan solution" or

"allowing the private sector breathing room to innovate"

and when a New York Times story about some Duke or University of Michigan study questioning the effectiveness of individual mandates comes out 3 or 4 years later, it will studiously avoid connecting the dots, to prove that the democrats deliberately created legislation to "allow" themselves to be played by the other guys, as they both wink at each other from across the aisle.

That's why I think my criticism of HRC-08(and BHO-09) is legitimate.

Later this week I'll post about my thought on how to fix healthcare. Maybe my ideas will be just as flawed, just differently flawed. We'll see.

(*I've even seen some companies offer 7,500/yr deductible plans, although they're still rare.)

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At September 08, 2009 7:51 PM, Blogger Charles F. Oxtrot said...

Good response, Jonathan.

I liked this observation:

I'll wager that most people who don't have health insurance just can't afford it, and some have looked at the bargain-basement policies and figured out they're essentially worthless. And of course some had insurance and were bumped by their insurance companies, and can't find anybody who'll cover them, except at exorbitant rates.

I haven't had health insurance since 2005. The coverage I had then was ridiculously expensive and pretty much illusory. I ended up suing the carrier (BC/BS) to no avail when a good chunk of my expenses were denied coverage.

The game of insurance is very simple.

1) Take in money.
2) Refuse to pay claims.
3) Pocket the profits.

Where insurers will be willing to be flexible is on (1) or (2). The less money they take in for a policy, the fewer claims they'll pay. If they are able to get you to pay big $$$ on a policy, you'll get more claims covered.

They're definitely not going to agree to price things cheaper while giving MORE coverage.

The idea of expanding Medicaid to everyone sounds appealing, until you talk to people who use Medicaid as their primary funding for health care. Nobody I know who is a Medicaid recipient thinks it's a good plan. On top of that, it's bureaucratic which means it's really wasteful, fiscally speaking.

Buzzcook sounds like someone who is enamored with Hillary Clinton, or perhaps someone who merely doesn't understand how insurance and health care work in America. Sounds like a bunch of talking points offered by Hillary's campaign, rather than reality.

But maybe Buzzcook will respond with some substance.

At September 09, 2009 7:27 AM, Blogger Mimi said...

I'm not sure if Mr. Oxtrot meant Medicare when he referred to "Medicaid," but if he did, I must disagree. My late husband had many maladies that would have literally bankrupted us if we had to cover his medical expenses. However, Medicare paid 80% of them and his supplemetal insurance (AARP) paid the remaining 20%. True, AARP for him alone (I have my own supplemental) cost $2500 a year, in addition to the charge for Medicare, but we were able to keep our heads above water. Together, our medical expenses--insurance, medications, etc.--cost us $12,000 a year--bad enough, but doable.
We were satisfied with Medicare and I'd like to see the single payer option extended to others.

At September 09, 2009 7:41 AM, Blogger Charles F. Oxtrot said...

I meant both, actually, Mimi. I'm glad it worked out for you but I don't know anyone personally who has had such an experience.

I still have massive problems with the wastefulness of the bureaucracy. Remember, I have a lot of experience in the insurance world, and I know where the waste is in the private and bureaucratic public sectors. I don't think anything is fixed by compounding waste. Such fixes are akin to the "bailouts" we've been watching over the past 9 months.

You can either think a short-term "fix" is good, or you can plan for the long-term and assess short-term "fixes" on that schedule. My preference for improving life for Americans is to go long-term, because I don't see the benefit in having one's children, or their children, be taunted by false improvements seen as kids that aren't realized as adults.

When times are tough it is hard to look long-term. It takes courage, and a good bit of asceticism, to be willing to forego a short-term benefit. I like what Christopher Lasch wrote on this subject while he was alive. He was fond of saying that one of America's chief problems is that it behaves, socially as a nation, like a spoiled child, and wants everything now with very little sacrifice. I agree completely.

Making sacrifices isn't so hard, especially when a lot of Americans consider as "needs" what actually are mere wants. We should compare ourselves to 3d world countries when we get grasping and expectant.

At September 09, 2009 1:39 PM, Blogger rob payne said...

I have to agree with Mimi here. Cynthia McKinney wrote about the idea of extending Medicare to everyone and it was pretty compelling to me. McKinney pointed out how it would create up to roughly six million new jobs roughly equivalent to the same number of Americans now unemployed.

At September 09, 2009 7:24 PM, Blogger Bob In Pacifica said...

I am a federal retiree and have been covered under the plan for decades. I'm under Kaiser, an HMO if you're not familiar. It's been affordable and the care is good. It costs me about $150 a month. I pay fifteen bucks a visit. No additional charge if I'm hospitalized.

Now part of the reason why my costs are so reasonable is because my union has negotiated what the USPS gives.

In my experience I have found that generally Kaiser is a good model for healthcare. Ultimately, a single-payer like Medicare needs to be expanded to all.

At September 09, 2009 8:55 PM, Blogger Jonathan Versen said...

Hi Bob. And of course Kaiser Permanente is a private non-profit healthcare company.

Incidentally, speaking of Kaiser, the Kaiser foundation has this from fall of 2008 called "The Uninsured: A primer"[PDF link] which offers some solid stats backing up my assertion that most uninsured persons don't carry insurance because they can't afford it, and not because they just want to wait until they're sick.

At September 10, 2009 10:19 AM, Blogger Charles F. Oxtrot said...

I would hope that each commenter here recognizes the difference between staking out a position of skepticism in order to note the problems within a system, and an understanding of what works practically, and what is likely.

Nothing wrong with giving people more than they have presently, health-care wise. My concern simply is that people should not be eager to accept problems when there are ways to avoid those problems. If the only purpose in having discussions on these vexing issues is to create an echo chamber of "I agree, I agree, I agree" then really, there's no point in the discussion.

If all one wants is to know one's not alone in feeling misery at the current state of American profiteering in the health care sector, all discussion can be reduced to a simple poll:

Do you agree that the current American health care system has problems?

And then we can proceed to divide ourselves according to the Yes or No responses given. Great. Now we've created opposing teams. Great. And that has achieved what, exactly?


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