Friday, February 22, 2008

Will we ever have national health insurance?

I'll start off, as I often do, by nicking from my fellow bloggers. Posolxstvo has a fine post up at his place where he voices his concerns about national health insurance:

Now, Michael Moore makes a lot of sense as he talks about what we should be doing and all the programs we should have and so on. In a way, I am an extreme social liberal, as I really do believe that our society has an obligation to itself to keep us all afloat. But I am pragmatic as well, and I kept listening to him and wondering "Great idea. Who's going to pay for that?"

On a philosophical level, I've never thought that paying for national health insurance should be that much of a concern. Thomas Jefferson said all those things about the inalienable right to life, liberty, and the pursuit of happiness that the Founders signed on to, It's always seemed to me that the right to life implies a right to health, otherwise the right to life isn't worth much. A decent society should be able to figure out how to pay for national health care with a minimum of complaint.

Things always work differently in America, though, and in the case of health care, one must factor in the role the insurance companies play in our economy. Insurance companies are a lot like banks in that they take your premiums and invest them in new subdivisions, office parks, and strip malls just like the bank does with your deposits. Without help from an insurance company, Sam Walton would never have become the richest man in the world, as he explained in his autobiography:

Somehow we had a contact at another insurance company, MassMutual, so we went to see them. They agreed to lend us a million dollars, and in turn, we agreed to give them our right arm and left leg. we didn't just pay interest, we had to give them all sorts of stock options in case we did go public. By now they had us over a barrel. I had no choice: we had to have the money. When we went public they made millions and millions on the deal.

My preferred approach to the health insurance problem would be the Medicare For All proposal suggested by Senator Ted Kennedy and others in Congress. The structure of the program is already in place; you just expand Medicare to cover everybody, and the money to pay for it would come from the money currently paid to private insurers for health coverage. Instead of paying Blue Cross/Blue Shield, I'd pay Uncle Sam. Except that as shown above, depriving insurance companies of significant revenues could well lead to serious economic problems, so others seek ways of providing health insurance to everybody while leaving the current private insurance structure more-or-less intact.

This brings us to Jacob Hacker. Hacker has been studying health care issues for years, and has recently unveiled his Health Care For America proposal. Hacker proposes to leave the current employer-based system more-or-less intact for 2/3 of Americans, while devising an insurance pool similar to Medicare to cover those not covered by employer-provided insurance. He claims his proposal will save America $1 trillion over a ten-year period. Some highlights:

Employers would offer health coverage at least as good as Health Care for America, or pay 6 percent of payroll into a national pool to cover their employees.

Individuals would automatically be enrolled, either at their place of work or when they seek care, with a guarantee of coverage from birth until they go on Medicare. Premiums would be capped, with generous subsidies for lower-income families.

The federal government would use the buying power of the large national pool to negotiate lower costs by providers and drug companies.

Hillary Clinton and Barack Obama include elements similar to these in their own health care proposals. The biggest difference between Clinton and Obama at this point is that Clinton's plan requires everybody to have insurance, while Obama's does not. I'll rely on Paul Krugman's excellent analysis, seeing as how this post is getting long enough: estimates say that a plan resembling Mrs. Clinton’s would cover almost twice as many of those now uninsured as a plan resembling Mr. Obama’s — at only slightly higher cost.

Let’s talk about how the plans compare.

Both plans require that private insurers offer policies to everyone, regardless of medical history. Both also allow people to buy into government-offered insurance instead.

And both plans seek to make insurance affordable to lower-income Americans. The Clinton plan is, however, more explicit about affordability, promising to limit insurance costs as a percentage of family income. And it also seems to include more funds for subsidies.

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

Every other developed nation on this planet finds a way to provide health insurance to all of its citizens. It is downright criminal that the United States cannot find a way to do the same. I'd prefer to see a government-administered program - it seems to me that it would be cheaper and simpler than hybrid public-private proposals. Such a program probably isn't feasible in America, though, so we shouldn't lose sight of the idea that no matter how health insurance is delivered, it should be available, affordable, and provide decent coverage for all of us.