Health Care Reform

As others have pointed out, this is pretty good blog exchange on health care reform, better than most of the miserably low quality commentary out there.  Andrew Samwick, a well respected non-health economist, writes on his blog:

I broke in a new plasma television on the President's speech this evening, so I couldn't help but think that he looked and sounded great.  The line that jumped out at me was, "there is agreement in this chamber on about eighty percent of what needs to be done."  If that is really the case, then why not pass the legislation that specified exactly that eighty percent?  Everyone could declare victory and go home.  What is in the other twenty percent that is essential to the President but on which there is not broad agreement in Congress?

A comment on the blog reads:

there are real reasons why we can't just do the 80% that people are willing to agree upon... because policy choices interact with one another... 80% of the choices are the easy stuff, but in order for the 80% to work, we need to make hard choices on the remaining 20% that will ensure the policy as a whole does not fall apart...

for example, part of the 80% that we can agree on is that insurance companies should not be able to discriminate against pre-existing conditions... we've all heard the horror stories of people who are sick, but can't afford healthcare or insurance because no insurance company will take them on... it's easy to say that they should not discriminate against pre-existing conditions...

however, if we make that condition, we also must have an individual mandate to buy insurance! why? because without such a mandate, we would all just not pay for health insurance at all until we happen to get really sick or injured, and then we quickly purchase insurance to cover our illness/injury... then exit the insurance after all major healthcare has been paid for...

and then, if we have an individual mandate, we must provide subsidies so that low and middle-class families can actually afford their health insurance (or provide, in extreme cases, a hardship exception)... current proposals provide subsidies up to 300 or 400 percent of poverty levels... because you can't mandate families pay for health insurance if they have a hard enough time paying for most of the other stuff they have to just to live...

ultimately, if we want to make america healthier and overcome a system that's incentivized to discriminate against old people or people with pre-existing conditions and that leaves up to 50 million people in america without health insurance (and that number growing daily)... we have to not only do the easy things, but the hard choices as well...

this is why the healthcare debate is difficult... we all want america to be healthier, people to have access to healthcare, and to try to curb costs... but in order to fix the obvious problems, we also need to make difficult choices that may "grow" government or require more "spending"... this is what, generally speaking, healthcare reform is trying to do...

but opponents of healthcare reform either ignore the difficult questions that arise or pretend that there is nothing wrong with the current system as is... they want to fix healthcare without any "growth" of government or additional "spending"... it can't be done... or at least any legitimately workable proposals have not been made... the opponents just scream of bigger government and spending and death panels and government bureaucracies, without an alternative proposal to fix the gigantic problems staring us in the face...

I'm not for mandated insurance, I'm for a (very low frills) public option funded by payroll taxes.  So yes, the dreaded 'tax' word.  Since it works much better than a mandate.  Want more care?  Buy non-mandated supplemental insurance.  And if you think European health care payroll taxes are progressive, look again, the current income cap in Germany is Euro 44,100 per year (i.e. if you earn more you don't pay more health care payroll tax).  The progressive part is that low income people get decent but non-fancy health care paid for by the middle class.