by Jack Zwald –
by Jack Zwald – What has been downplayed in the debate over the cost of healthcare and lost in the endless proposals is how this gap in coverage, that more and more young people are experiencing, is going to get patched up. President Obama’s plan articulated during the election campaign included provisions that kept children on their parent’s plan until age 25 and bolstered that with a robust public option. Those policies combined would do much to provide medical services to the young uninsured.
Mr. Horse’s fears represent a general feeling that if we get hurt our insurance will fail to pick up the cost. Why bother paying climbing insurance premiums when there is absolutely no guarantee that you’ll ever receive the help when you need it? A public option will help keep private insurers honest and motivate them to keep their promises. Unless more competition is injected into the market insurance companies can continue to take advantage of us all.
The cost is another factor that keeps the people of all ages, and especially young people, uninsured. President Obama’s public option will increase competition both driving down the cost of healthcare and improving the quality of service provided by insurance companies, but even then some young people may not be able to afford insurance. One solution is to raise the cutoff age that dependents and children can already be covered under their parents’ insurance plans.
The advantage of extending the health insurance coverage provided under an existing family plan is that the cost of health insurance is not passed onto low-income recent graduates from college or recent entries into the work force and treatments and medication for medical conditions stay covered. In New Jersey children can be covered by their parents’ health insurance until age 30, but that seems a bit much if you ask me. By extending coverage the number of uninsured young people will decrease overnight. Working with their families they can also achieve a much better insurance plan than they could likely on their own.
As Congress takes a break this August I am afraid that we may not see any real reform and that this rare opportunity for movement on this issue will be crushed by its opponents. The polling data is sliding and Republicans will have more time to do what they have done best over the past eight years, spread fear. If the Right is successful the best we have to hope for is a watered down compromise that does little more than secure 2010 reelection prospects and continue to leave millions without adequate care.
I remain optimistic however, that most Americans have already realized the time for a government health option has come. With their support President and Congressional Democrats will be able to pierce the reactionary fear and achieve the passage of a solid reform plan that protects the weakest in our society and ensures a prosperous future. After August ends and Congress goes back into session we’ll see how it ends, but I have a feeling some positive improvements to the system will be made.
No solution is complete without addressing the fastest rising demographic of uninsured citizens, 18-29 year olds. The best way for the government to ensure quality healthcare for its youth is clear: A solid public option to clean up the market and provide another affordable choice for young consumers coupled with an extension of the age that children are allowed to be covered under their parents’ current policy.
Jack Zwald is a Junior International Relations major, Chinese minor at the University of California, Davis. He currently serves in the Senate of the Associated Students and as the Political Director for Davis College Democrats. He’s always looking for feedback, feel free to shoot him an email at jozwald@ucdavis.edu about the column or anything in general. Egghead is a weekly column for the Vanguard.
One thing that Mr. Wald doesn’t address in this piece is where the $ comes from to pay for this. The startup costs (that is just the $ to get it off the ground) are projected to be 1.2 trillion. That is almost an entire years budget! We are already 1 trillion in the hole! Where does Obama think the $ is going to come from to pay for this? does he plan to pull dollar bills out of his own butt?!!
Mr. Horse’s fears represent a general feeling that if we get hurt our insurance will fail to pick up the cost. Why bother paying climbing insurance premiums when there is absolutely no guarantee that you’ll ever receive the help when you need it? A public option will help keep private insurers honest and motivate them to keep their promises.
how so? the public option is going to be very expensive. The govt. will have to shell out cash just like a private company, so the incentive for the govt not to provide the coverage over illnesses is there the same as it is for a private company.
Unless more competition is injected into the market insurance companies can continue to take advantage of us all.
Obama is not being honest. he knows he doesn’t know how to pay for this, so it is not a workable plan. but to save face on his campaign pledge, he insists on going through this.
the problem is not that people lack health insurance, it is people are losing their jobs right now.
Govt. takeovers of health care is not going to achieve this.
The polling data is sliding and Republicans will have more time to do what they have done best over the past eight years, spread fear. If the Right is successful the best we have to hope for is a watered down compromise that does little more than secure 2010 reelection prospects and continue to leave millions without adequate care.
as if the democrats don’t spread fear. What do you call global warming? Scaring people into not driving their own cars with exaggerated claims of armegeddon. There are other organizations that follow this pattern. They are called cults.
“A public option will help keep private insurers honest and motivate them to keep their promises. Unless more competition is injected into the market insurance companies can continue to take advantage of us all.”
Be careful what you wish for. Massachusetts tried a similar plan to Obama’s – and it failed abysmally. The cost of healthcare went up, the cost of health insurance went up, wait times for health care increased, and THE STATE ENDED UP IN THE RED TO SUCH AN EXTENT, IT ASKED FOR A FEDERAL BAILOUT!
I don’t disagree that the current private health insurance system has problems with it, and needs to be tweaked extensively to accommodate those who are not covered for one, and those whose insurance is inadequate for two. But my fear is that we as a nation rush to institute a program that ends up not doing what was intended, yet costs us a fortune but fails to solve the existing problems.
What are the costs now? What is the cost to business and government to have to provide workers with private health plans? What is the cost in lost productivity for uninsured? How much do we have to pay due to the fact that some people do not get preventative care? Everyone talks about the costs of the program as though they were set negative costs and no one talks about it in terms of the entire system.
“What are the costs now? What is the cost to business and government to have to provide workers with private health plans? What is the cost in lost productivity for uninsured? How much do we have to pay due to the fact that some people do not get preventative care? Everyone talks about the costs of the program as though they were set negative costs and no one talks about it in terms of the entire system.”
But what if the track record of the type of system Obama is talking about has been an abysmal failure, and made things worse not better? Still want to implement it?
Can you please answer my question first?
46 million Americans are uninsured. Thus the current system is an abysmal failure.
“Medical problems caused 62% of all personal bankruptcies filed in the U.S. in 2007, according to a study by Harvard researchers. And in a finding that surprised even the researchers, 78% of those filers had medical insurance at the start of their illness, including 60.3% who had private coverage….”
[url]http://www.businessweek.com/bwdaily/dnflash/content/jun2009/db2009064_666715.htm[/url]
Thus the current system is an abysmal failure.
“Health-insurance premiums for single workers rose 74% for small businesses from 2001 to 2008, the latest year data are available, according to nonprofit research group Kaiser Family Foundation….A Hewitt Associates survey found that 19% of all companies plan to stop providing health-care benefits in the next three to five years.”
[url]http://online.wsj.com/article/SB124329442612051953.html[/url]
Thus, the current system is an abysmal failure.
That’s pretty much the starting point in this discussion.
Don, I very much appreciate those stats. But it seems to me that the conservative’s first response is cost. At the same time, it seems like we are spending a lot for this existing system just in less noticeable ways. How much do businesses have to pay out for health insurance for their employees? How much less do employees receive in salary because their employers have to pay for health insurance?
The bottom line is whether there is a way to produce a system that provides those 46 million uninsured Americans, while lowering overall costs, at the same time not lowering the quality of care for those lucky enough to get care in this current system?
What are the costs now? What is the cost to business and government to have to provide workers with private health plans? What is the cost in lost productivity for uninsured? How much do we have to pay due to the fact that some people do not get preventative care? Everyone talks about the costs of the program as though they were set negative costs and no one talks about it in terms of the entire system.
do you really think that everything you stated is going to offset the 1.2 trillion in startup costs for this program? like I said, 1.2 trillion is an entire years budget. People are getting laid off, so there will be less $ coming to the treasury, not more. how do people out of work pay tax $ to finance this?
also, because the program is just getting started, people will have to deal with all of the costs you just mentioned in addition to this 1.2 trillion to begin with. The projected “savings” (assuming they are savings which is a huge if) are probably not going to be seen for years, but people are being laid off right now.
I have as yet to hear the white house explain how to pay for this. This is precisely why the white house shouldn’t be tinkering with health care. They should take time out to think out the plan beforehand, not simply implement it, then deal with the crisis when it hits.
“…the 1.2 trillion in startup costs for this program…”
$1.2 trillion is not the startup cost. It (ranging from $1 – 1.5 trillion) is the estimated cost over ten years.
18-29 year olds are the most inexpensive to insure. Many that have low cost insurance available don’t even go to the trouble to sign up for it. Young people that do not have a job, have limited assets, and can demonstrate economic need, will be eligible for Medicaid. Lastly, parents can purchase low cost individual policies for kids without serious pre-existing conditions. Is this really that big of a problem?
About 90% of Americans report that they are satisfied with their healthcare other than the cost. ALmost 80% are satisfied even considering the cost. For the 47 million that do not have health insurance, less that 10 million will likely be “saved” by the Democrat’s plan. This gets us very close to the Pareto Principle (the last 10% of improvement will bear 90% of the costs). Obama and his Democrat-Socialist ideologues want us to believe there is a crisis and therefore force is to adopt a drastic move from private to public healthcare. We cannot afford it and we do not need it.
There are only two real problems with US healthcare: high cost and limits on accessibility for those with health problems. To reduce costs we need to place more limits on malpractice awards and allow defendants to recover costs from plaintiff attorneys for failed cases. We need to allow insurance companies to compete in any state. We need tax incentives to encourage substantially more high-deductible Health Saving Accounts as these have proven to reduce costs and reduce utilization as policy holders make better cost-benefit decisions. Doctors need an expensive army of administrators to deal with the paperwork mandated by copious government regulations. These costs are passed on to the consumer. We need to reduce this regulatory footprint and implement portable electronic patient record keeping. Basically, we need to foster greater efficiency, greater competition and greatly improved consumer cost-benefit incentives. We need to focus government actions on the advancement and protection of these things, and not throw the proverbial baby out with the bath water for political purpose.
To help with accessibility, we do need new regulations to disallow insurance companies from rejecting for pre-existing conditions while also placing limits on the percentage increase they can charge. This is one area where free market principles conflict with the public good. Otherwise our problem is high cost, and the free market is ALWAYS better at reducing cost than a model of centralized control.
Jeff,
“18-29 year olds are the most inexpensive to insure… Is this really that big of a problem?”
Yes, according to a July Gallup poll people making less than $36,000 a year and 18-29 year olds are the demographic least insured. There are clear barriers to young people getting health insurance.
http://www.gallup.com/poll/121820/one-six-adults-without-health-insurance.aspx
In response to your other two claims, that we’ll qualify for Medicaid and parents can purchase our health insurance. For example, to qualify for Medi-Cal you need to either be 65+, blind, or disabled. I don’t see a lot of 18-29 year olds qualifying for those benefits.
As for parents picking up the cost, maybe in some households, but not all families can afford to pay for their adult son or daughter’s health insurance and many might choose not to. That would partially explain the number of uninsured 18-29 year olds being up at 27.6%.
I agree, disallowing insurance companies to deny coverage based on preexisting conditions is part of the solution. The problem is bigger; however, than better records keeping, malpractice, and allowing inter-state competition in the insurance market. You’re right the market is typically the best at bringing down cost, that’s why the public option will only stimulate that competition. It’s not centralized control, it’s just another choice.
Thanks for reading and giving me your feedback,
Jack
Jack,
Medi-cal will insure 18-20 year olds. Go to http://www.bcbsm.com/myblue/plan_flexibleblue_rates.shtml and note the monthly cost of the “young adult” insurance plan of $47.17 per month. This is very good coverage. There are many sub-$100 insurance plans available for individuals in this age group. Assuming we eliminate the pre-existing condition problem, this insurance is more than affordable today. With the changes I mention, it will become less expensive.
If the individual truly lacks the ability to pay these rates, and their family lacks resources to help, then they can they can apply for public assistance and make having low-income health insurance one of their priorities.
How many 21-29 year olds or their families truly cannot afford to pay $50 or $100 / month for individual health insurance (remember that families with young children qualify for medicaid)? I bet a strong percentage of these young people drive a nice car and spend much more per month on their entertainment. The fact is 27.6% of 18-29 year olds without health insurance includes a large number of people that can pay, but choose not to. For the remaining real needy folk, how about if the insurance was $25 or $20 per month? At some point don’t we just have to accept there is a cost we must each pay? Isn’t it better for consumers of a product or service to pay for it themselves rather than have the government provide it through income redistribution?
You cannot have a public “choice” and expect the miracle of greater competition. Like all public-sector services, it will end up costing much more per unit of service than the private sector can deliver (read about the US Postal Service today?). Therefore we will have to prop it up with more and more government spending. We can do that expecting a return, but CEOs of these private insurance companies are not stupid… they will not lower their rates just to match the government-subsidized program, just like mom and pop will not compete on price with Walmart. Instead these private insurance companies will provide a higher quality service and bleed the high-income folk and well-off companies, leaving the government holding all the cost for a growing number of people at the bottom. These “captive customers” on the bottom will begin to complain that their government run healthcare is lousy and unfair compared to what the rich people get. Next step is to tax the rich (capable) to provide more funding for the incapable; thereby increasing the ranks of the incapable. Hence we have a recipe for incrementally replacing very good and expensive private healthcare with lower quality and more expensive government healthcare. This is a terrible plan and it is not necessary.
Obama and the Democrats should drop the public insurance idea and instead focus on other policy changes to foster greater competition between carriers while adopting any reasonable idea for reducing the cost of delivery within the current system.
“How many 21-29 year olds or their families truly cannot afford to pay $50 or $100 / month for individual health insurance (remember that families with young children qualify for medicaid)?”
A lot.
Interesting that you mention medicaid, which is a government plan, wouldn’t it be more cost-effective to have the broader public option than to admittedly rely on the government to provide health insurance to one segment but not all segments of society?
“Interesting that you mention Medicaid, which is a government plan, wouldn’t it be more cost-effective to have the broader public option than to admittedly rely on the government to provide health insurance to one segment but not all segments of society?”
Medicaid currently costs us about 12.5% of all federal tax revenue. The Cato Institute estimates this will rise to about 22% in the next 40 years… without Obamacare.
Our challenge is the standard project trifecta of quality, scope and cost: to deliver the highest quality healthcare to as many American’s as possible at the lowest possible price. Medicaid and Obamacare focus primarily on scope – to cover as many as possible. The rhetoric of the Obama administration and Democrats hell bent on pushing the public option includes false claims of savings. The CBO and just about every respectable policy and economics think tank have concluded we are in for massive spending increases if this thing passes in anything close to its present form. The last consideration is quality. On this we only have to evaluate the typical Medicaid service with what is delivered to patients owning private healthcare. Most people would prefer private insurance, don’t you think?
So, what we have in Obamacare is a plan to increase the scope of people covered while we reduce the quality of care for the vast majority and drastically increase our deficits and tax burden to pay for it.
The public option is a stupid idea. We already have a capable delivery system in place. It works well enough for most Americans. It delivers the highest quality healthcare in the world (the reason we rank low compared to other countries is that cost and total access are heavily weighted). The difference between Europe and the US is that most of Europe never developed a capable private-market delivery system. We have it. However, we have a scope issue with the uninsured and those with pre-existing conditions, and problem with growing cost. But, healthcare at lower cost will solve much of the scope problem. So, we are going to be much better off tweaking the existing delivery system to lower costs. Government needs to set policy for pre-existing conditions, and then do anything and everything to incentivize lower costs while maintaining quality. Meanwhile we need to get more people working.
If already affordable high-deductable HSA plans can be made more affordable, then even the smallest of companies will provide them. With HSA plans, companies can deposit part or all of the out of the annual patient deducible in an interest-earning, tax-free (except in CA) account and still save significant dollars compared to a typical HMO or PPO plan. Employees that stay healthy get to keep accruing dollars in their account… to be used for any large health problem (say to cover elective surgery or to help meet out of pocket maximum for a bad health year), or to be saved for retirement. The incentive to retain this money causes employees to make better cost-benefit decisions for their healthcare and lowers utilization and cost of claims. HSA plans terrify Democrats that envision European-style socialized healthcare because it is exactly the type of thing that will help prevent it.
“We already have a capable delivery system in place. It works well enough for most Americans.”
Except for the 46 million who don’t have health care, but who cares about them, right?
And btw, I disagree that it works well enough. I am fortunate to have health insurance despite a pre-existing condition and only because my spouse works for a large provider. Otherwise I would be cooked. Even within that I have very limited health choices. The Republicans argue that Obama’s plan would reduce my choice, what choices? I have to go to a doctor participating in my hmo. I doubt Obama’s plan or some hybrid from congress will change that.
The Obama style program has been tried in Massachusetts, and was an abysmal failure. Enough said.
One they have taken manof the key lessons from Massachusetts and worked to improve upon them. So far from enough said.
“One they have taken manof the key lessons from Massachusetts and worked to improve upon them. So far from enough said.”
In what ways specifically?
Good article on the WSJ from economist Authur Laffer http://online.wsj.com/article/SB10001424052970204619004574324361508092006.html
“Except for the 46 million who don’t have health care, but who cares about them, right?”
Sure, let’s screw up healthcare for the other 260 million Americans, and put this nation even furhter in debt so some percent of this 46 million can have health insurance. That sounds like a great plan.
Those who honestly “care” should run screaming from what the Democrats are proposing.
“Good article on the WSJ from economist Authur[sic] Laffer”
Maybe Laffer is on to something, but then here’s an example of Art Laffer putting his reputation (and a penny) on the line back in 2006 in predicting that there wouldn’t be a recession in the next two years:
[url]http://www.youtube.com/watch?v=IU6PamCQ6zw[/url]
Now you can watch in hindsight and evaluate who’s off base. What I saw was that he basically denied what came to pass.
wdf,
The list of economists that predicted the ressession is very, very short. If your point is to discredit Laffer’s opinion because he too failed in this regard, then please provide me with the name of an economist that you consider credible.
While you are at it, check out this link:
http://coyoteprime-runningcauseicantfly.blogspot.com/2009/07/peter-schiff-new-health-care-bill.html
Peter Schiff, arguably the most famous economist to predict the financial market collapse, writes “New Healthcare Bill is a Presciption for Disaster”.
To me your basic argument seems to come down to the fact that you believe that the system works well for those lucky enough to have coverage, I would dispute that claim.
I don’t think you can merely write off the 46 million uninsured as you have. That’s a fairly significant portion of the population.
And I don’t think the a system that adds a public option for health insurance is going to destroy us anymore than the existing public options have.
I have not “written off 46 million”, but we will have to agree to disagree. I think the public option is a terrible idea that will create many more problems than it solves.
To Jeff Boone:
I’m not well-read enough in economics to answer you. But between Laffer’s 2006 bet and Greenspan’s recent admissions of reading the economy wrong, I am just a little skeptical of depending on the opinions reputable economists.
To wdf:
Economics is the only “science” where theory is held at higher esteem than fact. Many economists are either guilty of over-thinking to develop brilliant and inflated theories, or they lack the capacity to remove themselves from their worldview and think objectively. I like the saying “we are all Einstein in hindsight”, but the 90’s tech stock bubble and the recent housing bubble didn’t require an advanced degree or sixth sense to see the train wreck coming. The next train wreck will be healthcare unless we prevent it. There are absolutely no facts to support the idea that government can accomplish a greater scope of coverage without causing a drop in overall quality and an increase in overall costs. The historical evidence is the government running anything means increasingly less service at an increasing higher cost. Conversely, there are plenty of case studies with facts to support the concept of greater competition in the free market causing a drop in price with a corresponding increase in scope and quality.
“Economics is the only “science” where theory is held at higher esteem than fact.”
This is not really an accurate statement and it actually misunderstands both the nature of science and scientific inquiry. The difficulty in economics is the same as the difficulty in many of the social scientists namely the complexity of models and the number of variables preclude clean analysis as to what happened. By way of simple comparison, in statistical analysis there is a notion of r-squared which explains the amount of variance in the variables captured by a given model. In the hard sciences, anything below 75% is considered quite poor, in the social sciences anything above 25% is considered outstanding. It is simply difficult to capture an explanatory model.
Now you will likely turn this around and argue this is junk science. I would argue that we learn a lot from even models with 25% r-squared, but we also understand that there is much to learn and it will be difficult to ever predict human behavior using simple modeling techniques.
This is a long way to address your point. It’s not that economists overly rely on theory, it’s that the study of economics at the theoretical level is never going to capture the complexity of the market place. There is too much uncertain and unknown and that is why people on the left and the right can argue points with such vigor and no clear objective truth underlies their claims.
“I like the saying “we are all Einstein in hindsight”, but the 90’s tech stock bubble and the recent housing bubble didn’t require an advanced degree or sixth sense to see the train wreck coming. The next train wreck will be healthcare unless we prevent it. There are absolutely no facts to support the idea that government can accomplish a greater scope of coverage without causing a drop in overall quality and an increase in overall costs. The historical evidence is the government running anything means increasingly less service at an increasing higher cost. Conversely, there are plenty of case studies with facts to support the concept of greater competition in the free market causing a drop in price with a corresponding increase in scope and quality.”
The state of Massachusetts is a perfect example of why the public option for health insurance won’t work effectively. It is a case study in failure and the very good reasons why.
When I purchased a house back in 1980, when ARMs were more or less on the market for the first time, I considered them a collosally bad idea, and wouldn’t touch them. If I as an average lay person can figure that out, then why couldn’t Alan Greenspan, the head of the Fed? People who live in wealthy, academic, or political bubbles often can’t see the forest for the trees.
“The state of Massachusetts is a perfect example of why the public option for health insurance won’t work effectively. It is a case study in failure and the very good reasons why.”
Please elaborate.
[quote]There is too much uncertain and unknown and that is why people on the left and the right can argue points with such vigor and no clear objective truth underlies their claims.[/quote]
This is a fine point, but there is also much disregard for simple fact and truth. With respect to human behavior, there is often more wisdom in the simple chestnuts and clichés of our elders than in the complex scientific models we concoct. The business of science has an inherent conflict of interest for simplicity; and so warrants a very healthy dose of skepticism and even scorn at times.
Although it was much an attack against free market principles, Kenneth Galbraith’s book “A Short History of Financial Euphoria” identifies a fundamental tendency for us to overdo and over steer. We gorged on credit and now we are afraid to spend. We wanted to kill the terrorists and now we want to talk to them. We elected a youthful and inexperienced meritocracy to power after suffering through the gut-feel-operating old dogs of the Bush Administration. We let wild exuberance and passion for the “crisis” in healthcare and the pending “tragedy” of human calamity caused by global warming dictate policy with little patience to understand common sense cause and effect (e.g., have you disposed of your expired florescent light bulbs or Prius batteries yet?).
Added to this tendency is the more recent American trend for debate separation along ideological lines and worldviews. Now, to hell with fact and truth because there is ego and pride at stake!
Truthfully and factually there is much more that is right and good about American healthcare than there is wrong and bad. Therefore we should be against any over-exuberant or under-rational plan to change it… despite what economists argue about.