OK, here’s how to pass a health care bill.
1. Individual mandate: kill it. It’s philosophically objectionable, logistically unmanageable, and won’t do that much good. Plus, as Charley points out, people don’t like it.
2. Employer mandate: modify it. Give up for now on a payroll tax, which apparently is a political non-starter. Instead, impose a per-worker levy on employers who don’t offer healthcare coverage. According to the Globe, the alleged “business community” can live with this, though they won’t yet say so publicly (though why this is so much better from their perspective is a bit mysterious to me). In addition, bill them if their workers use the free care pool (this has to be on top of, not instead of, the per-worker levy). Also, figure out some way to give good-guy employers a credit against the free care pool charges so that they’re not hit twice like they are now. This wouldn’t be perfect, but it’d be better than the current system. Trav needs to swallow his pride and go along with at least some version of this.
3. Medicaid expansion: go with the Senate version. House plan is better, but the feds won’t accept it, and they unfortunately hold most of the cards on this one. Feds might grumble about even the Senate plan, but they’ll take it at the end of the day, especially if Romney backs it, which he probably will because at this point any bill lacking a payroll tax is a big win for him.
So that’s it. An extremely imperfect bill, but one that at least advances the ball, covers some folks who aren’t covered now, starts to redress the unfair competitive advantage that the current system confers on employers who don’t provide healthcare benefits, and doesn’t cost the state hundreds of millions of federal dollars that we can’t afford to lose.
In addition, bill them if their workers use the free care pool (this has to be on top of, not instead of, the per-worker levy).
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Here’s the problem: handing an employer a bill for the sum of all of his employees’ medical visits over a year without a breakdown isn’t really fair, since it doesn’t allow an audit and might be too big a bill all at once*.
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The flip side — detailed billing — is an even bigger problem. How soon before the employer drops his employee with severe health problems to avoid paying the medical free care coverage? News flash: most of the folks who don’t have health care are eminently replaceable, and why would an employer hold on to an employee who’s benefits are higher due to the required additional free care contribution?
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Sure, you could say firing a person for this reason is illegal, but that won’t stop businesses from inventing or discovering other reasons to let the person go.
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Creating an incentive for employers to fire their most vulnerable employees is probably not good public health policy. Don’t bill the specific employer; that flies in the face of the concept of insurance pooling and spreading risk. Bill all non-insuring companies equally as a function of the number of uninsured. This spreads risk equitably** and doesn’t encourage the employer to lay off his sickies.
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p> * This can be avoided by making the employer pay 1/12th of the current 12 months worth of outstanding bills each month. This rolling average would help insulate the business from a suddenly sharp bill.
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p> ** Assuming that all employees are equally likely to need care, or rather, each company’s employees are collectively as likely to get sick. In reality, this ignores the average age of employees and the percentage who are male or female, but it might be a close enough first approximation.
All of the above components might be workable but you still have to deal with the waiver issues. Recall that $385M is at stake. Substitute some of the Medicaid expansion you proposed for premium subsidies so that low income folks can purchase health care insurance and use the $385M to fund those subsidies and you’ve dealt with the Waiver issue.
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And contrary to your recommendations, the individual mandate should be part of the final bill. The mandate is an important step in getting to near universal coverage. It’s a good progressive tool to move toward broader coverage and it works in concert with the premium subsidies to get more low income people insured.
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The philosophical objections (concerns?) to an individial mandate are valid but they are overriden by the necessity of obtaining broader coverage, using the Waiver money wisely and creating a system that will conserve scarce health care resources.
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http://www.neopolity.blogspot.com/
I respectfully disagree on the individual mandate. I detest the idea of government forcing individuals to purchase an expensive product in the private market for the privilege of living in this state. It may well be unconstitutional (if it’s passed you can bet we’ll find out quickly), and it is a really bad idea for lots of other reasons, as I’ve repeatedly written on previous occasions. I find nothing “progressive” in the notion of government forcing people to buy stuff they don’t want. “Orwellian” strikes me as a better adjective.
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On the waiver, I suspect that the feds would go along with a modest Medicaid expansion if Romney backs it, and that’s the best option. If they won’t, though, we’ll have to do something along the lines you suggest – we can’t afford to lose the money.
nature of an individual mandate but the precedent for it is well established with auto insurance and a whole slate of health insurance mandates already required by the state.
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I think it is a progressive approach because while–as a good liberal–I’ll happily allow the free market to work its magic and solve price and distribution problems whenever possible, the market is incapable of (efficiently) solving this problem.
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Practically speaking it comes down to this:
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The insurance subsidies for low income people only work if some critical mass of people enter the insurance market so that the risk can be spread over a larger pool and keep the cost of health insurance within striking distance for low income people. The individual mandate ensures that the risk pool will be large enough to fashion health insurance plans that are affordable for the greatest number of currently uninsured (or under-insured) people. The subsidy will kick in so that people who can’t otherwise afford it will be able to. There are a bevy of problems that will need to be addressed to make it all work (precise level of subsidy to avoid crowd-out being chief among them) but those are problems that any new policy proposal faces and they can be solved over time as the system matures.
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The alternative of simply putting many of those same uninsured folks on Medicaid will cost much more money because instead of the state just paying for a portion of the health insurance cost (the subsidy) the state will pay the whole tab (well half . . . with the federal match).
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To summarize: The mandate allows us to do more with less and represents a very small encroachment on individual liberty.
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How’m I doin? Persuaded?
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http://www.neopolity.blogspot.com/
I see it as a massive, unprecedented assault on individual liberty. It is completely difference from auto insurance (as I’ve explained before) – the short version of the argument is that nobody has to buy auto insurance because nobody is required to drive a car. And I don’t understand your mention of a “slate of health insurance mandates” – what are you referring to?
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I understand the need to diversify the risk pool, but there are other, extremely important, competing values in play here, and to me they trump the need for insurance companies to be guaranteed a tidy profit. If we can’t do this without an individual mandate, we’d better find another way to do it.
I re-read your (David’s) rebuttal of the auto insurance mandate and I’m still not persuaded that the distinction is anything but facially valid. Both you and stomv insist that because no one “has” to buy a car, it is a completely different sort of mandate. I think that’s a false distinction.
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First, lots of people “have” to buy a car. Many people who live in cities don’t have to have a car but suburban and rural folks do. It’s kind of unfair to suggest that all those people who don’t want to carry their groceries 5 miles back and forth from the Shaw’s market are choosing to buy a car just for personal convenience. A car is a necessity, not a choice, in most parts of Massachusetts except possibly in its urban centers.
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Your point that auto insurance mandates are also justified because of the inherently dangerous nature of driving is fair but again the real precedent value of the auto insurance mandate is that it spreads the social cost of an activity over the whole population. To not spread that cost leaves a divide between the “haves” and the “have nots” that is (1) socially undesireable (urban drivers will pay a lot and rural drivers will pay a little) and (2) costly to the state (drivers without coverage will cause damage that the state will have to repair)
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Second, “mandated benefits” are part of the insurance law in most states. They mandate that any insurance plan offered in that state offer coverage for a specific disease or treatment. Cancer screening, diabetes care, fertility treatment, etc. Mass has a lot of them and of course insurance companies (and libertarians) don’t like them because they make insurance more expensive. Mandated benefits are an example of spreading a social cost over the whole population and not just leaving those with a specific ailment to bear the full brunt of the cost.
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My point is that, they too, are a precedent for an individual health insurance mandate. If the state can require that anyone who contracts with an insurer buy a policy that has all of these “mandates,” it is but a short philosophical leap to require that they buy a policy in the first place.
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Our biggest disagreement seems to be over just how minor an encroachment on liberty this individual mandate will be.
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That’s great because that’s where the argument gets interesting! I think it is a minor loss of liberty and justified by the social good that will result. You and Stomv disagree
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But I don’t understand how you can so readily agree to an employer mandate (“impose a per-worker levy on employers who don’t offer healthcare coverage.”) and be opposed so vehemently to an individual mandate. What’s the principled distinction between the state compelling a business entity to purchase an insurance contract and not similarly compelling an individual? Businesses are people too.
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is the difference. Businesses aren’t people. That’s the “principled distinction.” Sure, the law treats corporations as people for some (perhaps too many) purposes, but the reality is that businesses are not, in fact, people. Doing business in MA is a privilege for which businesses must comply with an enormous variety of regulations. Living in MA is a right that should not be conditioned on buying something you may not want.
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And I still think I’m right on car insurance. Sure, cars come in mighty handy for people who choose to live in certain areas or hold certain jobs, but that doesn’t change the basic point that owning something – anything – is a choice, as it should be. And as to risk-spreading, the issues between car insurance (which is basically liability insurance designed to ensure that injured people are made financially whole regardless of the assets of the person at fault) and health insurance are enormous – I’ll stand by my previous discussion, no need to repeat it here.
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Finally, sure, MA has mandated benefits for health insurance plans, but that has nothing to do with the antecedent question of whether the state should be forcing people to buy health insurance in the first place. The two seem entirely unrelated to me – it seems relatively uncontroversial for the state to dictate the terms of certain contractual relationships (such as health insurance) into which people voluntarily enter, but far more controversial for the state to force people to enter into those relationships. The “philosophical leap” that seems short to you seems abyss-like to me.
Only because…what is the penalty for not getting health insurance under the individual mandate? It’s not like the government will throw you in jail. Rather, it’s that you lose your license.
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So it seems quite the same to the auto insurance argument. After all, nobody is forced to have a car. So, they CAN choose not to have health insurance — but they just have to live with the fact that they cannot have a license.
I believe there was a proposal floated that the state could garnish your wages. Also, the House bill includes a provision that the state will withhold your income tax refund up to 50% of the cost of the policy that they think you should be buying. So even if I agreed that the penalty of losing your license rendered this just like car insurance, that’s not the only penalty.
I don’t carry auto insurance. Not a whit. Am I breaking the law?
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Nope. I don’t own a car.
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The government can’t force you to carry auto insurance if you don’t own a car. There’s no similar scenario for health insurance. No health insurance if… you don’t get sick?
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In fact, the only place where health insurance is required in Massachusetts is… students. As a graduate student, I am required by law to carry health insurance. It’s handled well — it’s part of my fellowship. Still, does it make sense to require a 27 year old math student to carry insurance, but not to require a 27 year old private contractor roofer to carry insurance? Who’s more likely to end up in the emergency room?
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A government requiring a person to enter a private contract with a private company is wrong. It’s wrong for college kids (who, by the way, are subsidizing others’ insurance by adding to the risk pool without being particularly risky), and it’s wrong for everyone else.
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It’s a substantial incroachment on individual liberty. It requires that you hand over medical records, it requires that you enter a legally binding large financial contract, it requires countless waivers and forms to be filled out, etc.
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I’m not persuaded.
The individual mandate is Orwellian, it’s going to force a lot of people to make decisions between food or health care (or food or pay fines) … It’s also not a good idea to expect the state to pay for people who don’t want to pay for health insurance because they’d rather buy an iPod instead (lots of young people I know are in this category).
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Yes, if everyone has to have health care, the market will produce solutions that are lower cost for those folks who can only afford those. Those solutions will only cover the basics, and they’ll probably have to pay a ton of money for anything beyond that, so while we will say “they have health care” that doesn’t mean they’ll have GOOD health care, or even adequate.
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What’s the solution? In my opinion, this is all an argument for universal health care a la Canadian. Yes, I know the Canadian’s (and Germans and others) are moving away from their original models, but just because they’re imperfect doesn’t mean that they should be totally scrapped. They’re a heck of a lot better than what we have now. Obviously this is not politically feasible (perhaps the whole thing needs to come crashing down before it is), so the current proposals are what we’re stuck with.
I tink that stomv is right that it’s undesirable to bill employers for employees who use the free care pool. I think that it’s an administrative hassle. For small employers who would never self-insure it defeats the risk-pooling features of insurance. But my main concern is that anyone who mentions that anyone who looks like s/he might ever get sick will be unemployable.