More Ezra:
Then there is Medicare. Medicare is a trickier problem. Because it’s not the problem: The American health care system is. As Henry Aaron, the centrist Brookings health care expert has testified, our fiscal threats “derive entirely from projected increases in national health care spending, not from problems peculiar to government health care or entitlement spending.” As such, “materially slowing the growth of Medicare and Medicaid apart from general health system reform is impossible.” In other words: Raising the eligibility age or cutting benefits does not solve the problem. It does not solve the problem for the private sector, of course, but it does not solve the problem for the public sector, either. The problem is driven by rapid growth in health care costs. If you do not arrest that growth — in both the public and private sectors — and you instead raise the eligibility age for Medicare, you will just have to do it again. And again. And again.
In other words… the Concord Coalition approach isn’t going to help. What’s required is structural reform. The kind of reform that is likely to be very disruptive and costly in the short term. But if we don’t invest, we’ll be looking at the complete collapse of confidence in treasuries.
Honestly, if Obama did absolutely nothing with his mandate but fix this one issue, he still will have done a great service to our country for countless generations to come.
Pretty soon, fixing this won’t be optional and that will pretty much kill a pure free market private insurance system anyway. I would rather not learn that lesson the hard way first,… the lesson is already hard enough.
use an untaxed employer-provided health insurance system?
Here is a brief write up on some other systems.
It’s not just insurance companies, there is a lot of resistance to ending employer-provided insurance coverage on this very blog. Everyone just looked at their self-interest, and didn’t want to give up any advantage they currently enjoy. They even made an issue out of McCain not wanting to force plans to cover birth control and fertility services.
<
p>McCain’s plan is still viable and I hope he continues to push it in the Senate. It is a lot like Germany’s (thanks for that link), where everyone would have a free basic plan paid for by the government, and the option of buying better coverage out of pocket. We’d need the same sorts of regulations – it wouldn’t be “free market” – to force companies to accept all patients at the same rates and have the government subsidize patients that they wouldn’t otherwise accept.
where do you figure this? It’s nothing like Germany’s. If it had been, I would have been all over supporting that.
<
p>What McCain does is incentivize employers to stop paying for health insurance, then give individuals a paltry $5000 tax credit that would not even cover 50% of the premiums per year for a lot of Americans.
<
p>Germany, my great aunt fanny.
That would cover my premiums, thank you, and go a long way to covering most people’s. It would encourage companies to offer plans that didn’t require any more money from the person’s pocket. And not taxing health benefits is super regressive, I think now that the election is over you might want to admit that we should tax health benefits. The size of the credit was determined by being revenue neutral to the revenue that would come in from taxing health benefits, so if we wanted to spend more on them, we could.
<
p>McCain’s plan may have had some problems, but those can be fixed. The idea of a tax credit as a way to move everyone off of employer-based plans is a good one.
What part don’t you get: it won’t work. There’s no amount the government could increase it that could truly cover private insurance, because there are many people who can’t get that insurance to begin with. Preexisting conditions, as a means to prevent people from getting insurance, is one of the serious problems in our health care insurance system – and it’s a problem McCain’s idiotic plan would make significantly worse, by allowing insurance companies to bypass state laws for the few states (like our’s) that force insurance companies to provide insurance without regard to preexisting conditions.
<
p>Germany’s system, which is a great model for America, requires everyone to get health care. The baseline is the government’s health care – which is very good health care – and 90% of Germans use and enjoy it. The other 10% get private health insurance that’s heavily regulated to make sure that it’s at least as good as the government’s baseline of care. The result of Germany’s system? For starters, Germans like their health care better than Americans like their health care. Beyond that, though, Germans have a better system that costs significantly less than our’s per capita and not only ensures everyone has insurance, but that everyone has high quality insurance. So, if we moved to a system like Germany, everyone would be insured, everyone would save money, most people would have better health care and everyone would still have a choice.
<
p>If you wanted a health care plan that was somewhat similar to the German system, it was Hillary’s, who would have created an optional government health care mechanism that anyone could have bought, regardless of preexisting conditions.
I’m not saying we should do McCain’s plan as it’s been proposed, it’ll need to be fixed. The part I like is how it taxes health benefits and eliminates that regressive and costly bribe that seems to hold all ideas hostage, and how it cuts a check to every American to get everyone basic health coverage. We do certainly need to force insurers to cover everyone at the same rates, even with pre-existing conditions, and reimburse insurers the way Germany does. And I like the English capitation system that pays doctors per patient, not per test.
<
p>And Hillary’s plan, like McCain’s, is not something to speak of in the past tense. We may have chosen a President, but we haven’t chosen how we handle the health care crisis. I’m not opposed to ALSO creating a government health plan, perhaps expanding the VHA plan to all people. I like socialized medicine, where doctors are paid salaries by the government, and hospitals make budget decisions based on medicine, not profit, but I recognize that we have a huge existing system of insurers and employer-provided plans, and we have to transition from that gracefully.
to only give it to HMOs, who are there to make a profit and have added costs that we wouldn’t need to make. Why not institute policies geared toward cutting out that middle man? If you want to transition to true national health care, you should be behind something akin Hillary’s plan. McCain’s plan would make the system significantly worse than it currently is. Seriously, no experts, be it in health care or the business community, were high on McCain’s plan. No one. You’re he only person I’ve heard who likes that plan. That should tell you something.
As someone buying an individual plan, I like the idea of being on more even footing with people in cushy employer plans. And I like the idea of getting a credit to pay for it, and I like the idea of my friends finally being able to afford health insurance. If there was a Hillary plan option available I’d consider that one too. The thing I don’t trust about a Hillary plan is that it’d probably force me to pay for IVF and birth control and more drug research.
To pull them down to the depths of your woe.
<
p>Not really a great strategy, is it?
<
p>Why not ask government to pull your case up, instead of tearing others down?
<
p>Furthermore, “cushy employer plans?” Really? I know more than one person who pays nearly $300 with employer-based health insurance. Really, it’s not as good as you think. Almost no American health insurance is.
<
p>We need a government option, period. It needs to be affordable and available to everyone. And anyone who doesn’t or can’t get private insurance should have government insurance – and it shouldn’t cost them anymore than they could afford. That’s your solution, not McCain’s stupid, hair-brained scheme.
Let’s take an extreme example:
<
p>Family coverage w/ HMO Blue @18k per year (unfortunately typical in this state)
<
p>Employee pays 25% of the premium, employer picks up the 75%.
<
p>Employee outlay $4,500 a year, covered by cafeteria plan so all pre-tax.
<
p>Employer outlay $13,500 a year. Employer gets deduction for paying this portion of health insurance.
<
p>Now go to McCain idea of employer no longer gets deduction for health insurance. However, employer does get deduction for salary for same $13,500 paid to employee (who is now taxed on this amount), and payroll taxes don’t apply to this portion as to plan. Employer is utterly indifferent from a tax standpoint.
<
p>Employee now has same $18,000 tax credit. Assume 28% tax on the employee for this marginal cost, so this high roller is looking at about a $5,040 increase in federal taxes paid. This is offset by the $5,000 tax credit for health costs. Basically back to square one for the employee and the employer.
<
p>Now we look at the national picture, where family insurance is around $11,000 (why do we live in this state – I know the answer because we have the best hospitals in the world – saved my wife’s life 4 years ago @ MGH and I’m praying for my brother-in-law right now @ MGH).
<
p>Given that national average, employee X has additional taxes of 28% of $11,000 or $3,080, but gets same tax credit for $5,000 so actually ahead of the game.
<
p>If you operate under the assumption that employers will operate in complete Simon Legree mode, of course will get screwed; however, since in the real scenario they’re basically indifferent (especially with payroll tax exemption on imputed deducted salary on health care costs), then the McCain proposal was basically a wash, and in fact for many areas of the country employees would actually come out ahead.
<
p>Helpful to do the math rather than just dismiss out of hand any proposal submitted by the opposing party. I thought that the major problem with our system was the fact that since WWII health insurance had been tied to the employer.
<
p>And if you want to point fingers and say that the employee situation is too generous in my original example (let’s posit a current 50/50 split), then actually is a better deal since the employee was already forking out more money in the first place.
This should be the first issue to tackle….
<
p>Or that it’s the biggest issue, to be tackled whenever is the politically most advantageous time during his term (ie, at the point with optimal chance of passing, be it 2009, 2010, 2011)?
… its one issue that can create fiscal breathing room for others down the road so sooner might be better as well. The common meme (if you believe it or not) is that a recently elected president has some ‘political capital’ to ‘spend’. Given it’s importance and how being well positioned now could help him get other stuff done by year 3 or 4, it might be worth ‘spending’ on this issue.
<
p>Of course that time is really right out of my ass since I really have no idea what the timing will wind up being in terms of the expense of a transition and the materialization of savings from the new structure. But its just like asking a financial planner “when is the smartest time to start putting money into my 401K?”… the answer is ‘yesterday’.
i agree: CW is a new president has political capital.
<
p>i do NOT think the CW holds right now. the R’s seem really SO disorganized about their message going forward, the best thing for them is anything “easy” to unite against. there’s the residue of the Bush big gov’t R’s and a re-emergence of small gov’t Rs.
<
p>ie, if they get health care reform, they probably believe they can get every single R to oppose anything obama puts forward.
<
p>if he puts forward an energy bill first, the opposition will be fractured in response, and he’ll be able to pick off a number of R’s.
<
p>i think the only health care bill he’s going to pass will have all Ds. no matter how good the idea, his first big gig shouldn’t be all Ds.
… in Mr. Emanuel’s hands to triangulate the politics of the possible.
<
p>It should be pointed out that to a certain extent, what is possible is up to us (emphasis mine):
<
p>
there is too much interrelationship of issues that you can carve out a single issue and address that in a vacuum.
<
p>If we judge the cost of health care as a percentage of GDP (1/6th?), then GDP growth is essential in preventing the health care segment from overwhelming the economy.
<
p>If we forget about the substantial money being spent in Iraq, spending that has no growth leverage to the economy, how can we expect to solve the economic problems?
<
p>If we forget about re-structuring the tax code, how do we incentivize corporations to expand within the USA instead of off-shoring more jobs?
<
p>His is a complex task. The best news is that he recognizes the challenge, and is bringing a lot of talent to develop solutions.
Multiple choice question. Take one look at your chart and guess which of these four wealthy nations is the war mongering global policeman with a military budget comprising over 50% of all spending? IS it Japan? Germany? Canada?
…. All else being equal, and it essentialy is.
Enjoying the fruits of your labor much?
… that you are pointing out. The chart just demonstrates the ‘what if’ on health care spending. It doesn’t assume movement in any other budget variables.
Excerpt from article in the New York Times.
<
p>
… seriously low hanging fruit to be gained in just gathering some statistics:
<
p>
There are some “quickies” that we can do, and should do in the winter and spring of 2009. A full-scale change in system is going to be difficult. It would probably become President Obama’s landmark fight and change, and while there is something to be said for it, I don’t think this is the time to attack head-on. Health care is a problem, but I don’t think it’s as severe a problem as our disastrous foreign policy in matters military, diplomatic, and economic.
<
p>If we stop our misadventure in Iraq, those are bigger, quicker, and easier savings than retooling an entire industry. If we work with allies to smartly stabilize global markets, ditto.
<
p>I will say lastly that I’m disappointed that education is once again ignored in people’s lists. NCLB is expiring soon, and there is nothing approaching a consensus about how to reform it, or whether it should be renewed at all. Along with health care, education is going to have the longest-term effects on Americans. And funny that it regularly is a top-3 or top-5 issue for Americans in polling, but is resolutely ignored by political chatterers.
and it’s from the Center for Economic and Policy Research. I cannot find these graphs anywhere on http://www.cepr.net, nor the topic anywhere on the website. (CEPR is a union funded, progressive “think tank.” Why would I believe any of their self-interested “research” which is never peer reviewed?)
<
p>I can’t even find the link. Maybe Ezra made it up.
<
p>Besides, what is this graph telling us? We spend too much on health care? Who decides this? Lynne complains
to which I infer Mr. Lynne’s solution is a single-payer system that limits the amount that can be spent on health care. This is the Canadian solution … spend less, restrict services.
<
p>Is America ready for 12-month MRI and CAT scan wait lists? Are 10 million US patients willing to give up their Lipitor for less effective statins? This is what they do in Canada.
<
p>When did I miss Obama’s platform for single-payer, universal health care?