Obama #3: He’s Right On Healthcare

This morning I watched Obama on CNN talk about his health care plan as opposed to Clinton’s. They’re plans are very similar with one difference that Clinton’s camp is trying to exploit. Her plan requires everyone to get health insurance. His plan will provide access to health care for all, but would not mandate it.

So Hillary Clinton, because of her real expertise on the issue is being talked about in the press as having the upperhand. But no one has taken seriously Obama’s concerns about a health care mandate–enforcing a healthcare mandate when you haven’t made it affordable enough will do more harm than good.

Though Clinton says she would work to lower overall costs to make healthcare affordable, her plan would then fine people for not having it, or garnish people’s wages to ensure it. So, you fine me, garnish my wages so I may lose money to buy food or pay rent–how am I helped by that? Wouldn’t that ruin my overall health outcomes? And would you have more people dodging the healthcare system, and only showing up to emergency room when they are in the most dire of situations? Wouldn’t that drive costs higher in the end?

I think her plan, in all seriousness shows the intelligence of a policy wonk–brilliant in it’s scope, but falls short in terms of practicality for many poor and working class people.

Obama’s plan would give people universal access–would drive costs down, ensure all children, but wouldn’t force people into getting it. He has said that he thinks most people who don’t have health insurance don’t have it not because they don’t want it, but because its not affordable. In the last Democratic debate, he knows the mandate would create potentially more damaging public health outcomes than it would improve, especially for people who make too much for Medicaid but not enough to pay for their own out of pocket.

NY Times columnist Paul Krugman has repeatedly slammed Obama’s plan in his columm, most recently yesterday. But the reality is, Clinton’s plan won’t cover everyone either. The best critique of Krugman, and the naysayers of Obama’s plan I’ve read is from a health policy blog called the Sentinel Effect. The blog interviews Obama health policy advisor David Cutler in December, and here’s his take (Cutler is in quotations, Interviewer in italics):

Then the devil is in the details, isn’t it? What would premiums costs? Who would get a subsidy, and for how much? Nobody is debating these issues with any specificity, and yet that’s where – arguably – the real debate should take place.

“That’s why we’re suggesting that we lower costs first. Otherwise, you’re saying you want to force people to buy something, but we don’t know how much it will cost or what you’ll get in return.”

There’s been talk that a consensus is forming among policy analysts that 10% of income is the right number for total out-of-pocket health costs, including premiums, copays, and deductibles. But that’s a very high number for lots of people.

“Well, healthcare is 16% of the GDP now. Some of that cost is being borne through taxes already. So it depends what you want to count.”

But 10% for whom? $4,000 for a family of four with income of $40,000 is a devastating figure. Whereas there are probably very few people in the top 2% of income who spend 10% on healthcare.

“That’s where the subsidy debate comes in, and is another reason to address the cost issue first.”

The reality is, in order to have “universal health care” you’d hae to get rid of the insurance companies–or severely limit their role to one of simply administration. But why would you need them in a single payer system? The government would just pay the providers directly. Since the insurance companies aren’t going anywhere if they can help it, they best thing to do is to drastically lower costs and make it affordable and accessible for people to get. t

2 thoughts on “Obama #3: He’s Right On Healthcare

  1. It’s true, controlling costs has got to be the key to addressing the outrageous state of health care in the United States. And I’m not speaking out as a partisan of one candidate or another…

    But, I am persuaded by some fairly simple arguments – maybe I’m misled, but, allowing people to opt out of health insurance, as Obama is proposing, means that the very poor, and the very healthy, won’t be insured. He talks about driving costs down, and he talks about the possibility of subsidies, but it seems to me that it will still be beyond the reach of some folks — meaning, they will continue to show up at the ER when a simple cough has become pneumonia, or a cut has become gangrenous.

    And the very healthy — the young, the active, the fit — may choose not to pay for health insurance. This has the effect of driving premiums higher! By not spreading the risk across the entire population, the pool of insured people ends up costing more per capita, because healthy folks who would “cost” the system little aren’t paying into it.

    Finally… you talk about the burden of a mandatory 10% of wages going towards health care costs. Last time I checked, I personally have 7.65% of my wages garnished as a mandatory contribution to Social Security/Medicare… and my employer has to pay ANOTHER 7.65% on top of that!

    I agree that punishing people who don’t have insurance is a lame idea. But, if you don’t believe in mandates, does that mean… we make Social Security and Medicare contributions optional, too? If not, how is that different?

  2. Steve you ask a really great question. I don’t believe in mandates that involve coercive or punitive measures, which as I stated, at the end of the day can actually worsen health outcomes in the long run, if health care costs dip into one’s ability to actually have stable housing, quality food, etc.

    I know that the system works so that the healthy subsidize the sick–and if you don’t have everyone in the system, the costs go higher. But at this point, the industry costs are driven by alot of other factors beyond the “costs” of the sick–the “supply/demand” theory as it relates to whether costs rise or not doesn’t always hold water. Corporations will struggle to keep costs high, because they make a better profit no matter how many people are using the service.

    In the health care field, we don’t force the drug companies to negotiate costs, and we have a lot of costly technologies that don’t necessarily do a better job of screening or treating certain conditions. They’re just the new and latest thing and people pay high costs for them.

    So the reality is, unless costs are driven way down (and the only way to do that is to have a single payer system if you ask me), neither of their plans will do what they promise. So weighing that against the potential punitive measures that Massachusetts is now using, I still think his plan is the better choice.

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