Monday, January 3, 2011

Required Reading

Norman Orstein of the American Enterprise Institute, a conservative think tank, ought to be required reading for any Congressman grappling with what to do in regards to health care. Here are some excerpts from Orstein.

On the individual mandate:
What happens to health care coverage and delivery in the United States if the health care reform bill moves forward, but without an individual mandate? What happens in particular to the planned ban on insurance companies denying coverage based on pre-existing conditions?

We actually know the possible answers to these questions. The single most likely result is that premiums go up sharply for all of us. Without a mandate and without pre-existing conditions, many people will forgo insurance until they really need it--when cancer hits or when there are real signs of problems ahead. Companies have to adjust their risks, and with a different risk pool, they will have to push the costs onto the rest of the insured.

At the same time, many fewer people will be insured, putting much higher costs on hospitals. Once again, sick people will show up at emergency rooms in big numbers, including many who have minor ailments but know that absent other options, they cannot be turned away at the emergency room door.
Perhaps Republicans will be able to change the law to their preferred option, creating more high-risk pools to provide some option for those with pre-existing conditions who otherwise cannot get any insurance. But experience tells us that these will not work very well, with high costs (because they consist of the most ill and the most expensive recipients) leading either to high public subsidies or levies that are utterly prohibitive for those who need the insurance.

These are among the reasons why so many conservatives had championed an individual mandate--until Obama and Democrats did so. The most efficient way to create a different, more robust and effective marketplace in health insurance, and ultimately in the delivery of health services, is to expand the risk pool by making it universal.
On buying insurance across state lines:
The Republicans' other favored option to manage costs is to allow people to buy insurance across state lines.

We have tried this approach before with credit cards. What happened, predictably, is that companies gravitated to the state with the most lax requirements, and the result was something I and millions of others experienced: Be a day late with your minimum payment and you are hit not just with a stiff penalty but huge interest rates on your balance, including not just the amount due with the bill but on a much larger amount from your charge history. The patent unfairness of these and other practices led to sweeping credit card reform in the 111th Congress.

This "race to the bottom" would just as predictably hit the insurance market, with companies going to the states with the easiest requirements and laxest regulations, and people discovering only after they have insurance that it doesn't cover many things they were sure were required.

I was sorry that the exchanges included in the reform legislation, which Alice Rivlin has called the best chance to create a true private market in the health arena, did not include a national exchange, which would have been the best way to accomplish the Republicans' expressed goal. It would be a good reform to pursue in the 112th Congress, and there are others.
On death panels:
It turns out that Rep. Michele Bachmann (R-Minn.) was right when she said that if Obamacare passed, there would be death panels. But they are coming from Republican governors and state legislatures.
In Arizona and Indiana, these political figures are struggling with a sluggish economy, the loss of stimulus money, the slowdown in revenues, the need to balance their budgets and the inexorable growth in Medicaid costs. In Arizona, the rash decision to summarily cut off funding for organ transplants from dying patients has raised a ruckus. In Indiana, it was denying a 6-month-old a life-saving treatment that has worked in 96 percent of the cases tried, on the grounds that it was an "experimental" application.

Whether you admire the health care reform plan or not, there were compelling reasons to grapple with the entire complex system. We know costs will continue to grow sharply and that many more excruciating decisions--yes, rationing decisions--will be made by states, insurers, doctors, hospitals and others, with or without Obamacare. And without, the challenges and decisions might be even more difficult.
We need real solutions to real problems. No more populist pandering. We need leadership.  A question remains though: Can we have a fair and honest discussion about health care without opting for the political points of disparaging Obama and Romney for championing the individual mandate? Secondly, can those who are against mandates offer something more effective? If so, I would love to hear it.

Cross posted at The Cross Culturalist


Anonymous said...

Buying across state lines should still be an option. If people are late on payments, that's a personal issue. Those that wouldn't be late would benefit because of the competition.

Revolution 2010 said...

I don't think the point is the mandate. I think the point is states rights. If a state like Massachusetts decides that a mandate is the way to go, It's THEIR choice.

I also agree with the idea of buying across state lines. Nothing is perfect. If this benefits some, it's a win and an additional resource.

Pablo said...

But, Rev, why would a state like Mass decide that a mandate is the way to go. I admit that there could be reasons that apply to Mass alone that may warrant a mandate. But as far as I can tell the same basic problems exist around the country. Would you admit that if their is a justification for an individual mandate in MA, there may be a justification for an individual mandate in the broader country?

Revolution 2010 said...


"Would you admit that if their is a justification for an individual mandate in MA, there may be a justification for an individual mandate in the broader country?"


It doesn't matter if I agree. I have no right to force my view on a state where I don't live. Lets states determine there own needs. If you live in a state and don't like what the state govt does, you move or you use the vote to fight back.

Pablo said...

That is a fair enough reply. I see your point.

Anonymous said...

Pablo, that is not a fair enough of a reply...why did you let him get away with that?

Rev, I call BS. The whole thing is hypocritical, if you agree with the mandatein Mass, then you philosophically agree with health care mandates and should support the mandate in ObamaCare. You cannot have it both ways.


Michael said...

I agree with Rev.

I also believe if a state decides to remedy it's health care needs and uses a mandate to force those who can afford insurance to buy it, so be it.

Citizen's of any state know what's best for their particular state. Move, work to overthrow, or fight what you don't like in court.

Romneycare had been challenged and the courts ruled in favor of it.

End of story.

Anonymous said...

Michael, I believe that if you can agree with a mandate on a state level then you should agree with the effectiveness of it on a federal level. I, personally, don't agree with it on any level.


Pablo said...

Jersey, Rev, and Michael,

I think that Jersey has a point. Rev's point is a good political point -- if the people don't want it, then they shouldn't be forced to have it. But Jersey's point is a policy point -- if mandates are good for MA, then why aren't they good for the United States? Rev reply that the broader US doesn't want mandates does not address Jersey's point. The people may not want them, but mandates still may be good (or not) as far as policy goes.

Pablo said...

If my previous comment didn't make sense...

Rev, you are basically saying that an individual mandate in the US is a bad idea because it is unpopular. You are not saying that it is a bad idea because it is bad policy? If so, I don't know that arguing against mandates because they are unpopular is a sufficient reason to oppose mandates. It just lends itself to the spineless meme that Romney is famous for.

Anonymous said...

Pablo, I actually don't address, nor care about, the effectiveness of the policy because I think it is unconstitutional and immoral and opens the gates to a very slippery slope of stomping on personal liberties.

However the argument for MassCare but against ObamaCare is hypocritical and is purely, political posturing by both Romney and his supporters.


Pablo said...


It may be unconstitutional. I don't see how it is immoral or opens the gates to stomping on personal liberties.

But sadly, I have to agree with you on the political posturing part. I view MassCare as having been somewhat of a success (B+ maybe). I wish that Romney didn't have to shy away from it. But there is some hypocrisy there when Romney supporters are against Obamacare, but for Romneycare.

Anonymous said...

Pablo, I think it is immoral for a government to force its citizens to buy something they may or may not want. Think about it. They are dictating what we have to purchase. What will they dictate we buy next?


Anonymous said...

Well said Jersey, it is immorally, apart from the constitutionality of it.