Strengthening Constitutional Self-Government

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Health Care

The Slow Retreat

One of the many ironies of the current situation is that, on the right, there is a mismatch between the stridency of rhetoric and the radicalism of policy proposal.  The more established conservative media figures often have an unusual relationship to policy.  Their policy bark is more radical than their bite.  In Liberty and Tyranny, Mark Levin is highly critical of Social Security and Medicare as bankrupting statist projects designed to tie down the people.  His main policy proposal is to fight against nationalized health care.  In  Arguing with Idiots, Glenn Beck took a similar path.  He bashed the NHS, Michael Moore and pointed out how Medicare's actual costs have far outstripped the initial cost projections.  As a positive program, he mentioned some information technology and productivity enhancing developments but there was little on policy.  

 

Neither guy came out for the actual repeal of Medicare (though Levin seemed to make an implicit argument for allowing younger people to somehow opt-out of Medicare.)  The focus is less on undoing the resented past, than to prevent the next state intrusion into medicine.  Medicare isn't going away, but we can learn from the problems of Medicare to stop nationalized health care.  The result is a combination of rhetorical maximalism and policy stand patism. The result is also a ratchet effect in which conservatives resentfully acquiesce to the last expansion of state power over health care and do battle against the next one, and then, when that fight is lost, throw up new defenses against the next statist proposal.  The result seems to be the super slow motion government takeover of health care.

 

I'm not singling out Levin and Beck.  This strikes me as having been the general position of most conservatives since at least the mid-90s.  I'm irritated at hearing liberals argue that Obamcare's (at least it's current iteration) combination of individual mandates, coverage mandates, and subsidies was the conservative position on health care reform because similar proposals had been floated by some guy at Heritage, Orrin Hatch and Mitt Romney.  Just because a position was taken up by some think tank guy I never heard of, an FOTK (Friend of Ted Kennedy) Senator I didn't care about, and a politician I never trusted didn't make it the conservative position.  I knew what I thought, what the other conservatives I talked to thought, what I read, and what I heard and saw in the broadcast media.  The conservative position was that government involvement had gone too far already and , minus some tweaks like tort reform and (later) interstate purchasing, the government should leave the private health care system alone.  

 

This defensive mentality creates a situation in which whenever liberals move policy closer to government-run health care, they win and when they fail, they don't lose - because policy doesn't go backwards.  This has implications for the future of Obamacare.  There are structural reasons to think that Obamacare won't be repealed anytime soon (though Republicans should try.)  The danger is that, five or seven years from now, conservatives will have come to a resentful acquiescence of Obamacare and thrown up a new set of defenses that will be worn down over time as the current iteration of Obamacare makes existing problems of medical inflation worse. Based on the experience of Massachusetts, it is reasonable to expect that Obamacare will lead to an even faster increase in insurance premiums.  This will, over time, lead liberals to advocate for some combination of price controls and a government-run insurance option that will crowd out private health insurance.  Conservatives will point to the problems caused by Obamacare as a reason not to go further in the direction of government-run health care.  They will be right, but a merely defensive policy position will be overrun.  The premium increases really will be unsustainable and liberals will only have to win the policy battle once.  A mere repeal of Obamacare strategy will also be problematic because with premiums much higher than at present, people will be terrified of losing guaranteed issue and government subsidies in the hope of declining insurance prices that might never happen.

 

If conservatives really want to stop a government takeover of health care, they (and I don't just mean some think tank nerds and Paul Ryan) are going to have to go on the policy offensive and popularize the arguments for a more free-market driven health care system and a series of policies that will help people of low income and preexisting conditions participate in such a system.  It means more than just undoing Obamacare, it means creating a more free market health care policy than we had before Obamacare.  This strategy will have to be specific.  It will have to offer real world benefits and be constructed in such a way that it can be implemented a little at a time with victories here and there that increase the number of health care consumers that act like health care customers and are better off for doing so.  We should move to a strategy on health care in which winning means more than temporarily not losing. 

       

 

Categories > Health Care

Discussions - 29 Comments

Your commentary, "...whenever liberals move policy closer to government-run health care, they win and when they fail, they don't lose - because policy doesn't go backwards." echos Margaret Thatcher's comments recounted in "The Downing Street Years." She writes in her introduction, "But in the fine print of policy, and especially in government, the Tory Party merely pitched camp in the long march to the left. It never tried seriously to reverse it....If these [liberal policies of taxation, nationalization, regulation] were cut down at the start of a Tory government, they gradually crept up again as its life ebbed away...The result of this style of accommodationist politics...was that post war politics became a "socialist ratchet" - Labour moved Britain towards more statism; the Tories stood pat; and the next Labour Government moved the country a little further left. The Tories loosened the corset of socialism; they never removed it."

It will take a conservative leader of the stature of Margaret Thatcher to stand athwart the tide of socialism and bring it to a halt, as she was able to briefly due during her tenure at PM. Unfortunately, even her influence was diminished with subsequent governments and the ratcheting resumed. Where in the Republican Party is a leader, a group of leaders, or the commitment to the policies and the will to reverse the damage done?

The problem is not jus Republicans or Republican leaders, but the will of the people of the United States, which is still sovereign. Really, it is. What is remarkable in history is the gathering of political will to even see the oppression of paternalistic government much less cast it off. "Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed." If government is doing anything like a fair job of making oppression comfortable, then people will not cast it off.

Obamacare, a gradually nationalized medical system, is just part of the great blanket of government we have chosen to pull up to our chins. Even if we pull it up over our collective heads to hide the scary world, real and imagined, until we are really smothering we will like it well enough. We might not even like it all together and will complain about the weight, the heat, the itchiness, and other bothersome things. We will not cast it off out of prudence and custom and at at best we'll pull it down a little so we can breathe, even just a little better.

The problem with you or I looking at democracy is that we know that because of it, America, we, are doing this to ourselves. Or you can look at it the other way, we are doing this for ourselves. That's how Obama and people who agree with him put it and that is what a voting majority of America elected to our federal government. I know many people in the Tea Party whose complaint is "too much, too fast"! Which is not to say, STOP the socialist oppression, but merely slow the rate of increase till we get used to it, please. It is appalling that "Liberalism" has come mean an increase in government control as liberty and liberating. What is liberating about taxation, nationalization, regulation?

of course, people see benefit not in those things, but what they hope those things will produce for society and the themselves. I don't see what any leader, a Thatcher or a Reagan or anyone today can do more than "loosen the corset" or pull down the blanket if the inclination of the majority of people is in favor of the corset/blanket.

Kate, I have my concerns about public opinion but I don't think that Obamacare was an expression of our collective desire for more Big Government. Obamacare was opposed by more than it was supported. The Democratic legislative majorities that made possible the passage of Obamacare despite public opposition only existed by a freak of circumstances (the Iraq War, the financial crisis, the political exhaustion of the Republican Party, the competence of Obama's campaign) that had little to do with health care. Public opinion also did not stop Mitch Daniels from making significant free market-oriented reforms in Indiana (creating a program of HSAs and catastrophic coverage for state employees and Medicaid clients) and winning a huge reelection victory.

I do worry that, even with the initial unpopularity of Obamacare, institutions create interests. People might not like the mandates, put as the current system raises premiums over the next five to ten years, doing away with the system of guaranteed issue and government subsidy becomes harder politically. That won't be because people will have suddenly come to like Big Government (they might be unhappy with the situation), but because Obamacare will have structured their choices in such a way that the repeal of Obamacare will make it seem like they won't be able to afford any kind of health insurance.

I also don't think that the public has chosen against free market alternatives. I would guess that less than five percent of the public has even heard of the Yuval Levin-style plan for individually owned renewable insurance or the David Goldhill-style plan for HSAs plus catastrophic coverage. In some ways this is understandable. Free market-oriented health care in its present form is fairly new. On the other hand, how many more people have heard about the New Black Panther Party thing than have heard about Daniels' experience with health care policy in Indiana?

This isn't to say that there aren't roadblock in the form of public opinion. Any plan to abolish Medicare is political suicide. I don't think that Paul Ryan's plan is politically prudent. It would, over several years, destroy the system of employer-provided health care coverage and give people a tax credit that would SEEM to buy them much less health care coverage. And to people less health care coverage is synonymous with either less health care, less disposable income or both. I think that moving to a more free market-oriented system will have to be a more gradual process in which regulatory and other policy changes create classes of people who operate as consumers, and then, as the general public see that this saves those people money without compromising health, income or security, it becomes easier to make bigger changes. But it is will be trench warfare to get there.

I'm not the most worried about the lack of a Reagan or a Thatcher. I'm more worried that the institutions of the right will moan and bellyache about Obamacare, chase the story of the day (Black Panthers, Arizona, whatever) and waste the time that it will take to explain the more free market-oriented alternatives to the road Obamacare is leading down. Every day is precious, and so far, every day has been wasted.

Re, "just part of the great blanket of government we have chosen to pull up to our chins", my fear is, as Pete notes, "we" have not chosen to pull the blanket up, we are being tucked in by the nanny state, in this case, "Mother Sam. When politicians, with a straight face, tell us that we need to pass legislation that no one (or very few, and fewer law makers among them) has read in order to know what the law contains, our elected representatives have abrogated the responsibility they have presumably incurred in being elected in a representative democracy / republic. But "authority without responsibility" seems to be the motto of our current Congress.

This is a broader issue than just health care. The new financial regulation (which allows the government to cancel contracts with financial institutions, if they don't meet as yet undefined "diversity" targets in their workforce), and pending energy legislation that would increase the price of energy, decimate the domestic energy industry, and increase our reliance on imported oil are also examples.

I do think we need to worry about not having a Thatcher or Reagan - or some body of conservative legislators coalecsing around clear policy objectives and specific programs (ref Newt and the Contract with America), whether developed in institutions of the right or somewhere else. Policies without someone with the authority to implement them and who feel the responsibility for them, even when well founded, are insufficient.

Then there is the problem of a biased media that repeats the mantra that there are no alternative programs to those of the Democrats. If the message can't get out, then the necessary public support is lacking. The growth of the Tea Party movement shows how informed citizens can provide that support, but when you look at the slavish devotion to liberal politicians by members of certain racial and religious groups, one despairs of gathering the broad-based support to oppose the bread and circuses platform that attracts those supported or dependent on the government and not eager to change that condition.

Jim, several points,

1. I'm more interested in a wide group of reform-minded politicians and activists than in any one exceptional leader. If one such leader emerges, thats great, but I don't think that waiting for one helps and, even if such a leader emerges, I don't want to think everything falls apart if they should have a traffic accident. People in authority matter of course, but I'm thinking people in Congress, the states and municipalities and stuff like that. President too of course, but climates of opinion (even climates of opinion among conservatives) can matter as much as which Republican is elected President.

2. Conservatives have a huge problem in getting their message out to people who don't consume right-leaning media. Much of the right-leaning media is also not as helpful as it might be in what issues it focuses on and how it frames issues like health care. Huge problems and I have no real answers.

No, there was/is not support for Obamacare as it is or might be, or -- no we really do know the details even yet. (If Harry Reid says it will mean a single-payer system, I tend to believe him) However, the halloo was up for "something" to be done about health care, or at least paying for health care for some time past. How we got to a place where going to the doctor or even worse, to the hospital, was too expensive or even ruinously expensive for a heck of a lot of Americans if they did not have health insurance is a bigger argument than I care to get into. However, that is the case. Medicare and Medicaid underpay doctors and hospitals and are still "unsustainable" which is another way of saying "so darned expensive it is going to eat us alive".

People want government to do for them what they think they cannot do for themselves. That list of things keeps growing or the portion of the population that thinks itself incompetent to cope with life keeps growing. In addition, the list of things that are profitable enterprises that some people think that other people should not profit from is growing. How do we turn this thinking around?

Maybe the Tea Party movement is full of people who do not think like that, but I also see "Don't touch my Medicare!" signs at the rallies. Yes, political suicide, and that seems an ironic turn, that Democrats meddling with the government program, Medicare, causes the proposed government health care reform package -- merely significantly extending Medicare, according to the Democrats -- to be unpopular.

My point is that Americans elect the people who make "Mother Sam" and who pass the legislation that the bureaucracy that makes "Mother Sam" into something huge and smothering. Republicans, at best, put her on a bit of a diet: even Reagan only did that. We have to change American sensibilities. Maybe a few good leaders would do that, but looking at the history of our government and politics, I just cannot find much hope for that. Mother Sam needs bariatric surgery or liposuction and no one in America really seems up for anything so drastic.

"for the bureaucracy"

Kate, in one sense Reid was posturing for some liberal bloggers, but Obamacare will almost certainly produce premium increases that will create political pressure for the introduction of price controls and a single-payer system - if the experience of Massachusetts is any guide.

The idea that something needs to be done is not, in itself wrong. The combination of tax subsidies for health insurance that is virtually comprehensive prepayment, and state (and now federal) coverage mandates put alot of upward pressure on premiums and of course Medicare as presently structured is unsustainable. Medicaid is less of a "problem" for taxpayers because states often deal with funding problems by stupid and destructive across the board spending cuts that don't solve the program's underlying problems.

So alot of the problems of health care are also problems of government policy. There are two (really more but for example) ways of dealing with it. The first is to get "government" out of medicine. This is fantasy. We are going to have some kind of program of subsidy for the poor and subsidy and/or forced savings for the elderly. Just ending the tax subsidy for employer-provided coverage will destroy the finances of those with preexisting conditions. No party can possibly run on a get "government" out of medicine program and hardly anyone even tries to explicitly argue for such a policy.

The second is to say "alright, we have what we have, but no more." The problem with that is that our health care funding system really is unsustainable, and it not reformed will crush our economy. It also give the Left all the initiative and every gain they make is never reversed. This is the losing defensive position I talked about.

The alternative is to try to use government policy (through regulatory changes, tax subsidies, HSAs, reinsurance pools, - there are lots of different ways to structure it) to create a market of health care consumers that can slow down medical inflation. This means going on offense in the health care war of ideas. It means being for a whole bunch of somethings. The alternative is losing.

As far as I can tell, the new plan is designed to kill off the insurance industry. What is its crime? It makes a profit on the health and well-being of people.

Yes, the problem with health care, in large measure, is government policy and all the things you mention, including mandated coverage and also a lunatic tort system. Charitable support of those people who could not get coverage from private, for-profit companies is, yes, inevitable, bit I really do not see how that has to mean government being within the medical care system any more than insurance companies are within the system. Government is within the system in all sorts of regulatory ways that have nothing to do with coverage. Nurses spend a heck of a lot of time on paperwork documenting patient care instead of giving actual patient care. This is an expense and drag on the system, too.

There certainly are lots of other ways to structure health care reform. However, we will probably never see them because what has been legislated will not be repealed. We are stuck with it and we don't even know what it is. Drudge offers this article:http://www.investors.com/NewsAndAnalysis/Article/542171/201007301830/Will-Washingtons-Failures-Lead-To-Second-American-Revolution-.aspx --
"Will Washington's Failures Lead To Second American Revolution? "

A President Obama intent on achieving his transformative goals despite the disagreement of the American people has powerful weapons within reach. In one hand, he will have a veto pen to stop a new Republican Congress from repealing ObamaCare and the Dodd-Frank takeover of banks. In the other, he will have a fistful of executive orders, regulations and Obama-made fiats that have the force of law.

I like it and hope that it is right and I am wrong about what the American people want.

Kate, the health insurance companies exist in their current form because of government policies that subsidize (and now to some extent mandate) health insurance as comprehensive prepaid health care. The current law is only indirectly designed to drive health care insurers out of business. On the surface, the law guarantees insurers a captive group of government subsidized customers. The problem is that the law virtually guarantees that premiums will up and up. Liberal (and not only liberal) politicians will tend to blame the mean old insurers. Price controls and single-payer will then be what the doctor ordered to remedy the problems caused by Obamacare. Well thats the plan anyway and it is a play that I would like for conservatives to break up.

I'm not sure that the institutions for private charitable support in a highly mobile society would suffice or that majorities could be persuaded to take a flyer on such a policy as a substitute for the role that government presently pays. Now government involvement can be structured in multiple ways that are less intrusive and allow market forces to bring down medical inflation. One way (there are other ways) would be to transition away from the current tax subsidy for comprehensive prepaid insurance and do away with coverage mandates. This would reduce direct government power over health care and let consumers pick the best providers - and give providers incentives to be more productive and transparent. The problem is how to get from here to there. People like their employer-provided plans except for the rising premiums and that they are tied down to their jobs. Individually purchased insurance seems like a bad deal at the moment and most health care providers are not oriented to middle-class customers who want to pay cash. As an individual consumer, you have almost no bargaining power in a system dominated by insurers and government programs. So wanting to transition people from the current system to a market-oriented system seems like a move from the maybe overpriced and somewhat precarious current system to total vulnerability and higher cost. That is the political problem.

"As far as I can tell, the new plan is designed to kill off the insurance industry. What is its crime? It makes a profit on the health and well-being of people."

No, it makes a profit by collecting premiums, creating intentionally labyrinthine bureaucracies of red tape and paper-shufflers, and then going out of its way to avoid paying out for claims.

Your take on the health insurance industry is unbelievably naive; I can only hope you're a freshman young Republican, with time and experience ahead of you to help you learn.

My husband has been selling health insurance for 28 years. I have been hearing his complaints about health insurance companies, their rules and government's involvement in the business through regulation, mandates, stuff like that for about 27 and 3/4 years. He and other guys in the business have all sorts of ideas about how to make health insurance more affordable.

One of those is to make the market more like that for car insurance. Allowing market forces to work is a popular suggestion from those guys. Allowing people to form their own pools -- even through churches or community organizations or even municipal government is another option for affordability. These are things that should have been done years ago. It is silly having a system based on employment. That was a perk at one time, it is mandatory now? What the heck?

Yes, suggesting open market health insurance seems politically crazy right now. I guess I know how America got here, but I think it is crazy that we did. Admittedly, the current system generated so much money and demand for health care that modern medicine in America has plenty of money for research and development which has done wonders in terms of keeping people alive and sometimes even healthy. However, all that marvelous stuff is expensive and keeping people alive who would otherwise have died and stopped being a drain on resources also creates expenses and ones that demand moral decisions most people are not equipped to make.

No doctor, neither friend nor acquaintance, seems inclined to make life or death decisions on behalf of patients. Is our government's involvement likely to force such decisions? Will cost-cutting or the democratic moral demand for prolonging life win out if the government becomes the arbiter of life and death? I don't see how we are made for the former.

No, it generates revenue (from which profits are derived) by providing risk-pooling services. Whether or not they are going out of their way to avoid paying claims (and why should they pay claims in the absence of contractual obligation?), the re-imbursements paid by private insurers exceed receipts from patients' out of pocket by a factor of four.

I suspect the utility of an employer-based system is that the body of employees of a given firm make viable actuarial pools. They contain few who are elderly, disabled, or chronically ill and the factors of self-selection which bring them together are not strongly correlated with the state of their health.

The problem you get with having voluntary associations vend insurance (the Knights of Columbus has been offered as a possibility) is that you run the risk of corrupting the institutional mission of the organization by leaving it laden with a mass of people who joined only for the insurance (Aside from the fact that the pools are self selected).

My son was let go from one company because his wife's health problems made their health insurance considerably more expensive than that company could afford. "Sorry." they said. It was real problem for them. He works at and will make a career of a job he doesn't really like because the corporation is large and international. Though even with the larger pool Medicare is her secondary insurer, as it is so expense to keep the girl alive.

We know one small business owner who has had four out of about 60 employees diagnosed with various kinds of cancer in the last 18 months. Only one has been with the company for more than five years and two were fairly recent hires, one with the cancer as a preexisting condition, but he had concealed the fact.

Which is better? That whole company will be less profitable, the owner will have to defer any raises even for real merit, all employees will be hit; they probably cannot change insurance companies -- their pool is pretty murky. (Couldn't resist) Which is better for the greater number of employees of those companies?

I get it about actuarial pools. I still ask, so what if the pools are self-selected? A friend, a carpenter, is in a group plan through (I think) the Mennonite Church. Ah -- found it -- http://www.mma-online.org/c.aspx?id=208&token=1 -- He has no problem limiting his smoking and drinking, which I think he said was a condition for remaining on the plan. They can keep their costs low because their pool does not engage in risky behaviors. I don't see why that is wrong.

What's your point, Kate?

Kate, the rules are so complicated in large part (though not entirely, there will probably always be grey areas) because health insurance functions as a form of comprehensive prepayment rather than as insurance for events that almost no one can protect against. This creates all kinds of price and incentive distortions and one of them involves ineveitable disputes about what insurance companies will or won't cover (drug A or drug B, Doctor X or Doctor Y) that in a more transparent and market-oriented system would be made by the consumer - who would also be paying while getting higher take home pay and (hopefully) lower cost medical services. That doesn't mean that some insurance companies wouldn't try to exploit ambiguities in order avoid their obligations as offering insurance, which is where the government's regulatory role would matter in enforcing contracts.

Insurance companies respond to the incentives created by the business climate in which they operate. This includes government regulation and over regulation. When a State mandates coverage, community pricing, and price controls, it drives the cost of providing insurance up and incentivizes the insurance company to carefully scrutinze claims for excess and fraud. Of course, you could turn to Medicare for a system that doesn't do that, and which has hundreds of millions of dollars in fraudulent claims for services never rendered. Unfortunately, insurance companies don't have a taxpayer backstop to top up their reserves - they have to make money to invest in better services and coverage.

Contrary to what was reported in the media, Republicans and conservative groups did have solutions that would lower the cost of health care, improve the quality of care and delivery, and expand coverage by making it more affordable (non of which Obamacare does). This included being able to buy insurance policies across state lines, beefing up Health Savings Accounts, removing the tax break from employers and giving it to individuals, tort reform, and a few other provisions that could have been passed individually and put in place one by one without tearing down the present system.

As for people still unable to afford insurance or with pre existing conditions, how about a government program that addresses this few million people (not 44 million as is the oft quoted number) .

The Obama administration has demonized the insurance industry, because their own plans and projections don't stand up to serious scrutiny on their merits. Their ultimate goal, which they will reach by indirect means, is a government run single payer system, just like the ones being dismantled around the world as they become increasingly cumbersome and expensive and unable to deliver on their promises.

Art Deco -- My point is that tying health insurance to employment is not really good for individuals or for businesses. A construction company, or a bank, or a flower shop should not have to be in health insuring business. Alternative pools of customers is a good thing.

Driving my daughter around, I remembered when I was in college and admissions required we purchase health insurance through the university. It cost $25 a year in 1971 to insure an 18 year old in a pool of young people. We were all unlikely to need medical care. Coverage was minimal, aimed at covering catastrophes.

As Jim points out, repeating pints made above, there are many alternatives to manage paying for health care. Or anyway, there ought to be. I guess there won't be soon.

Pete -- exactly why I don't like the idea of government as insurer. Who do you call to get to help if THEY decide to ration your coverage -- your Congressman?

Jim, doesn't Medicare and Medicaid create disincentives for insurance companies to come up with cheap alternatives in coverage for the poor? If not for them, there would still be a market and a big one. Hospitals could have wards for inexpensive care. We can imagine a range of prices for shampoo or cars or rents or house prices, but we all expect the same tests, the same doctors, the same care when we are in a hospital.

Kate, the question at hand is which social formations make the best available actuarial pools, not which make flawless actuarial pools. Flawless you're not going to get. You are going to find some circumstances where a small business faces a perfect storm of trouble. Of course, those four individuals might depart for another employer in the ordinary turnover you see with any business. You would most assuredly have worse trouble if the pool was made of people who affiliated at their discretion only for the purpose of obtaining insurance.

If you are concerned with the responsibilities of the business or the effect of insurance expenses on labor costs, you might get the cost off the company's books by forming a parallel employee association or company union through which the employees can make a collective purchase of insurance on their own account. Credit unions applying their ordinary membership criteria (often based on current or former employment) might make viable pools.

Kate, one's propensity to consume housing or petty consumer goods varies a great deal according to amenity. The decisions people make over medical care would be based on considerations of risk and reward. As for rationing, as long as our wants exceed productive capacity, there will be rationing. The question at hand is the degree to which such rationing will take place due to price, insurance company practice, or state policy.

AD, I still don't see why people affiliating for the purposes of insuring is a problem. Yes, everyone runs into difficulty at one time or another: accidents happen. Maybe that's part of my point; if, as Pete points out, you are pre-paying for treatment in case of illness or accident. That's true for car insurance, too. Only life insurance insures against the inevitable, the only question there being when it will happen.

It is not as if people forming their own actuarial pools for the purposes of health insurance would be something like a tontine. It is not a winner take all proposition. In addition, if my college class had remained an insured group, our premiums today would be staggeringly higher. That's how it oughta be, because that is real. Dragging young people into mandatory health insurance has the benefit of bringing down the premiums of old people.

I have another story. My dad did not want to retire from his job. He was still working at age 67, was productive, and would have kept working until he was not. He worked in data processing beginning when that meant big boards with charts through mainframe computing and was just adapting to PC's when he was forcibly retired. The cost of health insurance for him was too much for the company to bear, especially when they could get a young computer hotshot who was not "adapting" to the use of new computing systems.

If the pool of the insureds is national, will that mean businesses can ease mandatory retirement? What would that do for SS if people went on working, (not as under current rules) because they could, and most of us could keep working at what we do past 65. Some people couldn't and some jobs really cannot be done effectively when the worker gets older. I quibble like a private person and am not thinking like a bureaucrat. What would happen if, under our national health, that burden on SS was raised? If employers did not have to worry about the cost of insuring the old, would they keep a worker longer?

I can imagine all sorts of implications, but don't really feel like writing any more.

In countries with national health systems, rationing is by governmental bureaucratic fiat. As you know, one of the things driving up the price of health insurance is the various state mandates of what it must cover - a democratic denial of rationing. Economics is about managing about resources. When government overrides that and manages resources trying to overcome economics, it makes trouble, as noted in other posts on the front page. Such things are good for the day, but how to pay for them tomorrow is part of our looming crisis.

I cannot verify the terms of the contract your father's employer had with its insurer or even verify the number of employees his firm had. I can tell you that the mean consumption of medical services by persons over 65 years of age is about $18,000 per annum. Given that your father was 67 years old and well enough to work, I will wager his was lower. The mean for the general run of the working age population is $4,800, and the general run of the working population is not eligible for Medicare. Somehow I do not think the cost of his insurance was 'too much for the company to bear'.

Adverse selection is a problem for voluntary pools.

Kate, I'm not as sure about government not providing health insurance services. Depending on the structure of the program, it could prove better (and more consumer and market-driven) than our current "private" system which is distorted by government subsidies (not always visible) and mandates. David Goldhill suggested transitioning to a more HSA/catastrophic coverage system. Mitch Daniels seems to have done okay with a government-provided program of HSAs and catastrophic coverage for state employees. I'm not ready to say that the whole system should be transformed in such a direction (there would be lots of details to be worked out and that model might not work for every population) but I'd like to see work done in that direction.

In any case, I haven't heard of any policy suggested by any conservative with real hopes of implementing it that did not include either significant government subsidies (if only in the form of tax credits) or forced savings. I think Avik Roy (it might have been Yuval Levin) suggested transitioning Medicaid to a system of subsidized, private, high deductible insurance. All those policies should be looked and the final answer might be a combination and with lots of policy nuances that haven't been thought of yet since implementation would inevitably raise new questions.

Replying to Kate, "...doesn't Medicare and Medicaid create disincentives for insurance companies to come up with cheap alternatives in coverage..." Most emphatically YES! Up to the time I reached age 65, I was covered by my employer's health insurance (I retired at 57 in 2002). The month I reached 65, my employer coverage terminated - why? Because I became eligible for Medicare and my employer could turn me over to the government and save the cost of my health insurance. This will also happen with Obamacare, since dropping employee health insurance, putting employees into the government program, and paying a penalty will be cheaper (unless the fine is raised substantially) than maintaining health insurance coverage. BTW, when you hear "pundits" say that since a lot of seniors are on Medicare and don't want the program cut, they must be in favor of government health insurance. They are in the case of Medicare, but that is only because they have no other choice - unless of course you work for the government or a large union with gold plated coverage that continues beyond age 65. Push comes to shove, I would have prefereed to keep my employer's policy, not go on to Medicare.

I don't know that the same is true of Medicaid, but by implementing a few "no cost improvements" like the elimination of state mandates and beefing up HSA's, the cost of providing insurance could be driven down and some people on Medicaid could actually afford their own insurance. Another factor is that, depending on the State, many people are eligible for Medicaid up to 4 or more multiples of the poverty level income. This brings them into the $80,000 annual salary range, and they should be able to afford catastrophic coverage and contribute to an HSA at this level. The same would apply to approximately 1/3 of the "44 million uninsured" who have incomes above $75,000.

Yes, I agree.

Yes, implementation of anything interesting to conservatives is extremely unlikely at the moment. Maybe an aggressively more conservative Congress can try these new ideas as there is likely to be increasing panic as Obamacare begins to destroy the current system. it will cause a crisis that the right can exploit. I cannot believe I am talking about that as a good thing.

Hi Pete,

Coincidentally, I wrote something about this today, advocating the Swiss health care system as a model for the U.S.:

http://www.nationalreview.com/critical-condition/242395/ezra-klein-paul-ryan-avik-roy

To which, on Twitter (http://twitter.com/ezraklein), Ezra Klein said, "If any Republicans would like to propose a national version of Swisscare, I'd be for it." I told him I'd work on it.

We need reform but not a takeover of the entire system. We know the government's track record.

Increased utilization of HSAs might just do the trick. Too easy, I guess.

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