The Government Won't Force You to Change Your Health Insurance (But It Might Give You a Strong Nudge)

Peter Suderman | June 23, 2009

In a press conference this afternoon, President Obama seemed to tacitly allow that, if health-care reform includes a government-administered "public option," many Americans will end up on plans other than those they're on now. Previously, Obama had argued that Americans would not be forced off their current plans, saying that they would always have a choice to stay with their current provider. He's sticking by that story, but in the press conference today, he clarified to say that what he meant was only that the government would not directly require anyone to switch plans: "What I'm saying is the government is not going to make you change plans under health reform."

That's true enough. But even if the government doesn't require you to change your plan, structural changes in the health-care system would likely move many away from their current insurance provider.

How might this happen? In some cases, it might simply mean that individuals, particularly those currently paying the entire cost of their health-care premiums, would choose to switch to the government plan because they believed it better fit their needs. In other cases, employers might decide to stop offering their current health-insurance options, preferring their employees purchase health insurance elsewhere. How often employers might choose to do this would depend on yet to be determined details of the "pay-or-play" employer mandate, which would require employers to either "play" by providing insurance to employees or "pay" by paying into a system that helps fund public health care. Right now, only two of the three notable bills making their way through Congress have an employer mandate, and on one of those, the details — such as how much employers would have to pay — are blank.

Obama's statement isn't surprising given that a Lewin Group study recently pointed out that, depending on the details of the plan, anywhere from 10.4 million to 119.1 million people could end up switching from their current plans. Reform advocates continually stress that this would only be by choice, but that's only sort of true. Depending on how the employer mandate is structured and what regulations insurance companies end up subject to, many of which would surely raise the cost of premiums, it's almost certain that some number of people would end up without access to a plan they currently have and enjoy and, instead, get stuck with a plan they like less. (And of course, by the same token, others will end up with plans they like more.) The President's remark wasn't a game changer by any means, but it does serve as a reminder that any overhaul as massive as what he's championing will inevitably create some losers, including some people who no longer have access to plans they like and the networks of doctors and providers that come with them.

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I\'m Fucking Sick!|6.23.09 @ 2:54PM|#

Stop. This. Fucker.

|6.23.09 @ 2:55PM|#

Big business wants to dumb their employees onto a publicly funded plan. That is what this is about as much as anything. Right now, you have to offer health insurance or you have no hope of attracting good employees. But if business can get Obama to come in and regulate private insurance out of existence or at least make it prohibitively expensive, then no business can afford to provide health insurance. Thus all businesses will be able to dump their employees onto the crappy Obamacare plan without losing competetive advantage. As much as anything, socialized medicine is about big business figuring out a way to use the government to fuck their employees.

|6.23.09 @ 2:56PM|#

STOP CALLING IT "THE PUBLIC OPTION!" NOTHING STAYS "OPTIONAL" IN OUR SYSTEM. EVER.

Sorry about that, but it's been building up in me.

|6.23.09 @ 2:59PM|#

Leftists hate people providing for themselves. It drives Obama nuts that people are able to get healthcare from their jobs rather than the government. That has to be stopped in his warped view of reality.

Naga Sadow|6.23.09 @ 3:02PM|#

John,

To be fair, employer provided healthcare is just wage deferral on the business's part. Personally, I would rather have my wage upped rather than get healthcare from my employer. I would have found a plan just as good or better. Unfortunately, Obama's gonna cut into ALL healthcare plans!

Seward|6.23.09 @ 3:03PM|#

I would just note that one of the reasons that so many people have employer provided health insurance is due to the tax favorability afforded to such plans. So the government has been pushing and pulling in this area for some time. I think that the whole debate ignores questions like whether we should be pursuing an insurance model for most health care in the first place.

Stop Obama Now|6.23.09 @ 3:04PM|#

Obama Health Plan = Free Showers (and a free train ride to them)

|6.23.09 @ 3:12PM|#

"To be fair, employer provided healthcare is just wage deferral on the business's part. Personally, I would rather have my wage upped rather than get healthcare from my employer. I would have found a plan just as good or better. Unfortunately, Obama's gonna cut into ALL healthcare plans!"

Of course if you get your wage hiked you have to pay taxes on it. That is another reason Obama hates private insurance so much. There is all that money being paid in the form of health insurance that he can't get his grubby little hands on. It is an interesting mircro economic question how much of your employers savings in not giving you health insurance you would get in in increased wages and how much he would pocket. You wouldn't see all of it and even if you did, the Obama would take a third of it off the top in income taxes.

Even after you collect your money, you would still have to pay extra taxes to support Obama care. Then of course you would have to pay to get the Obamacare insurance and the right to be treated in a horrible public run system run with all the efficiency and kindness of a big city public school system. Anyone who could possibly afford it would just settle for being poor and paying huge rates to opt out of Obama care system and go to private sector. Any way you look at it, the rat bastard and his cult of supporters mean to do you harm

|6.23.09 @ 3:13PM|#

I personally think that all civil service employees should lead the way in choosing the government provided health insurance plan. That would include congress and of course these folks.
And these.
And these

Xeones|6.23.09 @ 3:14PM|#

Free Showers (and a free train ride to them)

This one got Godwinned quick.

I'm with Naga. Health insurance should be handled the way car insurance or any other type of insurance is. Oh, and end paycheck withholding already.

|6.23.09 @ 3:16PM|#

Screwed up a link due to a mild case of SugarFreeitis. The second link should go to here.

Grandpa Whithers|6.23.09 @ 3:17PM|#

"Obamacare"

If he is successful, this will prove to be one shitty facet of his putative legacy.

|6.23.09 @ 3:19PM|#

"I'm with Naga. Health insurance should be handled the way car insurance or any other type of insurance is. Oh, and end paycheck withholding already."

First, there is nothing to say that I can't contract with my employer to make health insurance a part of my wages. Indeed, it makes sense for me to do that since as a big purchaser he can probably get a better deal than I can alone. What you are really talking about is taxing insurance benefits like regular wages. That is okay in theory. But in practice it would amount to a massive tax increase. No way would Congress offset the increase in taxes by lowering other taxes or income tax rates. They would just declare health insurance taxable income and take more of our money. Given that, I would prefer to keep things as they are.

KingShamus|6.23.09 @ 3:19PM|#

Health care reform under this president will surely lead to rationing. As Dick Morris said, socialized medicine will mean the American people will finally be told 'NO' by their government. They will be denied care for various politically fashionable reasons-they smoked, they drank, they were overweight-but in the end, they'll still be prevented from receiving services.

If the American public are made to understand that simple fact, they would reject Obama-care in a heartbeat, even if it is a slightly irregular rhythm due to constant ingestion of Kentucky Fried Chicken.

What it boils down to is that Americans want to live a certain way, while their 'betters' in government would very much like to herd the masses into a far more subdued lifestyle. The enviromental movement would love to see everybody cajoled into cities where they'd be forced to use mass transit, have no cars and live in tiny apartments. Same goes for health care. If they control how and when you access health care providers, they basically control you.

|6.23.09 @ 3:20PM|#

Screwed up a link due to a mild case of SugarFreeitis.

Get that treated soon rather than later. Trust me.

|6.23.09 @ 3:21PM|#

"What it boils down to is that Americans want to live a certain way, while their 'betters' in government would very much like to herd the masses into a far more subdued lifestyle. The enviromental movement would love to see everybody cajoled into cities where they'd be forced to use mass transit, have no cars and live in tiny apartments. Same goes for health care. If they control how and when you access health care providers, they basically control you."

That is right. Government control of healthcare is all about government control of people.

|6.23.09 @ 3:23PM|#

Considering that the public massively disagrees with the experts and studies about how to reduce health care spending, it seems impossible that the plan will be able to both make everyone happier and actually reduce health care costs.

The President is lying. Admittedly, the American people want to be lied to, but he's still misleading and exaggerating.

|6.23.09 @ 3:29PM|#

Thacker, just who are these "experts" who are so convinced that so much care is uncessary? Is it perhaps the case that in this case as in most cases, the experts are full shit?

|6.23.09 @ 3:30PM|#

I won't even bother stating my thoughts on this.

Your all welcome. Peace out.

|6.23.09 @ 3:35PM|#

Don't forget the big, big driver that will end private insurance as we now know it for many companies/employees: taxing employer-provided health insurance.

Sure, sure, we shouldn't have ever given a special tax break for this benefit. But taxing people who take employer-provided plans will drive a lot of people to drop those plans. It will also reduce the value of those plans to employers, leading them to drop the plans from their end.

I personally think that all civil service employees should lead the way in choosing the government provided health insurance plan.

True dat. I wanna hear the howling from the public employee unions when Congress mandates that the "public option" plan will henceforth be the health benefit for federal employees. If its not good enough for them, why should it be good enough for the rest of us?

|6.23.09 @ 3:36PM|#

The fucking disconnect on the left is just amazing.

Author spends paragraphs talking about the nightmare of getting something out of Medicare for her autistic brother and then talks about how great Obamacare is.

|6.23.09 @ 3:37PM|#

Thacker, just who are these "experts" who are so convinced that so much care is uncessary?

Estimates vary, of course, but a significant percentage of health care services have no clinical purpose, but are "defensive medicine" intended to inoculate the provider against malpractice suits.

Yet, oddly, no one in Washington is talking about tort reform.

"Sure, sure, we shouldn't have ever given a special tax break for this benefit. But taxing people who take employer-provided plans will drive a lot of people to drop those plans. It will also reduce the value of those plans to employers, leading them to drop the plans from their end."

That is the idea RC. That is why big business loves this idea. This whole thing is the demon step child of the alliance from hell between corporate assholes and leftist assholes.

Kevin|6.23.09 @ 3:38PM|#

"I'm with Naga. Health insurance should be handled the way car insurance or any other type of insurance is. Oh, and end paycheck withholding already."

The biggest problem people have with health care is cost. I think a lot of the problem is that health "insurance" is no longer insurance in the usual sense of the word. Insurance is supposed to cover emergencies, not everyday stuff. Think how expensive car insurance would be if it paid for oil changes and new tires. Or how expensive homeowners insurance would be if it paid for a new furnace and a paint job every 5 years. The health insurance industry has bastardized the whole process. If we were forced to pay for all the routine stuff like checkups and colds out of pocket, we'd be a lot more careful with our money and prices would go down due to competition. Do we have a national car insurance or oil change crisis? I rest my case.

Also, the American mindset is totally against limits to what health care will be provided. We elevate people like Lance Armstrong, who fight diseases full force without regard to cost. I can't see any American accepting a system where they are prohibited from receiving treatment based on a cost/benefit analysis.

|6.23.09 @ 3:38PM|#

Sugerfree,

You have to understand that in the mind of the leftist, the next plan or government program is going to be the one that works. They promise.

|6.23.09 @ 3:40PM|#

"Also, the American mindset is totally against limits to what health care will be provided. We elevate people like Lance Armstrong, who fight diseases full force without regard to cost. I can't see any American accepting a system where they are prohibited from receiving treatment based on a cost/benefit analysis."

So we should encourage the sick to just do us a favor and just die? Your statement is a good example of why government run healthcare scares the hell out of me. Government bureaucrats will be interested in saving money and the ethos will go from saving people to making sure we all die with dignity without spending too much money. Socialized medicine is nothing but a killing machine.

Mike Laursen|6.23.09 @ 3:45PM|#

Health care reform under this president will surely lead to rationing.

Probably, but because we now live in a globalized, jet-traveling world we'll also see a twist on the classic socialized health care scenario: more Americans heading off to Singapore for operations, retirees moving to managed-care homes in Costa Rica, and who knows what else.

|6.23.09 @ 3:45PM|#

"Estimates vary, of course, but a significant percentage of health care services have no clinical purpose, but are "defensive medicine" intended to inoculate the provider against malpractice suits.

Yet, oddly, no one in Washington is talking about tort reform."

True enough.

Fascitis Necrotizante|6.23.09 @ 3:48PM|#

I couldn't handle that feministing link. If it's some great shit like how men take up too much space when they sit down or it's "ableist" to use the word "lame," I get a kick out of it.

But I can't handle lefty sites at all anymore when it comes to actual politics/policy. To sift through the kind of idiocy that will actively seek to destroy things that work, the stuff that makes sure that Things Fall Apart and the Center Cannot Hold... I just don't have the patience for it anymore. (Although some commenters there weren't beyond-the-pale unreasonable.)

This has only really started happening to me over the last few months. It used to be I could read left-liberal arguments patiently and respond to them seriously, but now I just don't give a shit. It's too frustrating. I just need to get me one of them compounds in the woods and fuck this shit.

|6.23.09 @ 3:52PM|#

Except that tort reform does very, very little to reduce insurance costs... in truth, it really does nothing but fuck people over when they suffer serious injuries at the hands of doctors.

|6.23.09 @ 3:53PM|#

"This has only really started happening to me over the last few months. It used to be I could read left-liberal arguments patiently and respond to them seriously, but now I just don't give a shit. It's too frustrating. I just need to get me one of them compounds in the woods and fuck this shit."

I have the same problem lately. I have close friends from college who are intelligent well meaning people but there is no talking to them about this stuff anymore. Part of the problem is that they are so thoroughly indoctrinated to a set of facts and assumptions that there is no reasonable way to respond to them. They say things like "the UK and Canada have cheaper and much better healthcare systems than the US" or "cap and trade will save us money because of the harm it will prevent through stopping global warming" or "the US will save money if the government takes over healthcare" as if such propositions were handed down from God. When you start to point out how false these assertions are, you are immediately dismissed as a foxnews watching right wing nut. There is a certain set of fantasy facts that all leftists agree about. There is just no agrueing with them.

|6.23.09 @ 3:54PM|#

"Except that tort reform does very, very little to reduce insurance costs... in truth, it really does nothing but fuck people over when they suffer serious injuries at the hands of doctors."

Depends on the tort reform. Limiting damages has a bad habbit of fucking people who were really harmed. But, limiting people's ability to sue on bullshit theories does not.

Old Bull Lee|6.23.09 @ 3:58PM|#

Of course you can keep your old plan. Just like you can send your kids to private schools if you want to pay extra for it. Extra because you taxes are already paying for public schools.

Since you're paying for the public schools either way, that's what most people send their kids to so they're at least only paying for one thing.

|6.23.09 @ 4:03PM|#

Well, for two, Peter Orszag and Zeke Emanuel. Pretty much anyone supporting and crafting Obama's plan, along with pretty much anyone else who has studied the problem, such as Arnold Kling among libertarian economists (who emphasize the problems of third-party payment), and then others like Robert Hanson. Both academic studies and reports and articles discuss how various places with seemingly identical demography can have spend 30% more for no better outcomes.

Now, you don't have to agree with it, mind you. Just keep in mind that that's where all the supposed cost savings come from. In my opinion, those cost savings probably do exist, but it's politically impossible to have them come about. Note that the exactly same supposed inefficiencies currently exist in Medicare. If Medicare recipients have the political clout to prevent reforms now, I hardly see how expanding the program to cover more people will lead to reform.

The current tax preferences for employer-granted insurance combined with heavy government regulation (more heavy in states like NY and NJ with community rating) isn't all that different from a public system. We have third-party payments and rationing. It's a little better in some ways because we do have some choice, but it shares problems.

This, to me, actually points to a weakness with Obamacare: the types of savings he's talking about are exactly the sort of things that HMOs tried to do in the early '90s to cut costs, which politicians (largely but not exclusively Democrats) then banned them from doing.

The expert opinion is either right or wrong. But even if it's right, public opinion is so dead set against it that Obama and Orszag's cost savings will never come about.

|6.23.09 @ 4:04PM|#

Old Bull Lee,

By the time Obama is done with the economy and the tax code, there won't be much danger of too many people, outside of course the real political elite, buying their way out of Obamacare. This whole administration is a full court press on the middle and lower middle class. Obama wasn't kidding around when he called them gun clinging dead enders. That is what he thinks they are and he means to put a stop to how they live.

|6.23.09 @ 4:05PM|#

John: it bugs me too When you start to point out how false these assertions are, you are immediately dismissed as a foxnews watching right wing nut. There is a certain set of fantasy facts that all leftists agree about.

And then to top it all off, they have the nerve to call us "utopian"!

|6.23.09 @ 4:08PM|#

John Thacker,

Thanks for the thoughtful response. The problem is that you can't address unneccessary care in a systematic way without falling down a very slippery slope. In the end, even the worst estimates put healthcare spending at 26% of GDP. When you think about it, healthcare is pretty damned important and we are pretty damned rich. There are worse things we couls spend a quarter of our income on.

The One|6.23.09 @ 4:24PM|#

"Do we have a national car insurance or oil change crisis?"

Give me time...

Gimlet|6.23.09 @ 4:28PM|#

"Except that tort reform does very, very little to reduce insurance costs... in truth, it really does nothing but fuck people over when they suffer serious injuries at the hands of doctors."

So all those Lawyer commercials I see on TV regarding Mesothelioma (sp?) are about malpractice by doctors?

Bullshit.

KT|6.23.09 @ 4:28PM|#

One way to significantly cripple the government plan is to do what we have been doing in California. The hospitals here and the doctors offices refuse to accept patients with Medical because the reimbursement is less than the cost of treating the patient. Only a select group of leftie docs will practice with negative income. Of course, eventually the Feds will force us to take these patients, but until then we can try to make the government plan as miserable as possible with wait times and rationing. I would like to see how Obama can decrease premiums and allow every pre-existing condition at the same time. Seems like he's a magician or a god or something. Did anyone notice that in the news conference he said something like "all you free-market advocates...". Isn't the President of the United States supposed to be a free market advocate?

|6.23.09 @ 4:29PM|#

KT,

That is a great plan. Of course Obama and his cult will have a response. There is always a response to horders and capitalists.

kilroy|6.23.09 @ 4:32PM|#

Fuck everyone that isn't paying 100% of their own health insurance cost right now.

I fork out $183 every month for a individual plan with a $3500 deductible and 0% co-pay up to $2M. Why the fuck can't everybody else carry their own fucking weight? Why should people work work for companies that provide healthcare get a tax subsidy via untaxed benefits?

I can guarantee that when this "public option" comes around and I can get crap insurance for $25 I'll be letting all you suckers subsidize me for awhile.

|6.23.09 @ 4:35PM|#

Kilroy,

We are carrying our weight in terms of reduced wages. Yeah, we get a tax break, but no bigger a tax break than other people get for doing things like owning a house or having kids or owning a rental property.

kilroy|6.23.09 @ 4:43PM|#

John,

That makes no sense. If there wasn't a tax break for employer provided healthcare then you'd be carrying your own weight in terms of reduced wages. Your employer can afford to pay you what you are making because he's getting a break on his taxes at my expense.

You're right about the other bullshit subsidies, that doesn't justify this one, it's bullshit too. I do own a house but I'd be willing to see that subsidy go away if *ALL* of them did. I have no kids but most of my property taxes go to fund public schools. Pure bullshit.

|6.23.09 @ 4:45PM|#

"If there wasn't a tax break for employer provided healthcare then you'd be carrying your own weight in terms of reduced wages. Your employer can afford to pay you what you are making because he's getting a break on his taxes at my expense."

But he is paying for my healthcare. The break only reduces his cost, it doesn't eliminate it. If he didn't provide me with insurance, he would have more money to pay me. I am taking health insurance as a form a wages to dodge the taxes. Even still I bet I pay a hell of a lot more taxes than you do. I don't own a house. You ass is sucking off of my tit.

kilroy|6.23.09 @ 5:04PM|#

Like I said, get rid of all the subsidies, mine and yours. You make what you can get paid for your skills in the market and then pay for the healthcare you want out of your own pocket. I'll stop itemizing my taxes and probably pay a lot more in the end than you do. But it will be equitable. Letting a group of asshats in DC decide who gets what paid for by who is bullshit.

As long as I'm paying for other peoples tax breaks I'll take my own but I'd prefer that there were absolutely none for anyone.

Back to Work|6.23.09 @ 5:12PM|#

Insurance is supposed to cover emergencies, not everyday stuff. Think how expensive car insurance would be if it paid for oil changes and new tires. Or how expensive homeowners insurance would be if it paid for a new furnace and a paint job every 5 years.

The problem with this analogy is that the "everyday" medical care has a measurable preventative effect on emergencies. It is therefore in the insurer's interest to not just cover everyday care, but actively promote its use.

This suggests to me that the traditional insurance model is not the correct one for health care.

Fluffy|6.23.09 @ 5:17PM|#

The enviromental movement would love to see everybody cajoled into cities where they'd be forced to use mass transit, have no cars and live in tiny apartments.

Well, strictly speaking, the only reason you aren't already in a city is because the state decided to subsidize the construction of the suburbs and its transportation net. No bigger set of welfare queens anywhere than people who live in the suburbs, babe.

So we should encourage the sick to just do us a favor and just die? Your statement is a good example of why government run healthcare scares the hell out of me.

Well, to be fair, when we call for market discipline in health care we're advocating the use of the price mechanism to restrict the provision of services. The public health advocates want to use rationing to restrict the provision of services. Where we've failed is that we've allowed statists to paint the price mechanism as evil and unfair.

Fluffy|6.23.09 @ 5:22PM|#

Oh, and on the topic of the thread, I hate to defend Obama - particularly on this issue, where I completely disagree with him - but I find this criticism a little disingenuous. I agree with the poster at Volokh who said that claiming that Obama lied about your ability to keep your plan if your insurer pulls out of the market is like claiming that Obama lied about your ability to keep your doctor if your doctor gets hit by a bus and dies. It's pretty clear that Obama's smarmy rhetoric on this point was only intended to communicate that you wouldn't be ordered by the federal government to abandon your own insurance and sign up for a public plan.

GG|6.23.09 @ 5:37PM|#

True dat. I wanna hear the howling from the public employee unions when Congress mandates that the "public option" plan will henceforth be the health benefit for federal employees. If its not good enough for them, why should it be good enough for the rest of us?

Sorry but Section 3116 of the Affordable Health Choices Act specifically exempts Congressional members and all federal employees from participation, poor things.

Dr. Wes: An Open Letter To Patients Regarding Health Reform

'Cause if I weren't laughing I'd be crying!

|6.23.09 @ 5:49PM|#

I agree with the poster at Volokh who said that claiming that Obama lied about your ability to keep your plan if your insurer pulls out of the market is like claiming that Obama lied about your ability to keep your doctor if your doctor gets hit by a bus and dies.

I would agree, except that when Obama drives the bus that kills your insurance plan, then it is a little disingenuous of him to say that you can keep your insurance plan.

I agree with the poster at Volokh who said that claiming that Obama lied about your ability to keep your plan if your insurer pulls out of the market is like claiming that Obama lied about your ability to keep your doctor if your doctor gets hit by a bus and dies. It's pretty clear that Obama's smarmy rhetoric on this point was only intended to communicate that you wouldn't be ordered by the federal government to abandon your own insurance and sign up for a public plan.

No, it's pretty clear that Obama's rhetoric is trying to assuage worry among people who like their current health insurance and their current doctors that it won't change.

I grant that his statement is true under a reasonable interpretation of "the government won't order you to change your doctor, it'll just change the incentives," and that almost self-evidently any reform plan would cause people to change their insurance. (Whether they'll be happy or not depends partially on the level of subsidy involved versus penalties.)

But that's absolutely not what his rhetoric is intended to imply to people. He means to mislead. People want to be misled, because they want Congress to "do something" about the uninsured without it affecting their own insurance.

GG-- also note that union-negotiated contracts in the private sector will also be exempted. The UAW really doesn't want their plan affected either.

|6.23.09 @ 5:57PM|#

Well, strictly speaking, the only reason you aren't already in a city is because the state decided to subsidize the construction of the suburbs and its transportation net. No bigger set of welfare queens anywhere than people who live in the suburbs, babe.

First off, rural farm subsidies and ethanol gives a stiff competition to any subsidy game.

Secondly, no, the suburbs' transportation network isn't subsidized all that much. It is a fairly complicated thing to measure, but on the federal level transportation isn't subsidized (until the last two years), and gas taxes and (to a much lesser extent) tolls in total pay for 70% of all road funding anywhere in the USA. See the FHWA Highway Statistics series. (Though one-sixth of gas taxes are redirected to transit, and then money from bond issues and local taxes replace that.)

Third, the reason so many people are in the suburbs has more to do with land-use planning and zoning than anything else, a lot of which are people intentionally making city living more expensive.

Fluffy|6.23.09 @ 5:57PM|#

But that's absolutely not what his rhetoric is intended to imply to people. He means to mislead. People want to be misled, because they want Congress to "do something" about the uninsured without it affecting their own insurance.

Obama has lied about plenty of things, but I think that calling this a deliberate deception is a little too strong.

Obviously one consequence of virtually any change in health care regulation of any kind will be that insurers will tweak their plans, or enter or leave certain lines of business.

But there are health care plans one could contemplate that would in fact involve ordering the closing of private insurers and the compulsory registration of citizens in a public plan. There are health care plans that would be proposed that would in fact involve the government deciding what doctor you could visit.

If you have a plan that doesn't do that, you're in my view entitled to say that your plan doesn't do that. It's not reasonable to require certainty that all insurers everywhere will keep all of their plans exactly the same before making such a claim. Hell, if that level of certainty is needed, then even the politician advocating no change at all could make the promise in question, because an insurer could choose to leave the market for reasons of its own.

Fluffy|6.23.09 @ 5:58PM|#

Sorry, that should say "not even the politician...etc."

Fluffy|6.23.09 @ 6:05PM|#

gas taxes and (to a much lesser extent) tolls in total pay for 70% of all road funding anywhere in the USA.

So what? That's a subsidy. A tax is collected and is used to create a so-called public good, that would not exist in the absence of the tax.

Third, the reason so many people are in the suburbs has more to do with land-use planning and zoning than anything else, a lot of which are people intentionally making city living more expensive.

Land-use planning and zoning are effectively cleverly designed subsidies for a certain type of development. You can't effectively create low-density communities unless you can control the land use of every member of the community [because I could just build very densely on my property, disrupting your plans]. The mere existence of suburban communities with controlled levels of density is a massive taking and transfer from property owners who would choose to build more densely to people whose preferences run to suburban styles. You can estimate the size of this transfer by calculating how much it would cost you to create a suburb if you had to pay each and every property owner to get them to agree to limit their land use.

First off, rural farm subsidies and ethanol gives a stiff competition to any subsidy game.

That's a fair point. I forgot those guys for a minute.

|6.23.09 @ 6:07PM|#

Obviously one consequence of virtually any change in health care regulation of any kind will be that insurers will tweak their plans, or enter or leave certain lines of business.

Fluffy, I concede that it's obvious and an obvious tradeoff of any plan. However, I don't think that obviousness is a defense. I can't pretend that anytime a politician seems to promise something impossible that I have to let him off the hook because he can't possibly mean that.

He is clearly promising (or making it sound as though he's promising) something that is impossible. He wants to reassure people that if they're happy with their insurance and their doctor, nothing will change under his plan. You're right that he can't guarantee it. But he wants to rhetorically sound as though he's guaranteeing it.

The public wants to believe the impossible on health care. Obama is irresponsibly, but inevitably as a politician, telling people what they want to hear.

|6.23.09 @ 6:08PM|#

So what? That's a subsidy. A tax is collected and is used to create a so-called public good, that would not exist in the absence of the tax.

|6.23.09 @ 6:12PM|#

Fluffy, claiming that transportation funding is a suburban subsidy is an extremely dubious proposition, particularly without data. I admit that there are lots of ways to look at the issue, but the idea that the suburbs are subsidized more per person on transportation needs a lot more supporting data.

|6.23.09 @ 6:14PM|#

And in any case, transportation funding is allocated through various formulae. I agree that they've been tweaked by various Congresses in different transportation bills, so if you'd like to discuss the difference between the formula used in SAFETEA-LU, TEA-21, and other bills, sure, fine.

Urban drivers do end up worse off, but that's because urban areas choose to divert their transportation money to mass transit.

GG|6.23.09 @ 6:27PM|#

GG-- also note that union-negotiated contracts in the private sector will also be exempted. The UAW really doesn't want their plan affected either.

Poor things! (Thanks for pointing that out, John.)

Concierge Care sounds like my cup of tea: A New Plan for Health Care

|6.23.09 @ 6:43PM|#

# Seward | June 23, 2009, 3:03pm | #
# I would just note that one of the reasons
# that so many people have employer provided
# health insurance is due to the tax
# favorability afforded to such plans. So the
# government has been pushing and pulling in
# this area for some time.

Since the WWII era, in fact, across a sufficient number of generations that most people alive today cannot remember when we had anything close to free-market health care.

# I think that the whole debate ignores
# questions like whether we should be pursuing
# an insurance model for most health care in
# the first place.

I couldn't have said it better myself. How can we expand the debate before it is closed off altogether and we all get railroaded into socialized medicine?

By the way, champions of free-market health care need to be careful in what they propose:

# John | June 23, 2009, 3:12pm | #
## "To be fair, employer provided healthcare is
## just wage deferral on the business's part. ## Personally, I would rather have my wage
## upped rather than get healthcare from my
## employer.

# Of course if you get your wage hiked you
# have to pay taxes on it.

Also, depending on whether this wage hike is reflected in your adjusted gross income, you may be aced out of many "means-tested" benefits (e.g., student financial aid or tax credits for college).

I think it is important to break the stranglehold that the employer-provided health insurance plan / Medicare model has on our health care system. But it isn't as easy as saying "hike my salary and I'll finance my own health care."

kilroy|6.23.09 @ 6:56PM|#

JAM,

I think it is important to break the stranglehold that the employer-provided health insurance plan / Medicare model has on our health care system. But it isn't as easy as saying "hike my salary and I'll finance my own health care."

Yes it is. What you earn is what you earn. Nothing needs to be "adjusted" to create a special class, unless you'd like to influence that class to vote for you.

|6.23.09 @ 9:04PM|#

# kilroy | June 23, 2009, 6:56pm | #
# JAM,

## I think it is important to break the
## stranglehold that the employer-provided
## health insurance plan / Medicare model has
## on our health care system. But it isn't as
## easy as saying "hike my salary and I'll
## finance my own health care."

# Yes it is. What you earn is what you earn.
# Nothing needs to be "adjusted" to create a
# special class, unless you'd like to
# influence that class to vote for you.

Says the dictator. The problem of your reasoning is apparently to assume that the right fellow with the right idea can wave his wand and the simple thing now magically exists with all side-effects mitigated.

Of course "you earn what you earn" is the guiding principle. But the problem is how to get there from here. Things are already "adjusted." What is the plan for "unadjusting" them so that your "reform" doesn't leave large swaths of people -- not bums, spongers or welfare queens, but people who work hard for a living, have done their best to mitigate economic harm done to them by government policies -- worse off than before?

If you want to make a change like this, you will need political support. How you structure and sell your solution will have a lot to do with whether you can build enough political momentum to achieve your goal. If your solution doesn't take things such as the existing "means-tested" benefits into account (and the indicators by which the means are tested), you will have a lot of citizens against you right there, because your solution will leave them in a net worse position. If you try to change all the "means-tested" programs so that they take the new health care funding approach into account, then you are biting off an ambitious hunk of difficulty, and you may not be able to marshal sufficient political resources and force during the window of opportunity (which, given Mr. Obama's declared goal to pass health care reform this year, would seem very narrow).

I actually have experience with the scenario you propose, so I am speaking from real life, not theoretically. The point is that your proposal makes people "rich" on paper when they are anything but that in real life. Then the "safeguards" already built into the tax code and benefits programs to keep from sticking it to the middle-class no longer apply, and the government comes down on people who are barely comfortable (or not even comfortable) as if they were living high on the hog. A proposal to do that will simply not fly, however well-intended and theoretically correct it might be.

Kilroy|6.24.09 @ 9:08AM|#

JAM,

You are undoubtedly (from my perspective) correct in that it's politically an unsellable solution. Unlike the vast majority of people I'm willing to make a change that results in a negative net result for me (and others) if it simplifies, clarifies and equalizes the system. See my post above about eliminating the itemized deductions on income taxes which would greatly increase my personal taxation.

I adapt. I believe everyone else could/should also, especially if the rules of how things worked were clear. I believe the solution is simple, getting it implemented is practically impossible.

Fluffy|6.24.09 @ 9:20AM|#

Yes, but that subsidy applies to urban roads and mass transit systems just as much or more so. It's ridiculous to pretend that the transportation network is a suburban subsidy only. Per actual rider, the subsidy for urban mass transit is far greater than anything else.

In the total absence of transportation subsidies of any kind, what sort of development pattern is likely to be favored? High density ones or medium density ones?

Cost per rider is a useful statistic, but we would still have cities in the absence of mass transit subsidies. [The evidence of this is the existence of cities prior to large-scale government managed mass transit.] In the absence of deliberate subsidy and land use control, would we have commuter communities and suburbs? I submit to you that we would not. My evidence for this is the absence of such communities, or their comparative rarity and small scale, prior to state action aimed at bringing them into existence.

Dollar measurements are a less than perfectly relevant statistic if certain types of communities would not exist at all in the absence of subsidy.

|6.24.09 @ 9:23AM|#

I wonder if we can look at other insurance lines to see where this plan might take us.

Seems to me that the hoeowners insurance market in Florida offers us some instruction on what happens when a state run insurance offering subsidized insurance at below market rates in a state where the insurance markets have been manipulated by the state for years already.

|6.24.09 @ 5:57PM|#

Kilroy: It's not just that the solution can't be sold politically. You (or whoeveer) may already, unwittingly be "benefitting" from means-testing based on the current arrangement. If the arrangement changes, you may find that the increase in your salary, which you hoped would allow you to self-finance your health care, must now, instead, go to pay higher taxes because you are now considered "rich" and no longer qualify for middle-class "tax breaks." Or maybe your kids are getting some form of college financial aid -- scholarships established by private funding and not based on taxes, but predicated on "need" as well as academic performance -- for which you no longer qualify because you are now "rich." If the benefit or tax immunity you were receiving were larger than the increase in salary you got, you would end up in a worse situation than before.

To make your proposal "breakeven," at a minimum, while making minimal additional changes to the current regime, I believe we have to say that money spent on health care is not only not subject to tax, but does not even count as "income" for tax purposes (or any other purposes, such as means-testing).

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