Good Riddance to "Ahnold Care"

California Gov. Arnold Schwarzenegger's ill-advised attempt to Californize (as compared to nationalize) health care has failed. As I explained a year ago, Governator's plan would basically make more Californians wards of the state as he dramatically expanded the number of residents who would be covered by Medical, the state's version of Medicare.

On Monday, the California State Senate's Health Committee voted down the governor's proposal because it would have made the state's $14.9 billion budget shortfall much worse. In one of the more ironic twists, the Los Angeles Times reports:

"It doesn't matter if there are these good things in the bill if there isn't the money to pay for them," said Sen. Sheila Kuehl (D-Santa Monica), who chairs the health panel and has proposed that the state take over the role of providing medical insurance. "We can't simply say to the people of California, 'Go buy insurance.' "

This is the same Sheila Kuehl who wants to impose a state-run single payer health insurance scheme on Californians. Instead of telling Californians to "go buy insurance" Kuehl would simply impose a new health insurance tax, ah, "premium" on all Californians and then bureaucratically ration the medical care they would receive.

Individual health insurance mandates have some merit, but not the Rube Goldberg schemes masquerading as individual mandates proposed by Gov. Schwarzenegger, and former Gov. Mitt Romney (R-Mass.), nor those of Democratic presidential hopefuls, Sen. Hillary Clinton (D-N.Y.) and former Sen. John Edwards (D-N.C.)

My proposal for private mandatory health insurance here.

Comments

[Ken Shultz]

My initial response as a Californian is, "Thank God." My reaction as someone who knows and cares about people in other states is "Look out."

Arnold getting shot down on this should make him quite popular, and I can't imagine why demagogues* everywhere wouldn't imitate him.

*demagogue in this case is defined as someone who doesn't care about good public policy for its own sake.

[Cesar]

Its should be called ShriverCare. From what I understand she pretty much formulates policy for that administration now.

[Aresen]

Instead of telling Californians to "go buy insurance" Kuehl would simply impose a new health insurance tax, ah, "premium" on all Californians and then bureaucratically ration the medical care they would receive.

I am there, doing that.

14 months wait for a simple hernia operation.

2 months wait for "emergency" eye surgery.

[kerem tibuk]

"My proposal for private mandatory health insurance here."

Private and mandatory?

Mandatory, meaning "if you don't comply we will shoot you"?

WTF?

I thought Reason was a libertarian magazine not a fascist one.

[Ken Shultz]

Incidentally, I saw, I think it was an "American Experience", show on PBS the other night about Sargent Shriver.

...if there isn't somebody already writing a screenplay for a Ron Howard directed film about Shriver's life, with Shriver played, of course, by Tom Hanks, then I'd be mighty surprised.

[brotherben]

The problem is caused by 2 things:
taxes in Califrnia are way too low, and the illegals aren't holding up their end by avoiding taxation.

FREE EVERYTHING FOR EVERYONE! it's the only fair and christian way. It is what God wants.

HUCKABEE/JESUS 08'

[Nick]

Minimal coercion? So If I don't buy the mandatory insurance, what happens to me?

[Click \'n\' Learn]

The wider issue is where Reason could make themselves useful for a change. I'm not familiar with what the various types of these plans entail, and the MSM is never going to present a true telling of the upsides and the downsides of each.

So, what Reason could do is hold discussions of this featuring people from all across the spectrum who would hold very contentious debates - not just friendly chats - designed to sort it out.

This is about the fourth or fifth time I've suggested something like that, but I guess Reason has better things to do.

[Chris Potter]

I thought Reason was a libertarian magazine not a fascist one.

Ron Bailey has a lot of unlibertarian positions. I think they just keep him around because he matches the furniture.

[MikeP]

taxes in Califrnia are way too low, and the illegals aren't holding up their end by avoiding taxation.

That must explain why no other state has a health care problem.

[Ken Shultz]

Actually guys, there's more than one way to have mandatory insurance, and some of them are more libertarian than others.

There's more than one way to have mandatory auto insurance; there's more than one way to have mandatory flood insurance; there's more than one way to have mandatory fire insurance and there's more than one way to have mandatory health insurance.

...and in all cases, some of them are more libertarian than others. If you can't handle a discussion about that, don't blame Ron Bailey. Blame your teachers or your parents.

[MikeP]

For the anti-mandatory insurance position, see Michael Cannon's Anti-Universal Coverage Club.

[Alice Bowie]

I think we should just leave the Healthcare system just the way it is.

Just one change. FORCE INSURANCE COMPANIES TO PAY FOR ALL CLAIMS...if the policy holder has paid the premiums in full.

STOP Insurance Companies from DISALLOWING ANY CLAIMS...PERIOD.

That requires NO money, no re-vamping of laws. etc.

[anon]

Arnold proposes something that creates more budget deficit? Is he just Gray Davis with muscle?

[TrickyVic]

The idea of health insurance is sold as if helps solve the problem of how do I pay for ever increasing cost of health care. It does not necessarily address the the problem of ever rising health care costs, which is the core of the problem.

Why should we mandate people to pay outragous insurance premiums? Why is forcing the people to pay up better then forcing the doctors to charge less? If we are going to pass a law forcing action, lets pass a law that addresses the cost of medical care.

I do kinda like the idea of getting rid of employer provided health care, then they will have no real reason to discriminate against smokers.

Insurance is a distribution of wealth anyway, those who pay in and not use the service, pay for those who do.

Health care is a tough issue.

[Hat Trick]

That requires NO money

Uhhh, really? Not sure how the logic flows here, but requiring insurance companies to spend more money surely must require money at some point in time.

But then again, I went to a public school so maybe I'm missing something.

[squarooticus]

My proposal for private mandatory health insurance here.

The very notion that this statement was vomited by a self-proclaimed "libertarian" is ridiculous. Either he didn't really write that, or he's not a libertarian. There really isn't a middle ground here.

[Paul]

"It doesn't matter if there are these good things in the bill if there isn't the money to pay for them," said Sen. Sheila Kuehl (D-Santa Monica),

But it's not about providing people care, it's about providing them access to care.

Come on into the buffet! It's free. We'll have food on the table...someday.

[Dog bites man]

To end the plight of the uninsured, we mandate all people buy health insurance.

Next crisis: the plight of the underinsured.

[Russ 2000]

That requires NO money, no re-vamping of laws. etc.

Let's ignore the economic stupidity of the statement and realize that your re-vamping of laws "requires no re-vamping of laws"...

[The Wine Commonsewer]

Chris, I've heard Bailey is a hell of nice guy and he likes red wine.

My take, although unexplained by Mr B, is that the mandatory part is to make the plan palatable in the same way our plan to let people opt out of socialist security has to be palatable. IE, if you opt out of socialist security you still must a mandatory retirement plan of some kind.

[MikeP]

Either he didn't really write that, or he's not a libertarian. There really isn't a middle ground here.

I don't think you have to turn in your libertarian credentials when you propose a compromise measure that forestalls the adoption of something as severely statist as single payer health care or the like.

Significant health care reform is coming up fast. I would be thankful for a rampart that stops the momentum -- even if it costs some amount of freedom.

[Jay]

I don't get the comparison between car and house insurance.

Car and house insurance are primarily purchased to protect lenders.

There is no third party interest in health insurance.

Health insurance needs to be returned to the market. I don't see how making in mandatory helps that in the slightest...

[Paul]

Car and house insurance are primarily purchased to protect lenders.

House insurance...yes. Because in this day and age, most people are upside down on their mortgage. Car insurance? Not so much. Initially, yes, of course. But once you've paid your loan off (lender out of the picture), I still want car insurance.

[Ken Shultz]

"Health insurance needs to be returned to the market. I don't see how making in mandatory helps that in the slightest..."

I think he's saying... Let's say you can pick from a number of public policy health plans:

Mandatory Plan A

Mandatory Plan B

Mandatory Plan C

Mandatory Plan D

or, last but not least...

Mandatory Plan E

Just because he comes out and says that, given those choices, he likes Mandatory Plan D, well that doesn't mean he thinks health insurance should be mandatory. ...in any way, shape or form.

He very well may (and I suspect he does) prefer a whole list of other options that are not mandatory, maybe even specifically because they're not mandatory.

...but that doesn't mean good, loyal, red-blooded Libertarians can't have a reasonable discussion about which mandatory plan is best. ...at all!

So can we get back to the topic now?

[Nick]

Alice, there are some insurance companies that deny claims for no reason, ala the Rainmaker, but that is rarely the case. I worked in customer service/claims adjustments for one of the big boys and I'll tell you we denied a lot of claims because the service was not at all covered by a person's policy. That didn't make the customer less angry at us if they really felt they needed the plastic surgery, but if it was medically necessary and covered by the plan, we'd pay it without blinking. Many claims are submitted that are for non-covered services. Read your policy or call to ask. Don't bitch your hangnail isn't being paid. We never said we'd pay for that.

Paying every claim would allow doctors, hospitals, and patients to get paid for every single service whether it was legit or not. That's like shoplifting. It's not what your premiums are for.

Now, I will say there was much regulation that interfered with our attempted cost-cutting measures. That, we can do something about. Vote Libertarian 🙂

[Jay]

Paul-

Here in VA once your car is paid off and gets some age on it, you can pretty much reduce it to just liability coverage.

At least that makes sense- I still don't see it with health insurance...

Jay

[LarryA]

Just one change. FORCE INSURANCE COMPANIES TO PAY FOR ALL CLAIMS...if the policy holder has paid the premiums in full. STOP Insurance Companies from DISALLOWING ANY CLAIMS...PERIOD. That requires NO money, no re-vamping of laws. etc.

Well, you'd have to write a federal law to force the companies to pay claims they hadn't contracted to cover. Then you'd have to change the state insurance laws and regulations that micromanage insurance policies and decide what insurance companies are contracted to cover. Then you'd have to figure out some way to pay for all the health care the insurance companies could no longer pay for, since they will immediately go bankrupt.

Other than that, it wouldn't cost much.

It does not necessarily address the problem of ever rising health care costs, which is the core of the problem.

The cost of health care is rising for three main reasons. First, there is simply more available. We spent a whole lot more on CAT scans in 2007 than we did in 1972 because in 1972 CAT scans had not been invented. Second, since people aren't directly paying for their own health care they have no incentive to economize. Third, the bureaucracy of payment claims, much of it mandated by government regulation, inflates the cost of doing business.

A government health care system that increases bureaucracy and further divides the payer from the product has only one way to cut costs, by limiting the services provided.

"It doesn't matter if there are these good things in the bill if there isn't the money to pay for them," said Sen. Sheila Kuehl (D-Santa Monica), who chairs the health panel and has proposed that the state take over the role of providing medical insurance. "We can't simply say to the people of California, 'Go buy insurance.' "

Where do I get the feeling that Ms Kuehl cares less about the cost, and voted the plan down because it wasn't socialist enough?

[MikeP]

Car and house insurance are primarily purchased to protect lenders.

Not car insurance. Mandatory car insurance is specifically to protect those you might injure. You are not required by the state to carry collision, only liability.

The ostensible reason to make health insurance mandatory is that most people would find it unpalatable not to treat someone who needed care beyond his means -- even if he has intentionally not insured himself.

I don't necessarily like it, but that's the reason.

[Nick]

There are many ways to cut the costs of health care.

-- legalize all drugs.

-- have risk based coverage. Smokers and obsese customers pay more, just like how a 20 year old driving a ferrari pays more for auto insurance than a 35 year old in a minivan.

-- de-regulate.

-- allow insurers to offer all kinds of plans that suit their different customers. Some can pay extra for gym memberships, but some only want catastrophic coverage. Rate accordingly.

-- stop fear-mongering alternative medicines. Some work quite well for many people.

-- allow people to form groups to get better rates. Right now, individuals pay more than twice what large employers pay per employee and for the same coverage.

-- change ERs from "after 5pm sick care" to be actual emergency rooms for emergencies. Build more nearby-to-the-hospital after-hour clinics, charge accordingly.

The above will all reduce the overall costs of care and the increased competition will bring prices or care and insurance down. Anything else? That was just off the top of my head.

[squarooticus]

The ostensible reason to make health insurance mandatory is that most people would find it unpalatable not to treat someone who needed care beyond his means -- even if he has intentionally not insured himself.

Well, more precisely, a combination of the following is probably the reason:

(1) people find robbery less horrifying than not treating someone who needed care beyond his or her means, and believe (private) charity to be insufficient.

(2) people don't consider taxation to be robbery, find it unpalatable not to treat someone who needed care beyond his or her means, and believe (private) charity to be insufficient.

[Alice Bowie]

Perhaps u guys r right...once again...

What frustrates me is not my insurance company won't pay for my hang-nail...nor will they pay for my tummy-tuck and butt lift. U KNOW EXACTLY WHAT I MEAN

Insurance companies (ALL OF THEM) regularly deny claims and may u play the PAPERWORK Game for MONTHS b-4 paying.

I hope u guys that have SO SO MUCH faith in INSURANCE COMPANIES never FALL sick. See "SICK-O".

Big insurance companies, when faced with a $400,000 claim...will hire special detectives to research ur entire life until they can find any reason to deny the claim

[Nick]

Or should be of in that last paragraph. Big difference.

[Alice Bowie]

Read your policy or call to ask. Don't bitch your hangnail isn't being paid. We never said we'd pay for that.

I read my policy!!! all 60 pages of it.

The Cover reads 100% Coverage For hospitalization. The subsequent 59 pages discuss all of the things that are not in a hospital room. Such as :

- The Doctor
- The Nurse
- The X-Ray Machine
- The MRI
- The medication
etc. etc. etc.

And I'm not talking about a FLAT PANEL 42" TV in my room...It's the things I need to get better.

[squarooticus]

I would be thankful for a rampart that stops the momentum -- even if it costs some amount of freedom.

I think a more apt metaphor is that such a compromise system simply sets a new base on which socialists can build their agenda.

Compromising on core principles is like voting for the perceived lesser of two evils: you still lose, and it isn't clear whether you lose more or less quickly.

I have bandied about the concept of "supporting" the politicians that will bankrupt the US more quickly, but it's unclear to me how long it would take for things to recover sufficiently for me to want to remain here. From that perspective, it's probably better simply to leave and wash my hands of the matter... but goddamn it, this is my home and I don't see why I should be driven from it by an organized gang of thugs.

[Nick]

Alice, I hate to break it to you, but most paperwork issues are not intended to hope you give up and let the insurance company off the hook from paying. They come from many different things, the number one being that your doctor billed for a service that was not covered by your plan. Sometimes they need to rebill but the perfect bitch in his billing office refuses to believe she made a mistake or that the doctor would dare perform a procedure that wasn't covered. "He doesn't do that and I don't make mistakes." If you think I'm kidding or exaggerating, I'd love to have you listen in someday.

While it is true high dollar claims get investigated, that is because some are not legit. But, many are and they get paid upon review. That's just sound business and it protects the solvency of your insurance and catches people who are committing fraud which costs millions a year to everyone.

A huge problem is the education of patients, providers, billers, and yes the people who work at the insurance company. Why do you think it is so complicated? If you said "massive government intrusion" you'd be right and you'd be one of a very small few who knows this. Oh, and laywers suck.

[Nick]

In most cases, the nurse gets paid by the hospital, but the doctors, MRIs, medication, etc are not included in the semi-private room rate. They are billed separately or if they are included, they are charged separately. I won't argue that the policy manual probably sucks and is too confusing. But, that starts with the billing process being confusing and convoluted, which is because some legislator from 1989 decided how to make things better for us all. And nothing ever changed. Some HMOs are actually good in many ways (and no you may not take my libertarian card for saying so) but the biggest problem with them is how they mandated billing. It sucks.

Hospital billing is even worse than doctors billing because of the ways things are broken up. A lot depends on your plan, but a lot depends on the competenc of your providers, insurance company customer service, and the billers. Some are very good, many suck. Customer service and billing are not talent based industries that is for sure. But most everyone is a regular person not out to get you. The CEO has very little to do with paying claims.

[Ron Bailey]

TWC: You got it right. I favor mandatory private health insurance as way to prevent the continuing slide to a totally government run system of health care. If my proposal were adopted, all insurance would be privately purchased and poor people would be given vouchers paid for by dismantling Medicaid, SCHIP and even Medicare. What I have in mind is something like the Swiss system.

[just another lurker]

What, nobody's mentioned that Sheila Kuehl was Zelda in The Many Loves of Dobie Gillis?
Sheial Kuehl

Former actress-turned-politician shoots down bill by former-actor-turned politician... ah, Hollywood.

[Alice Bowie]

Alice, I hate to break it to you, but most paperwork issues are not intended to hope you give up and let the insurance company off the hook from paying.

Nick, funny, but I never mentioned what is in bold above. But u must admit, this is a strategy.

Since Insurance Companies are PROFIT DRIVEN, they would be delinquent in their duties to the STOCK HOLDERs not to Deny as many claims as possible.

I'm not being silly or paranoid...and I know fraud goes on rampant. But many people end up really screwed with the Insurance Companies.

I believe that when Insurance companies are MUTUAL OWNED by the Policy Holders...as oppose to being PUBLICLY traded on the NY Stock exchange...and REASONABLE CAPS (let's say $2,000,000) on execute salaries can be set...the situation would be a lot better.

?? Thoughts ??

[Hat Trick]

Alice,

Let's, for a moment, say that you are right and that the insurance companies have no interest in covering their policyholders.

Would you agree that if you, as a policyholder, had more options to switch insurance carriers, you would have more leverage with your insurance company? Right now it's difficult to tell them to F off since insurance is predominantly tied to your employment. Wouldn't making it more portable be a good thing?

[Nick]

Alice, I took you mentioning the 4 months of paperwork game to mean you thought they were giving you the run around. Sorry if that's not what you meant. And when I tell you not to bitch about the hangnail, I'm using the collective "you" that I have spoken to so many times, not you, Alice. I'm not meaning to be hostile. On the contrary.

As for the mutuals vs the publicly traded, I do prefer mutuals for the very reason you stated. I think both should be allowed since I think government interference is wrong, but if I were a customer with options I'd choose a mutual because I feel like I would have a stake in my own insurance, not someone else's wealth gathering. When the company I worked for went from mutual to for-profit bad things happened internally. I don't think we did a lot of things to our customers differently, but we cut corners in our operations (not claims payment) and the employees became aggrevated at every little thing. Our customer service slipped because our attitudes changed. But we still paid claims as the policies read. I just didn't like the atmosphere and eventually left.

As for denying claims making it profitable for stockholders, I disagree...usually. It would be detrimental to a company to deny claims to save money because that's not how health insurance companies make money. They need to be a positive corporate citizens and make customers happy to grow their business and increase profits. Since most people despise them because of the reasons we discussed, it behooves them to pay claims and make people happy. This generates growth by word of mouth at how good they are.

The premiums pay salaries and claims, but between the time the January 2007 premium was received and the December 2007 claim was paid they had 11 months to invest the premium and collect interest. That's how they make money, not by charging more than they pay out. The profit is made based on their premium before payout. So, the more premium they collect as a positively viewed company, the more they have to invest and collect interest on. Mutuals and public insurance carriers do this. The difference is in that public companies can also sell stocks for profit, but they change their internal practices which sometimes backfire.

[Alice Bowie]

YES....Hat trick

I wish I had more options. It would be so so so much better if the Insurance was dismembered from my employment. I would not mind if I paid a TAX (similar to FICA) that could be applied to any insurance product that I wanted.

Nick...

The insurance know that they can PISS ALL OVER US...since they are OLOGOPOLIES...and they all work 2-gether...and I have absolutely NO where to run to.

If i had no money, no retirement funds, no homes, i wouldn't really care. But if i ever get terminally ill...it's probably better for me to drive my car into a tree...let my wife/kids collect the life insurance...than to have the hospitals/doctors/etc. come take the it from my estate (my family).

[R C Dean]

FORCE INSURANCE COMPANIES TO PAY FOR ALL CLAIMS

IOW, throw away the insurance contract, and give everyone a hammer to break open the insurance company piggy bank.

Estimated time to mass bankruptcy of health insurance providers - 3 months.

[Bill Pope]

Ron, you continually assert that medical innovation would dry up under a single payer system but how much do health insurers actually spend on research? It seems most research is financed by pharmacuetical companies, medical device manufacturers, government or private philanthropy. If you have studies (peer reviewed, please) that show otherwise, please let me know.

The problem with healthcare that libertarians refuse to acknowledge is that it represents a market failure since no one is competition to cover people with poor health histories. If you believe that vouchers are the way to go to cover the poor, try pricing ones that would:

1) require little or nothing in the way of copays or deductables
2)cover all conditions regardless of previous health history
3)set no limit on lifetime coverage

I wouldn't be the least bit surprised if it ends up costing more per person than Medicaid does now.

I'm Canadian, but my wife is from the US, and requires ongoing medical treatment. She's lived under both systems and prefers the one here (she had to threaten to sue her HMO to get some tests done). Yes, there are waits within our system but trying going the the ER of most hospitals in the US (especially in the inner cities) and see how quickly you get treated, and you'll also find wait lists for some elective surgeries as well.

The Canadian system isn't perfect but it provides longer life expectancy at lower cost with no medical bankruptcies, and I'll take it any day.

[Ken Shultz]

"Estimated time to mass bankruptcy of health insurance providers - 3 months."

There's no way they'd last that long. They wouldn't make it through the next day of trading.

[Mike Laursen]

The problem with healthcare that libertarians refuse to acknowledge is that it represents a market failure since no one is competition to cover people with poor health histories.

Lots of libertarians would acknowledge that. Of course, insurers don't want customers with little money and poor health histories. It's a huge jump from acknowledging this limited market failure to concluding that we have to have a single-payer system.

If you believe that vouchers are the way to go to cover the poor, try pricing ones that would ... I wouldn't be the least bit surprised if it ends up costing more per person than Medicaid does now.

The problem with your argument is that you didn't do what you ask Bailey to do: "try pricing [vouchers] that would..." You just assumed an answer that suits your preconceptions. Maybe vouchers for a limited number of hard cases would be less expensive than providing health care for everyone, including those who can afford to pay for their own health care.

That's one thing that scares me about a huge, monolithic Federal health insurance program. It kills all possibility of trying alternative models. Soon, our society can't even remember a time when there were alternatives. It's a really bad idea to deal with market failure of limited scope by completely closing down the market.

[Kevin Carson]

I think it would probably be easier to genuinely privatize and marketize the British National Health Service than the kind of corporatist "private" system Ron Bailey promotes. It would require only decentralizing the NHS and reorganizing individual facilities as consumer cooperatives.

On the other hand, eliminate drug patents and the professional licensing cartels, and most healthcare finance will cease to be a major problem even under the present system.

[Nick]

"But if i ever get terminally ill...it's probably better for me to drive my car into a tree...let my wife/kids collect the life insurance...than to have the hospitals/doctors/etc. come take the it from my estate"

If you're terminally ill, then you are going to die anyway, so yes it would be better for you to kill yourself in any simple manner that suits you. Why put your family through the drawn out heartbreak and pain of watching you die? Why bleed your fellow man of his insurance you all share? Do us all a favor.

Now, if you can be cured...not just prolonged in a state of agony but...cured, then there is an interest to you and your family to get cured. Proceed.

[Nick]

"The problem with healthcare that libertarians refuse to acknowledge is that it represents a market failure since no one is competition to cover people with poor health histories."

Whoever said libertarianism is all about capitalisim? Market failures because there is no market for providing care to the poor and unhealthy is what charity is for. We still care about our fellow man, so we give to charitable organizations that help them. This would still occur.

Additionally, the insurance carriers that set up their own such organizations with a portion of their profits, will get good publicity (so maybe there is a market for helping people) since now they are competing for every customer rather than the lesser numbers of employers they looked for before. The successful companies will become successful because they do things that please their customers.

Government care is only going to do what is best for politicians.

[juris imprudent]

I believe that California Democrats discovering fiscal responsibility is one of the signs of the End Times.