The Insurance Dilemma (Jerry Pournelle on Newt, Mitt, and the mandate)

No one seems to listen to anyone when it comes to health care policy. Mitt Romney was in favor of something that looked like Obamacare in his state. Down with him. Newt once said something in favor of requiring everyone either to buy health care insurance or post a bond to be forfeited if you get medical expenses you can’t pay. Down with him.

But the real world is a bit more complicated. Romney never said his program would work outside Mass. It doesn’t work all that well within Massachusetts either, but that’s another story. As Romney tries to say, but is never allowed to finish his discourse, the state was already paying for what amounted to universal health care; his plan was to try to get some money out of those who were taking advantage of the state’s generosity and its well equipped public and academic hospitals and clinics which were being bankrupted by having to treat all comers, rich or poor, insured or not. The actual situation in Mass. was a bit more complex than that, but it’s not all that bad a summary of the situation Romney faced as governor.

Newt’s statements on the subject come from similar analysis. If the hospitals can’t turn anyone away, then they can’t stay open without some kind of public subsidy. If the public laws impose the requirement that all hospitals with working emergency rooms must accept all incoming patients regardless of their financial or health conditions, then the hospitals must either raise more money or go out of business. Some have solved the dilemma by closing their trauma centers: they remain as hospitals, but they don’t have emergency rooms any longer. In Los Angeles County some eleven have closed in the last decade.

If you pass a law requiring insurance companies to provide insurance to all applicants without regard to pre existing conditions, you have doomed the insurance company. Who in his right mind would buy an insurance policy while healthy? The rates will be very high if set realistically, so the incentive to pay that rate is very low. And why bother? Wait until you get the cancer. Then rush out and buy the most generous insurance policy you can find. Wait until you get sick, then buy insurance; don’t pay those rapacious capitalist corporations while you’re healthy. You’re entitled to insurance at the same rates whether you have pre-existing conditions of not. Take advantage of that, and if you’re not smart enough to figure that out, there will be plenty of people hanging around to explain it to you, often with a scheme of their own.

Newt’s proposal to require all those who don’t buy insurance to post a bond to be forfeited if you need public financed medical care is of course an alternative to what he has advocated for twenty years that I know of: A Medical Savings Account. The Bond would sit there and gather interest, it would not be taxed, and it grew you might from time to time take something out of it. How it differs from a medical savings account isn’t all that clear. I don’t think it’s a very good idea largely because it isn’t clear what happens to the bond – can you leave it as a bequest? Or must it be spent in your last year of life? But it’s not ridiculous on the face of it. It doesn’t address the problem of what happens to those who can’t possibly pay the bond, just as Medical Savings Accounts don’t fully address that problem, but those are details. The idea is to give the patient a stake in the medical payment game. It should cost the patient something – an increase in his Bond, or a reduction in his Medical Savings Account – whenever he gets a medical treatment or a medical device or a medical consultation.

Free medical care is not free, of course. In some countries it’s simply paid for by the government and financed by taxes; this is the exact equivalent of requiring everyone to buy insurance whether they want to or not, although of course that can be manipulated by progressive taxes – which is one of the problems with “free” health care. There is no limit to the demand for a free good, and the costs multiply without limit. There’s no incentive for the patients to limit the costs, and usually not much more incentive for the medical staff from doctors on down to limit them: they’re going to get paid the same amount no matter what. Medical savings accounts (or adjustable bonds which you must pay if you don’t have insurance) are intended to address this. It doesn’t always work.

In my case I have co-payments. Interestingly, I had co-payments to Kaiser until they determined that my problem was brain cancer and a treatment was decided on. After that there were no co payments, and indeed even the parking was free during treatments, until the cancer was pronounced cured. Now I make a co-payment when I go see my physician, and I pay my own parking. That all works for me: the co-payment keeps me from wasting the physicians’ time, but it’s not so high that I hesitate to go see them if I have any doubts.

We aren’t going to solve the medical payment problem – who is obliged to pay for whose medical treatments, and is there any limit to your obligation to pay for my treatments? — in this afternoon’s essay. But we certainly are not going to solve the problem by setting up a series of shibboleths.

Facts of Newt changing positions on this issue. Quite contray to the spin about it

http://www.newsmax.com/Headline/gingrich-health-care-insurance/2011/05/15/id/396426

Gingrich Backs Obamacare’s Individual Mandate Requiring Health Insurance (May 2011)

http://www.weeklystandard.com/blogs/gingrich-obamacare-and-individual-mandate_607924.html

Nov 2011

In response to a follow-up question from Charles Krauthammer about whether he opposed the mandate as a matter of policy or constitutionality, Gingrich replied, “I believe that it is unconstitutional for the Congress to require you to buy something…because then the Congress could require you to do anything.”

Or is yours just a canned, drive-by reply?

I assume that's a rhetorical question.

The whole debate over health care and how to pay for it has become almost as sterile and unrealistic on the right as on the left.

If our society is not going to literally leave people to die in agony on the sidewalk in front of the hospital, it must be paid for some way.

The left seems to be hardening into the idea that only a single-payer system, with the government and therefore taxpayers being the payer, is acceptable. That is the real purpose behind Obamacare. It was intended more as the opening wedge than as a solution.

Meanwhile, too many on the right are unwilling to consider any real change to our present system, which, like every other system in the world, has good points and bad ones.

There are dozens of countries out there that have health care systems that are in some ways better than our own. If we were willing to compile the best ideas from these systems, we could built something that actually works.

But the Left is stuck on wanting something that duplicates the (disastrously failed) British system, and the Right seems to be unwilling to consider any changes at all.

Sigh.

“If the hospitals can’t turn anyone away, then they can’t stay open without some kind of public subsidy. If the public laws impose the requirement that all hospitals with working emergency rooms must accept all incoming patients regardless of their financial or health conditions, then the hospitals must either raise more money or go out of business.”

You are correct, the money quote.

Until these laws are repealed and market forces are allowed to return to medicine, there is no solution to the problem.

Life is “hard, brutish, and short” ... people should be responsible for themselves and their families.

Sorry if I sound like a cold hearted bastard, but that is the reality of the situation. People are not entitled to a home, food, car, cell phone, etc... what most of us would consider “necessities” of life ... why should medical care be any different? It is a commodity like anything else.

What a horribly dishonest presentation.

If I don’t wish to pay for another’s health care I’m “leaving him to die?”. So his existence gives him a lien on my life?

If I don’t pay for your car am I “leaving you to walk?”

Either we believe relationships between individuals should be voluntary and mutually consensual or we don’t. By adopting the leftist view that refusal to compel one man to care for another is cruelty, you accept the
justice of single payer whether you believe it or not.

I’m willing to look at changes. How about this for a change: you pay for your own goddamned healthcare and I’ll pay for mine.

Deal?

Hank

Fine with me.

However, I think it is reasonable to point out that the American people will not stand for leaving people to suffer and die on the street because they don’t have the funds to pay for their treatment.

Ayn Rand and you obviously think it’s fine to do so, and I might even agree with you. But politically, even in a GOP primary, it’s not going to fly.

So do we recognize the fact of public unwillingness to accept such a policy, and do what we can to help develop a policy acceptable to the voters that minimizes negative side effects?

Or do we just abandon the field to those who want to minimize human freedom? Cause I can tell you right now that if we give the voters a choice only between locking people out of the ER unless they pay in advance or having a single-payer system, the SP system will be voted in.

BTW, I’d appreciate it if you’d point out what in my post was dishonest. You may disagree with it, but that doesn’t make it dishonest.

You were dishonest first because you said the right wants no changes. Patently false unless you define change exclusively in leftist terms: i.e., more state involvement. Make the tax exemption individual. Expand health savings accounts. Allow insurance sales across state lines. Or better yet, like I said, get the government out of it ALTOGETHER. Those are all changes.....they just aren’t changes of the compulsory statist variety.

You were also dishonest because you talked about conservatives being willing to let people die in front of hospitals. Either that was dishonest or you truly don’t understand the difference between valuing liberty and blind malevolence. I chose dishonest because I was giving you credit for having the intelligence to grasp the distinction.

Hank

I will accept your first criticism as possibly valid, although none of the changes you mention do a thing to address the root of the problem, which is providing medical care to those who are incapable or unwilling to provide themselves with it. All they do is provide alternative ways to pay for those who are capable of doing so.

Your second point is not valid. Either you are willing to provide care in emergency rooms to whoever needs it, whether they can pay or not, or you are willing to let people die in front of the hospital.

In the first case, which is what we have now, the shortfall in revenue to the hospital must be made up some way, either by charging paying customers more or by government (taxpayer) subsidy. Or the hospital will go out of business or will stop providing ER services.

If people are turned away from ER rooms because they can’t pay, then you will indeed have people dying on the street out front.

My main point is not whether allowing this is justifiable or not philosophically, it is that it would be utterly disastrous politically. Unless you are deluded enough to think such Randian beliefs are majority opinions. Personally, I would be quite surprised if 10% of the population would be willing to go along with repealing the requirement that all ERs provide emergency care regardless of whether the recipient can pay or not.

I’m not quite sure why you insist on injecting Ayn Rand into this as I’ve never mentioned her. If you wish to insert a straw man, I’d prefer Murray Rothbard. At any rate.....

You’re wrong when you say these changes would only provide alternative ways of paying for those who already can. Every dollar they bring costs down makes health insurance more attractive than other alternatives on individual value scales. Some will conclude that they can “afford” it who previously concluded otherwise.

Your refusal to confront the logical implications of your belief system is telling. You phrase everything in the language of the statist.

Not compelling a person to provide a service to another gratis is “letting him die.”. There is no way around the fact that this formulation makes the provider’s labor the property of an unlimited number of potential recipients by virtue of their mere existence. You can dress it up as “compassion,” “fairness” or whatever you like, but it doesn’t change that fact. Nor does mass acceptance of this horrific statist dogma.

Hank

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