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Trump administration deals another blow to Obamacare
I also agree that Bill and Melinda should be entitled to exactly the same level of decent health care under the same financial rules as anyone else, just as they are entitled to service by the fire and police departments. As Lewis suggests, efforts to compensate for major differences in wealth and income should properly be dealt with by other means than health care.
@LewisBraham Implicit in my emphasis on subsidies was that they were funded out of taxes, as you described. You make a good point that whatever health subsidies the wealthy receive can be taxed back. So perhaps I too am getting a bit too hung up on perception.
If I walk into a hospital today, I know exactly what my financial exposure is. Courtesy of the ACA, my out of pocket expenses are capped, and courtesy of my state legislature, I cannot get balance billed. If those caps would bankrupt me, well, that's one reason why I said the ACA needs fixing.
Fixing is needed for lower income people at least. If you want to lower the Gates' out of pocket caps as well, you can, it might even simplify things, but it isn't necessary.
As far as providing free base level services goes, that's already built into the ACA. It includes the Basic Health Program. New York's version of BHP, called Essential Plans, provides free care - no premiums, no deductibles, no copays - for state residents with incomes under $12,060 (individual).
It works the same way as ACA individual insurance plans - through private insurers and private providers. Just get rid of the income limit to make it available to Peter Thiel (Gates isn't a NY resident), and there you go. Other changes/improvements (like streamlining/clarifying chargemasters, reducing cost of care, etc.) are desirable but don't come automatically just because care is now free.
On the other hand, this would add moral hazard to the list of concerns. Not so much for those who need it to be free, and likely not so much for Thiel either. But what about those in between who are happy to get free care while complaining about the taxes needed to pay for it?
The tendency to overuse health services because they are "free" or at least cost less than they're worth to you.
For example, if you reach your maximum out of pocket cap for the year (zero if services are free), you might just have that covered back surgery that you've been hesitant about.
Your personal risk/reward calculation shifts - you don't want to go through the months of recovery, you're willing to live with the discomfort so long as it doesn't get worse, but now's your opportunity to get it without also hurting your pocketbook.
Holy cow. Ya, I surely went to a different school. Thanks for taking the time to respond. But to label that "moral hazard" hits me like a plate full of porridge with ice cream and an olive oil chaser. It doesn't compute.
Just out of curiosity, where was this discussion of "moral hazard" when we taxpayers were bailing out the big banks in 2008? Or when fearless leader went bust and his debt was forgiven on various hotels? Somehow the term moral hazard like "personal responsibility" only ever seems to apply to ordinary people. Yes, it exists, but I think there are ways to install various checks and balances in the system to reduce it.
@LewisBraham- Actually, there was quite extensive consideration of those aspects on FundAlarm, the predecessor site to MFO, and also intermittent discussion here on MFO as Bernanke attempted to keep the leaning tower from toppling over. Before you joined the fray, I believe.
There's that "whatabout" ism. Deflections. How about a discussion?
I didn't say that the problem could not be dealt with, just that in addressing some problems others were added. As is often the case. What are some checks and balances one might install?
For example, you had written previously that cost should not be a concern when seeking police or fire help. But what about home fire/police alarms, especially faulty ones? [Edit: Yipes, "whatabout"]
Some municipalities will charge you a registration fee just to get connected. Regardless, they'll usually charge a fee if they get called too often. That's one way to ensure that free access to community services is not abused.
A question I have concerning the $20K/$20K example. We all(?) know that the perceived value of a dollar of income decreases as income increases (diminishing marginal utility). Likewise, the perceived value of a dollar of wealth decreases as wealth increases.
So, after the $20K mastectomy, the woman might not spring for $20K out of pocket for reconstructive surgery. That first $20K had a certain value to her, which was greater than the value of the reconstructive surgery. Now the insurance company gives her an extra $20K. That second $20K is worth less to her than the first $20K, and she spends it on the reconstructive surgery.
In other words:
value of first $20K > value of surgery > value of second $20K (what the insurer would pay)
This doesn't demonstrate a welfare gain for the woman; she is still getting care worth less than her $20K. It's just that to her, the insurer's $20K is worth even less. An interesting thought experiment, but it ignores the fact that while all dollars are equal to the insurer, they have differing values to the insured.
This seems to reinforce the problem with insurance moral hazard. If it's my money, it's not worth spending, but if I'm happy to spend your money, especially due to diminishing marginal utility of that additional money.
@MSF Fair enough regarding whataboutism. But I can't resist one more:
If it's my money, it's not worth spending, but if I'm happy to spend your money,
Doesn't that sound awfully familiar with regard to mutual fund money managers and the fees they charge? It's other people's money. (See, this is a fund relevant conversation!) But again I do think there are means to have checks and balances which to some degree already exist in Medicare, formularies as to what's covered for drugs, what procedures are covered and to what extent. There can be incentives and disincentives as to how much medical testing can be done, expense caps per patient, after which it's out of pocket, rewards for exercising and maintaining weight, etc.
These are details somehow almost every other industrialized nation but ours has already managed to work out via centralized medicine. What is really complicated isn't designing an effective system that would work like it has in other nations or even better than other nations. No, in my view it's something else. It's finding the political will to replace our existing system with a better one. That is extraordinarily complicated and difficult given the entrenched extremely powerful economic interests invested in maintaining the current system. But if we could start from scratch, I don't think it would be nearly that difficult to build a better model than the one we have. But working within the system we have and with the political and economic players--Big pharma, hospitals, AMA, private insurers, etc--Obamacare seemed to be the best we could do. Dismantling it only makes things worse.
Medicare is an interesting place to start. Original medicare includes copays for hospitalization and coinsurance (20%) for services. The ability to buy first dollar supplemental coverage is about to go away, supposedly because of moral hazard.
Regardless, it was the absolutely free aspect of your suggestion that raised my concern about abuse. Put in a few road bumps (that remove the 100% free aspect), and I agree that the problem greatly decreases.
The ACA does provide a path to single payer at the state level. While efforts have failed in the past, perhaps we're seeing stronger pressure for that now, especially as costs continue to rise. A large state like Calif. or NY might pull it off, and once a demonstration state exists, even more people might push for it.
Then again, I'm expecting a visit from Santa Claus any day now.
"Across the country, the details vary but the story is the same. The Trump administration has been rolling back sections of the Obama-era health law piece by piece. And states are filling the void, either to buttress or countermand changes from Washington." "The growing divergence between states may be even more pronounced than it was before the ACA, also called Obamacare, passed in 2010. "
"The states’ accelerating tendency to peel off in different directions will have significant financial repercussions for nearly 30 million U.S. small businesses, about 17 million people who buy individual coverage, 75 million Medicaid recipients and scores of hospitals and insurers."
Comments
If I walk into a hospital today, I know exactly what my financial exposure is. Courtesy of the ACA, my out of pocket expenses are capped, and courtesy of my state legislature, I cannot get balance billed. If those caps would bankrupt me, well, that's one reason why I said the ACA needs fixing.
Fixing is needed for lower income people at least. If you want to lower the Gates' out of pocket caps as well, you can, it might even simplify things, but it isn't necessary.
As far as providing free base level services goes, that's already built into the ACA. It includes the Basic Health Program. New York's version of BHP, called Essential Plans, provides free care - no premiums, no deductibles, no copays - for state residents with incomes under $12,060 (individual).
It works the same way as ACA individual insurance plans - through private insurers and private providers. Just get rid of the income limit to make it available to Peter Thiel (Gates isn't a NY resident), and there you go. Other changes/improvements (like streamlining/clarifying chargemasters, reducing cost of care, etc.) are desirable but don't come automatically just because care is now free.
On the other hand, this would add moral hazard to the list of concerns. Not so much for those who need it to be free, and likely not so much for Thiel either. But what about those in between who are happy to get free care while complaining about the taxes needed to pay for it?
For example, if you reach your maximum out of pocket cap for the year (zero if services are free), you might just have that covered back surgery that you've been hesitant about.
Your personal risk/reward calculation shifts - you don't want to go through the months of recovery, you're willing to live with the discomfort so long as it doesn't get worse, but now's your opportunity to get it without also hurting your pocketbook.
https://www.healthaffairs.org/doi/10.1377/hlthaff.23.5.194
I didn't say that the problem could not be dealt with, just that in addressing some problems others were added. As is often the case. What are some checks and balances one might install?
For example, you had written previously that cost should not be a concern when seeking police or fire help. But what about home fire/police alarms, especially faulty ones? [Edit: Yipes, "whatabout"]
Some municipalities will charge you a registration fee just to get connected. Regardless, they'll usually charge a fee if they get called too often. That's one way to ensure that free access to community services is not abused.
https://www.protectamerica.com/home-security-blog/faqs/alarm-registration-and-false-alarm-fees-in-different-cities_11121
So, after the $20K mastectomy, the woman might not spring for $20K out of pocket for reconstructive surgery. That first $20K had a certain value to her, which was greater than the value of the reconstructive surgery. Now the insurance company gives her an extra $20K. That second $20K is worth less to her than the first $20K, and she spends it on the reconstructive surgery.
In other words:
value of first $20K > value of surgery > value of second $20K (what the insurer would pay)
This doesn't demonstrate a welfare gain for the woman; she is still getting care worth less than her $20K. It's just that to her, the insurer's $20K is worth even less. An interesting thought experiment, but it ignores the fact that while all dollars are equal to the insurer, they have differing values to the insured.
This seems to reinforce the problem with insurance moral hazard. If it's my money, it's not worth spending, but if I'm happy to spend your money, especially due to diminishing marginal utility of that additional money.
Didn't I mention quite a ways back in this conversation that there are "No easy answers."?
No, wait...maybe it was you that said that...
These are details somehow almost every other industrialized nation but ours has already managed to work out via centralized medicine. What is really complicated isn't designing an effective system that would work like it has in other nations or even better than other nations. No, in my view it's something else. It's finding the political will to replace our existing system with a better one. That is extraordinarily complicated and difficult given the entrenched extremely powerful economic interests invested in maintaining the current system. But if we could start from scratch, I don't think it would be nearly that difficult to build a better model than the one we have. But working within the system we have and with the political and economic players--Big pharma, hospitals, AMA, private insurers, etc--Obamacare seemed to be the best we could do. Dismantling it only makes things worse.
Regardless, it was the absolutely free aspect of your suggestion that raised my concern about abuse. Put in a few road bumps (that remove the 100% free aspect), and I agree that the problem greatly decreases.
The ACA does provide a path to single payer at the state level. While efforts have failed in the past, perhaps we're seeing stronger pressure for that now, especially as costs continue to rise. A large state like Calif. or NY might pull it off, and once a demonstration state exists, even more people might push for it.
Then again, I'm expecting a visit from Santa Claus any day now.
That's the word today from an article in The Wall Street Journal. Here are a few selected highlights from that article:
"Across the country, the details vary but the story is the same. The Trump administration has been rolling back sections of the Obama-era health law piece by piece. And states are filling the void, either to buttress or countermand changes from Washington." "The growing divergence between states may be even more pronounced than it was before the ACA, also called Obamacare, passed in 2010. "
"The states’ accelerating tendency to peel off in different directions will have significant financial repercussions for nearly 30 million U.S. small businesses, about 17 million people who buy individual coverage, 75 million Medicaid recipients and scores of hospitals and insurers."