Talk Elections

"With regards to my health care plan, let me describe what is the ultimate conservative approach. In this country, you have today about 47 million people that don’t have health insurance. We went out and tried to find out why they don’t. We found out that about half of them could afford to buy insurance if it were reasonably priced. They could afford to buy it, but they weren’t buying it. it? If we get sick, we can go to the hospital and get care for free.“ And we said: what? If somebody could afford insurance, they should either buy the insurance or pay their own way. They don’t have to buy insurance if they don’t want to, but pay their own way. But they shouldn’t be allowed to just show up at the hospital and say, somebody else should pay for me. So we said: No more free riders. It was like bringing “workfare” to welfare. We said: If you can afford insurance, then either have the insurance or get a health savings account. Pay your own way, but no more free ride. That was what the mandate did."

http://www.issues2000.org/2012/Mitt_Romney_Health_Care.htm (http://www.issues2000.org/2012/Mitt_Romney_Health_Care.htm)

Solid stuff. This guy should be an adviser to Obama's campaign.

It is solid only if it were true. Alas it is not. The young will be getting into the business of subsidizing the old, above and beyond medicare. They are being asked to overpay for their insurance. The moral hazard was the nose in the tent, to move them from free riders into subsidizers - from one end of the field to the other. And we still have a dysfunctional delivery system, with not much competition and price policing to boot.

All insurance is subsidy by the lucky of the unlucky. Because of Medicare the young are subsidizing those in the latter years of middle age. 

No insurance is about being unlucky. But when you are forced to pay more than necessary to insure your unluckiness, because you are forced to pay more given your age and level of health so that someone else pays less (to wit, pay more than necessary to deal with the free rider problem), that is a subsidy - not insurance. The two concepts must not be conflated in order to make an intelligent policy choice here.  Generally it is preferable to finance subsidies on a means tested basis, but for some reason the Left just doesn't it get it on this one.  They want to slam young folks, not rich folks.

Torie, the base of the plan is than young people will eventually old and get sick.

Ok, so what about the adjustments Australia made to its community rating policies some years back, known as LHC (Lifetime Health Cover)?  They found that community rating was leading to an adverse selection problem for the young, leading them to rely only on the national policy and not purchase supplemental private plans.  So, they adopted additional reforms that modified the community rating rules to allow individual companies to sell policies whose premiums were adjusted for age entry, allowed young adults to buy policies that insured some things and excluded others, allowed them to choose between different deductible amounts, and, as I understand it, in some cases adjustment of pooling and policy prices for older enrollees as well.  They allowed, that is, what is apparently called "implicit rating" within the larger structure of a community rating framework.  The product differentiation and its effect on premiums seems to have led to a dramatic increase in the number of young people enrolled in private plans in Australia.  The author of the linked paper that presents this analysis notes toward the end (p. 607) that a few U.S. studies have also found that community rating doesn't have as much effect on numbers of people insured in states that have it, but has more an effect on policy sorting.

http://www.genevaassociation.org/PDF/Geneva_papers_on_Risk_and_Insurance/GA2008_GP33(4)_Buchmueller.pdf (http://www.genevaassociation.org/PDF/Geneva_papers_on_Risk_and_Insurance/GA2008_GP33(4)_Buchmueller.pdf)

The base of any sort of social policy is the strong subsidizing the weak. The wealthy subsidize the poor, the old subsidize the young (whether they be adolescents, children or young adults), those who drive cars subsidize those who ride public transit and civilians subsidize the military. It's called living in a society. Your canard is growing really old and I advise you to find a new excuse to oppose this policy.

And when I'm old, the young will pay for me.  And when they're old, the new young will pay for them.  It's the fairest way to do it.

I read some studies of this online this evening, and I do think, if we just stick with pure community rating, the cross-subsidy issue could indeed be quite burdensome on the young.  I agree in principle with the cycle of life idea.  But if the young can't afford it, it's hard to observe the principle.  I think we may either have to make modifications to the community rating policies akin in some way to how Australia handled it, or just go with means-tested subsidization, which is more straightforward and arguably fairer.  I'm glad the mandate held, but that doesn't solve all the policy problems.

A modest proposal which might seem fairer to some conservatives: if you're one of those young free riders, who can afford health care, but chooses not to buy it, then, if you get catastrophically ill -- cancer, car accident, whatever -- you should be denied treatment, and left to die. We'd have to release doctors from the Hippocratic Oath, mind you, but anything to give those young people freedom of choice!

Which is why the plan covers elective surgery? It's not health insurance, it's "pay for my free **** so I don't have to pay for it.

We'd be better off giving out gas cards to everyone. Then they don't have to worry about how they are gonna get to the pharmacy.

So it makes sense for the young to subsidize someone else, when available cash is really tight, in exchange for a subsidy when they are older and have much more cash lying around, on average? No, I am going to stand by my position on this one, thanks.

In any event, the system is headed for collapse, because the young will just pay the penalty if they need care, which will cost them a lot less, and that assumes the penalty is ever paid, and the IRS enforcement mechanisms to do that seem close to nil. All the IRS can do is offset the penalty against any tax refund that might otherwise be owing per my readings on this matter. So the whole scheme should fall apart in a hurry. You just wait and watch.

That's why I think you should be in favor of letting the young and deliberately uninsured die when they get sick.

No, I need to keep the young alive to pay for my social security. So I want to encourage them to be insured by not having to cross subsidize others.

The worst cross-subsidy is how public universities were nearly free for the boomers but kids these days have to rack up huge debts to pay for the same education because the Boomers won't support the kinds of taxes their parents paid. That's a more pernicious cross-subsidy.

But presumably you need to keep the middle aged alive to pay for your social security, too. And shifting costs away from one group does mean shifting them on to another.  

The parents didn't pay any more in taxes, and probably less overall. Those high marginal rates were paid by almost nobody. The cost of higher education is however a scandal. Something is terribly dysfunctional with that market. I (well my parents) paid about $2000 a year in tuition for eight years from 1969-1977 (college, business school and law school, all at elite institutions), maybe about $10,000 now in inflated dollars. But the cost of tuition is now around $40,000, which means a quadrupling in tuition costs in real inflation adjusted dollars.

Something is rotten in Denmark. Probably the government pumping money in, had something to do with it, but it would be great if someone directed me to some intelligent paper on the subject, that has been peer reviewed and sustained that review.

These days it has much more to do with the government money being yanked out. For all practical purposes, the United States no longer has public universities, at least at the flagship state level.

More fully, there have been a couple of financing models for research universities that have proved sustainable. One is the European model (formerly roughly similar to the American public university model), where most or all of the cost of the university is paid for by the government out of tax revenue. Taxpayers subsidize university education whether they get it or not, but since there's a strong correlation between university attendance and income, it roughly evens out.
The other model is the American private research university, where tuition needs to be extremely high, not only to cover the costs of running the institution, but also to subsidize the talented kids who could never afford full fare. That's how somewhere like Harvard works -- rich parents cheerfully pay $50 000 a year, but half the students receive some kind of financial aid, such that families making less than about $120 000 a year pay little or nothing.
For that model to work, of course, you need lots of rich parents who are suckers enough to pay that much. If you don't have enough of them, or if you set tuition too low, then there isn't enough money left over to subsidize "poor" kids. Either way, rich people subsidize research universities, whether through their taxes, or through paying too much for their kids' tuition.  Conservatives might prefer the latter model, as one that preserves consumer choice, but of course it builds in a number of inequities and inefficiencies as well.

Yup.  I've always said that Romney was the worst possible nominee for the GOP to run against Obama.

Everyone should be able to see now why the MSM-Obama SuperPAC made sure to pound into dust every "conservative alternative" to Romney, giving him a clear path to the nomination.

And the middlemen in the government will become superrich.

Or did you think it's natural that D.C. is now America's richest metropolis?

That is how it would work if we were all notoriously stingy progressives. 

The conservative way is that we would all voluntarily donate to save the deserving poor patient in such a situation.

Progressives who insanely think that without government-forced healthcare lots of people will be "left to die" need to explain why that didn't happen before government-forced healthcare.

Not a peer-reviewed paper (I'd have to do some digging for that) and this is a bit dated of a FinAid research report.  But despite the ten-year old numbers, I think the identification and breakdown of cost-drivers is still basically good.

http://www.finaid.org/calculators/tuitionanalysis.pdf (http://www.finaid.org/calculators/tuitionanalysis.pdf)

There was financial aid, and grants back in my day too. I am not persuaded that the bulk of the massive tuition increases can be attributable to a huge ramp up in cross subsidies, with the rich paying more, and the poor paying less, with more poors in the system. That is probably part of it however, I just don't think it is the major part.

As you probably already noticed, I'm not saying that anybody would be left to die without the ACA. I'm saying that there are several ways of dealing with the free-rider problem of young people who can afford health insurance, but choose not to purchase it. One (my preferred option) would be Medicare for everyone. One (which the ACA offers) would be to penalize them, ofsetting the financial burden these people willingly inflict on the rest of us, and incentivizing them to buy insurance. A third way would be to let people live, or die, with the consequences of their actions. Our current solution is of course charity, which, as so often, actually amounts to tax dollars through the back door.

The point is that young people who can afford health insurance, but choose not to purchase it, can celebrate their freedom of choice all they like, but the reality is that they're imposing considerable hidden costs on the rest of us, who pay taxes and have health insurance.

Thanks anvi. Some of it doesn't make much sense to me, but to evaluate it, one would need to look at the underlying data, and how it was massaged. I tend to agree that some of it is due to higher salaries, and higher quality, of faculty. And some of that has to do with the ramp up in real incomes of the highly skilled in general. And ascribing maybe a third of the cost problem to that, seems kind of plausible maybe. The balance however seems less plausible.

Well, I will ask a few administrator friends of mine and get you some peer-reviewed research references.  (I'd be interested to read them too, anyway.)

Nice to see some supporting data.
The question, of course, is whether rising tuition is a problem or not. To the extent that private-school tuition goes up, that seems like a problem the market will take care of. And with public schools, well, like the paper says (only much more so in the past decade), states have decided not to fund public universities. Each school has choices to make in that context: keep tuition low through drastic cuts, and consequent decline in quality; or invest in quality, and charge more money. If government wants to influence university policy, then they'll need to pay up.

The cases of private and public increases are of course distinct in important ways.  Private universities are in fierce competition with each other, and since Boards of Trustees are importuned to spend more at the same time that cuts are blamed on their decisions and no one else's, the spending increases continue as do the tuition hikes.  There are a lot more factors in the case of public schools.  State cutbacks are one factor, but so are steadily increasing state reporting requirements, which accounts for some of the increased administrative hiring and extra faculty compensation in cases where they do help there.  But the pumping of more financial aid moneys in also encourages public schools to rely more on tuition at the same time that other sources of funding are in short supply.  There's no doubt that increased instructional costs is a factor too, as well as additional student services that have been piled up by universities which accounts for another good bit of increased administrative hiring.  There are lots of factors, and I think sometimes, because there is a dynamic relation between so many of them, isolating them from one another in quantitative analyses can get tricky.

Anytime people don't buy something they could afford, that's not THEIR fault.  That's the fault of the people offering the product.  Either the product isn't offering value for the cost or it's totally misdesigned for the consumers you're trying to reach.  With health insurance and young people, it's probably BOTH.

Now, the only question we have to answer is WHY are insurance policies SO MISDESIGNED that young people don't want to buy them?  I would say, Look for the answer in the state regulators:  How many state insurance regulators are 20-somethings?

The solution?  Let insurance companies market to young consumers the kinds of health care policies they WILL buy.  Ones that cover catastrophic loss but not, say, all the crap near and dear to progressive hearts, like birth control pills and sex-change surgery.

The problem is that the choice not to purchase health insurance is a choice to burden taxpayers with the costs of any catastrophic care you might need. That's the way the world actually works, right now. The government in effect provides free catastrophic health coverage for people who don't purchase their own, so it seems only fair that people either pay for that insurance, or not receive its benefits.

Certainly, with the proviso that cutbacks increasingly blur the distinction between public and private. A great many flagship state universities now get less than 10% of their funding from state government. They're all looking around for a new business model that works in that environment, and on the whole emulating private research universities seems to be leading to the best outcomes.

It's the young who have a good job who will have to pay a lot more. If you make less than about 44k, you will get subsidies to pay for your plan. And the rich olds who are getting subsidized are paying more in taxes, though the new tax should have started a little lower. So we do have subsidies built in from rich to poor and from young to old. That sounds just fine with me. You can call it insurance or subsidies or whatever you want but a system that doesn't rely on some subsidies will not survive.

Wouldn't a plan geared towards the young also cover birth control?

Letting the young buy cheaper plans will mean someone else picks up the tab. So working class 50-64 year olds get f'ed in that case. Hmm maybe the Democrats should have devised Obamacare to screw over these people as they tend to be Republicans anyways. Of course the same people complaining about the young being screwed now would be complaining about the olds being screwed.

And of course I would have preferred Wydens plan to Ppaca but there is no way in hell that would have passed. Asking people to give up the insurance they have currently? Seems DOA.

The biggest secret in college tuition (particularly for private schools) is that since the 70's it has been a mean-tested affair. In 1975 I was admitted to a number of fine liberal arts colleges and when one was done adding up the different scholarships and grants, the actual payment by my parents was about the same for all of them. It's no different with my daughter's tuition today. Everything is ruled by the FAFSA form, and scholarships adjust annually to reflect the previous year's income. The secret emerges because tuition isn't described as mean-tested with the cost for a given income level listed, instead just the top figure for highest income earners is quoted.

Properly priced insurance should take that into account. It's like setting up a retirement plan, where if you start at an earlier age you don't need to put in as much per month. Similarly, if you wait to pay for insurance later in life it would be more expensive. Ask any life insurance agent.

What continues to mystify me is the talk of young free riders. As I talk to hospital administrators I find that young people who are working without health insurance do not get a free ride. They may get care to deal with a life-threatening situation, but the hospital will chase them for payments using the usual entourage of letters, calls, collection agencies, and attorneys. The poor may indeed get a free ride, but any plan was going to subsidize their care.

Mitt Romney may support state's rights, but that doesn't mean he supports Federal Involvement in taxing everyone for health care.  Many states can't even afford to implement universal health care.  Its a disaster waiting to happen.

Yep, exactly right. Unless they want to start hauling off nuns to jail. I'm not paying the penalty, and if the IRS wants to haul me away to jail for 'evasion', than so be it.

This is why the liberals want to shut down all the Catholic hospitals. Then people will really die on the street because the Catholics refused to give everyone free condoms.

Lots of young people have mental health issues, sometimes needing hospitalization. Often they just benefit from having medical supervision and regular prescriptions... and yes the cost of the prescription alone is probably less than the cost of insurance... but there's a mental block associated with spending that higher amount with no medical supervision vs. having a doctor prescribe it and having it be much less expensive as part of overall care.

Dental work is not something that springs up at age 40, either.

You might be interested in some Forums on generational history -- that Boomers got pampered but were not so generous with their kids. (Really, it is a matter of Boomer executives and their political stooges gutting the public sector except for graft; those executives and their political stooges have been ungenerous with fellow Boomers not in the economic elite, too).

Such is not good for creating young conservatives. Traditionally, creditors have been on the Right out of concern for the value of their assets and have gone further to the Right as they are bigger creditors, and debtors have tended to the Left on economics -- desiring either more economic opportunity or inflation to reduce the severity of their debts. We used to have lots of moderate conservatives when millions had savings accounts, life-insurance policies, and such low-end investments as corporate bonds, 401Ks, IRAs, and  mutual funds... and after some hard years, savers have largely devoured their savings, bonds pay next to nothing, and the valuations of 401K accounts have been ravaged. A few tycoons and executives have done extremely well by treating others badly.

America is polarized much like Spain in the 1930s in politics. We have no moderate conservatives because we have few surviving small-scale creditors...  and they know that they can become destitute at the caprice of some tycoon or executive. 

First, yes, I probably should have said something like "cosmetic breast enhancement surgery" instead of "birth control" -- even though birth control pills are rarely medically necessary.

Second, why shouldn't young people pay less for health insurance?  They use it less.  Insurers charge young people <b>more</b> for <b>auto</b> insurance.  Do you want to change that, too?

As I say, young people aren't crazy.  They intelligently choose not to buy health insurance because it is -- as currently inflicted on them by government regulators -- a bad bargain.  Let the insurers design plans specifically geared to young people and they WILL buy them.

Young people don't buy insurance because in most states it's a bad bargain - because insurance companies assume only sick or expensive young people buy it and price it accordingly.

Individual insurance is ridiculously expensive in most states where insurance actually has value because of the adverse selection problem. If insurance were available for $250 a month when I was 22, I'd have bought it. But it was more like $1,000 when it was even available, and with high co-pays. An employer pays a fraction of that for a 22-year old employee because of their bargaining power and because requiring employment has the same effect as a mandate - it brings healthy people into the pool.

I posted this on the US Gen Disc board. The link at the end gives a pretty good idea of a typical set of state mandates on insurance coverage. This is a big barrier to low-cost policies designed for young people.

This is how the Westboro Baptist Church refers to the President.

Welcome to the forum

Thank you. I've been lurking and finally jumped in because I feel conservatives are underrepresented on here.

smh

In the words of Mitt Romney:

"Who let the trolls out? Who, who, who, who?"

The individual mandate simply doesn't work.  The risk pool death spirals are going to kick in like a motherf**ker in 2014.