GOP Representatives oppose public option because it's "cheaper", "saves money"

[Badger]

Badger, competition in theory forces cost control, or you go out of business. We need more competition, and more transparency to facilitate it. I don't see why there are economies of scale when it comes to insurance plans so massive that it requires 200 million participants to reach max efficiency. And why does anyone think what the government runs would be efficient anyway, particularly given the political pressures, not to mention well, public employee unions?  No, what this is about is muscling out over time private alternatives, and squeezing vendors with monopsony buying power, so it will not be profitable for anymore hospitals to be built absent government subsidies, or private company drug research, as the existing capital base of those entities is cannibalized. And then 20 years from now, folks scream, hey the market does not work because no hospitals are being built, we cannot attract new doctors to the profession, and no drug research is being done anymore, and thus the government needs to run all that too, all of course with public funds.

There is no free lunch, and the notion that the government can effect massive cost savings to deliver health care is ludicrous, just ludicrous. Having said that, the health care system is in general hideously inefficient, in part due to government regulation and lack of transparency. Heck, next to nothing when it comes to medical records is computerized, leading to mistakes and ignorance. That is why I have all my medical records in hand, all of them, so I can tell medical providers basically what is wrong with me, and what I expect, and what my delta function has been. If I did not do that, my care would be less efficacious then it is.

Anyway, government has a cost of capital too, and what profits are about, is compensating capital. And that cost includes risk, which is hidden from government, because that risk is absorbed when things go wrong, with well higher costs and taxes and deficits, and inflation, and you name it. It is far higher than the interest rate on T bills and bonds.

So much to refute, so little time....

First off, slow down. More competition and greater transparency is exactly what a public option entails. Again, no conservatives are arguing a public option will be unfair because of any federal subsidies---because there won't be any. They're conceding that the public option will be more cost effective and efficient at delivering health care than private sector insurers can without subsidies. Their position is providing health insurance options to the tens of millions of insured and underinsured is less important than protecting insurance companies from this additional competition. Why? It's the government and that's bad, and private insurers are businesses and that's good. The providing millions with health insurance cheaper and more efficiently is unimportant compared to a violation of their rabid anti-government orthodoxy. A completely indefensibly argument, really. It's these same 'protectionist' conservatives who simultaneously--and apparently with no realization of their contradiction--still claim 'government can't do anything right'. Except provide health insurance apparently.

Which leads to my second point; all the calamities like hospitals closing you predict don't begin to add up. How does broader health insurance result in less demand for medical services? Check out this thread:
https://uselectionatlas.org/FORUM/index.php?topic=99395.0
Listen to the many folks who actually have some level of national health insurance none of whom (with one exception from Portugal, and that's practically third world and doesn't count) :-P would trade our system for theirs. Somehow hospitals still function and thrive.

Consider the post office. Despite the government "muscling out competition" with cheap efficient service, UPS and Fed Ex still do just fine. Competition for the market--isn't it great?

No, health care reform will not be a free lunch. Of course there will be costs. The question is whether or not a public option is better than the expensive patchwork system we currently have that even conservatives concede insures fewer people at higher cost, and is not effectively controlling the rising costs of medicaid and medicare either. The clear answer here, unless one is a diehard anti-government ideologue, is "bring on the public option".

And isn't that the whole point here? If it's shown on a broad basis that government can provide a national benefit relatively cheaply and efficiently, doesn't that undermine the central conservative Republican philosophy that government can't do anything right (except fight wars)? Wouldn't the success of public health insurance show <gasp> St. Reagan was wrong and, more importantly, undercut the very argument for voting Republican to tens of millions? You bet your ass.

Conservatives aren't scared Obama's health care plan will fail as they publicly assert; they're scared to death it'll succeed. Because while that'd be great for the country, it'd be a disaster for the GOP.

[Torie]

Well sure Badger, if a public system were more efficient, and was not over time cannibalizing existing assets in the sense that it was not taking the economic incentives out of private drug company research, construction of new health care facilities, and folks of talent going into the health care industry over time down the road, then yes, that is great.  But that is your assumption, and you have offered no concrete evidence of which I am aware that an effective government monopoly running all of this would be more efficient than a private system with means tested subsidies. There is this assumption that somehow profits equals economic waste, which no economist of whom I am aware would agree. What does the government run efficiently vis a vis private industry that is relatively complex?  What the government is efficient at is redistributing cash, which is why social security is efficiently run - it is mostly about negotiating and issuing checks.

[Badger]

Well sure Badger, if a public system were more efficient, and was not over time cannibalizing existing assets in the sense that it was not taking the economic incentives out of private drug company research, construction of new health care facilities, and folks of talent going into the health care industry over time down the road, then yes, that is great.  But that is your assumption, and you have offered no concrete evidence of which I am aware that an effective government monopoly running all of this would be more efficient than a private system with means tested subsidies. There is this assumption that somehow profits equals economic waste, which no economist of whom I am aware would agree. What does the government run efficiently vis a vis private industry that is relatively complex?  What the government is efficient at is redistributing cash, which is why social security is efficiently run - it is mostly about negotiating and issuing checks.

I feel you Torie, but:

1) What does the research, construction of new hospitals, drawing talented new folks into health care have to do with the private health insurance industry (or more specifically, not giving private insurers competition from a public option) have to do with any of this? As I pointed out in another thread, it's not like any executives at Aetna invented any of the technology being used at the Mayo Clinic.

2) You and I have a different idea of what constitutes a "government monopoly". Consider my earlier comparison of the post office vs. UPS & Fed Ex. Besides, Obama's health care plan does not involve a government monopoly, but rather a public option for health insurance. Big difference.

3) I, like 99% of liberals, never said that profits = waste. That's not the issue. What I believe is:
Profits of health insurance industry < (x100) providing cheaper more efficient option for health insurance to those needing it.

[True Federalist (진정한 연방 주의자)]

As I've said before, I feel the best solution to the health care crisis is a double mandate with people required to have health insurance, and health insurers required to accept everyone with no price discrimination based on pre-existing conditions.  Ideally, subsidies in such a scheme would be handed out to the insurees, not the insurers, be they public or private.

I agree except those with pre-existing conditions should pay more in premiums, if dumb enough not to have insurance, or poor enough, with the higher premiums also subsidized on a means tested basis. Do you really want the taxpayers subsidizing my premiums because I have rather expensive pre-existing conditions? I think not.

Torie, there is no way to have universal coverage with private insurers if persons are penalized for having preexisting conditions.  If you feel that lack of coverage isn't a concern, then you likely feel that there is no health care crisis that government should be addressing.

[Torie]

As I've said before, I feel the best solution to the health care crisis is a double mandate with people required to have health insurance, and health insurers required to accept everyone with no price discrimination based on pre-existing conditions.  Ideally, subsidies in such a scheme would be handed out to the insurees, not the insurers, be they public or private.

I agree except those with pre-existing conditions should pay more in premiums, if dumb enough not to have insurance, or poor enough, with the higher premiums also subsidized on a means tested basis. Do you really want the taxpayers subsidizing my premiums because I have rather expensive pre-existing conditions? I think not.

Torie, there is no way to have universal coverage with private insurers if persons are penalized for having preexisting conditions.  If you feel that lack of coverage isn't a concern, then you likely feel that there is no health care crisis that government should be addressing.

No, insurance is mandatory under my scheme, and if folks who are sickies already can't afford the premiums, they will be subsidized for the premium cost on a means tested basis. Everyone will be covered, and must be covered - period. The idea that I could pass my pre-existing conditions cost on to the taxpayers is simply outrageous. It sucks! 

[Person Man]

Well, ideally, Torie that would be a GREAT system....but the problem with that is that there is no stopping insurance companies for not only gouging policy holders, but the taxpayers themselves. If we had some sort of anti-cartel  laws on top of that...it could be a good comprimise.

[muon2]

As I've said before, I feel the best solution to the health care crisis is a double mandate with people required to have health insurance, and health insurers required to accept everyone with no price discrimination based on pre-existing conditions.  Ideally, subsidies in such a scheme would be handed out to the insurees, not the insurers, be they public or private.

I agree except those with pre-existing conditions should pay more in premiums, if dumb enough not to have insurance, or poor enough, with the higher premiums also subsidized on a means tested basis. Do you really want the taxpayers subsidizing my premiums because I have rather expensive pre-existing conditions? I think not.

Torie, there is no way to have universal coverage with private insurers if persons are penalized for having preexisting conditions.  If you feel that lack of coverage isn't a concern, then you likely feel that there is no health care crisis that government should be addressing.

No, insurance is mandatory under my scheme, and if folks who are sickies already can't afford the premiums, they will be subsidized for the premium cost on a means tested basis. Everyone will be covered, and must be covered - period. The idea that I could pass my pre-existing conditions cost on to the taxpayers is simply outrageous. It sucks! 

I'm a bit confused about the role of pre-existing conditions in your statement. Torie, if I project your plan down the line a few years, there should be no such thing as a pre-existing condition since insurance would be mandatory, so the only possible sense of a pre-existing condition would be for a new provider of coverage should a person change insurers.

If I've read that right then the only issue is what to do about pre-existing conditions at the startup of your plan. That strikes me as a one time cost. If a plan can't cope with that initial cost, then we'll have legacy illnesses in the system and a dual class of patients at a future date. For example five years into the plan two people with the same condition would have different costs based on whether their condition occurred before or after the start of the mandate. As time goes on this seems increasingly untenable.

If I've read your idea incorrectly, then it would seem that there is an inherent problem with future insurees who choose or must switch insurers after mandatory insurance is in place. If they have an insurable condition would it be a pre-existing condition? If so, then they would be paying a penalty for switching insurers, perhaps through no fault of their own.

[Torie]

They would be paying high premiums with their existing insurer, and would continue to pay high premiums if they switched companies, but there would be no penalty for switching. If they have cheap insurance now, because the condition occurred while insured, then switching without a pre-existing filter, would load the cost onto the new insurer, and be a windfall for the previous one, as the previous insurer sluffs off a "loser." Maybe the old insurer should cut a check to the new one or something to erase that transfer payment come to think of it, and facilitate competition among the already insured "sickies."

If the sickies can't afford it, they would be subsidized. It is a one time cost in the sense, that over time it would all fade away, but that "one time" cost goes on year after year, until one becomes a "medicare."  I don't see why I should be subsidized until I hit 65, and I would be even though I do have insurance. With no pre-existing filter, I could get cheaper insurance.

Good comment though Muon2, but then that is almost invariably the case with you, you insightful devil you!

[muon2]

They would be paying high premiums with their existing insurer, and would continue to pay high premiums if they switched companies, but there would be no penalty for switching. If they have cheap insurance now, because the condition occurred while insured, then switching without a pre-existing filter, would load the cost onto the new insurer, and be a windfall for the previous one, as the previous insurer sluffs off a "loser." Maybe the old insurer should cut a check to the new one or something to erase that transfer payment come to think of it, and facilitate competition among the already insured "sickies."

If the sickies can't afford it, they would be subsidized. It is a one time cost in the sense, that over time it would all fade away, but that "one time" cost goes on year after year, until one becomes a "medicare."  I don't see why I should be subsidized until I hit 65, and I would be even though I do have insurance. With no pre-existing filter, I could get cheaper insurance.

Good comment though Muon2, but then that is almost invariably the case with you, you insightful devil you!

OK, so let me consider three people who today all have the same insurable medical condition. Person A has employer-based coverage and acquired the condition after originally gaining coverage, but before the mandate and as such maintains a lower premium. Person B has coverage for a condition like A but after the start of your mandate must switch insurers; it looks like person B maintains the low cost of premiums since there is no pre-existing condition in that case since the switch occurs after the mandate. Person C was uninsured at the time of the mandate acquires mandatory insurance at a higher premium, and has to switch insurers at the same time as B; it looks like C is stuck with the higher payment even after the switch.

This seems unfair to C compared to A or B. Suppose all three are 25 at the time of the mandate and A and B only just acquired coverage shortly before the mandate (I'm assuming it was with their job after graduating college). Waiting 40 years until all three turn 65 is a long time to regain parity in the system. Neither A nor B has really paid much into the insurance pool to make a claim that they deserve the same care at lower cost for 40 years. There's some sense to other parts of the proposal, but this situation strikes me as one where one must bite the bullet and impose equity as a transitional cost.

[Person Man]

What I am worried about is the fact that simply subsidizing insurance would give the wrong market signals to an industry that isn't that accountable to market forces at it is. Trying to subsidize our mistakes will simply cause too much inflation for my liking...either that or higher taxes.

[Torie]

Suppose C is at Harvard Law School, and is destined to make millions?  Should the taxpayers subsidize this soon to be "rich," for 40 years because the guy was too arrogant or feckless to get health insurance for relative pennies? 

I guess that is the best I can do. Extreme cases sometimes make for bad policy. Still if one can afford it, and made a financial mistake, I just don't see why the taxpayers should bail that person out. In any event, where do you draw the line between the feckless 25 year old, and the 58 year old Torie? When does one who can afford it become totally financially responsible for one's financial decisions, who has the dough to pay for the mistake?

[Torie]

What I am worried about is the fact that simply subsidizing insurance would give the wrong market signals to an industry that isn't that accountable to market forces at it is. Trying to subsidize our mistakes will simply cause too much inflation for my liking...either that or higher taxes.

Universal health care would subsidize every mistake anyone has made, no matter their balance sheet or income statement.  Is that just?

[Person Man]

What I am worried about is the fact that simply subsidizing insurance would give the wrong market signals to an industry that isn't that accountable to market forces at it is. Trying to subsidize our mistakes will simply cause too much inflation for my liking...either that or higher taxes.

Universal health care would subsidize every mistake anyone has made, no matter their balance sheet or income statement.  Is that just?

Isn't that the goal of insurance anyway? ....there was a thing on the Simpsons about that....again...I don't think its a public/private issue...The point is that people make mistakes and to have to have each person pay for that alone gets expensive over time. The goal of insurance is to spread liability as thinly as possible. Its kinda like the bailout...sure it gives the message that you can be a total jackass and not be punished for it, but not doing anything about it is sending the message that hard work isn't worth the risk.

At one point, we need to accept that some people will always game the system...And it could be anyone who does it...from the republican who hordes her money (instead of trying to grow her business so that other people can have the same oppurtunites that she had) in a way that is even less wise than what the government was using it for before they decided to give it back to her so that she could use it however she pleased with it. As a result, that money is not used and simply becomes paper for another 40 years (even if the bank is giving you a fee for letting them have it to give to others) and as hard as it is to imagine- jobs and profits in the year 2009 are being taken to pay for a vacation house in 2050. This causes deflation if this encourages fewer people to spend and to save instead.  Its the democrat's fault for not taking advantage of the safety net and getting back on his feet. He is helping to raise in inflation and is encouraging others to get something for nothing. This just increases inflation even more.

The point is this- Let he is who is without sin cast the first stone lest our system simply implodes on the weight of people who are not willing to help themselves by helping the undeserving.

Now, I am not talking about a single payer system. Maybe we could have implemented one if that was one of Roosevelt's first programs during the Depression....but we have become dependent on people who try to make a living by selling their own insurance.. We're Americans. And that means that we have to haggle for what we need. What we need to do then is to make sure that people can haggle. Otherwise, the purpose of having a forum for haggling is pretty moot. It hurts to see that a lot of republicans believe that "Government Free" means "Free Market". It's like one of those "Fat Free" myths that keeps people so darn fat in our neck of the woods.

[Verily]

What I am worried about is the fact that simply subsidizing insurance would give the wrong market signals to an industry that isn't that accountable to market forces at it is. Trying to subsidize our mistakes will simply cause too much inflation for my liking...either that or higher taxes.

Universal health care would subsidize every mistake anyone has made, no matter their balance sheet or income statement.  Is that just?

Well, as Angry_Weasel said, that's the whole point. It's certainly what the current insurance system does. Most people never see most of the money they pay into insurance back. ("Pay" may be indirect if they get insurance from their employer, but they're still paying for it considering that their salary would be higher if their employer did not provide insurance.) They just don't ever get sick/injured enough.

A lot of that goes to paying for others' coverage, while some goes to research into how to screw more people out of insurance. At least a government system would eliminate the second part.

[Badger]

Suppose C is at Harvard Law School, and is destined to make millions?  Should the taxpayers subsidize this soon to be "rich," for 40 years because the guy was too arrogant or feckless to get health insurance for relative pennies? 

I guess that is the best I can do. Extreme cases sometimes make for bad policy. Still if one can afford it, and made a financial mistake, I just don't see why the taxpayers should bail that person out. In any event, where do you draw the line between the feckless 25 year old, and the 58 year old Torie? When does one who can afford it become totally financially responsible for one's financial decisions, who has the dough to pay for the mistake?

To the extent public health care is supported by progressive taxation with the Harvard Law grad in this scenario gets out of school he'll be earning big bucks, and paying a portion of those big bucks back in income taxes which in his case will not only pay back the cost of his insurance in spades but also cover the cost of others less well off who use the system as well. The long term economic benefits of keeping this guy alive and healthy to become a productive memeber of society are enormous and obvious.

[Torie]

Suppose C is at Harvard Law School, and is destined to make millions?  Should the taxpayers subsidize this soon to be "rich," for 40 years because the guy was too arrogant or feckless to get health insurance for relative pennies? 

I guess that is the best I can do. Extreme cases sometimes make for bad policy. Still if one can afford it, and made a financial mistake, I just don't see why the taxpayers should bail that person out. In any event, where do you draw the line between the feckless 25 year old, and the 58 year old Torie? When does one who can afford it become totally financially responsible for one's financial decisions, who has the dough to pay for the mistake?

To the extent public health care is supported by progressive taxation with the Harvard Law grad in this scenario gets out of school he'll be earning big bucks, and paying a portion of those big bucks back in income taxes which in his case will not only pay back the cost of his insurance in spades but also cover the cost of others less well off who use the system as well. The long term economic benefits of keeping this guy alive and healthy to become a productive memeber of society are enormous and obvious.

I take your point, but I suspect the Harvard lawyer will keep himself healthy - subsidized or not.   And yes, I suppose one can say that what subsidies the rich that goes in one pocket, at once via higher taxes (if there are higher taxes, and the Dems just decided that that is only for those earning over 1 million per year, which exempts among others yours truly - hooray!) goes out the other pocket, in a game of mu$ical chairs.