Yet More on Health Care

This is the fifth post in oldstyleliberal's series on the current health care debate among the presidential contenders. This morning's Baltimore Sun has a front page article on the topic, available here. Reporter David Nitkin writes in the article, "Clinton, Obama clashing on health," about the fact that Sen. Hillary Rodham Clinton is calling for mandatory health insurance for all Americans, while Sen. Barack Obama would leave the choice to buy health insurance optional for adults and mandate it only for children. (Both would set up a new, government-run health insurance provider that would insure all comers who do not have or cannot get private health insurance through their workplace or on their own.)

The Nitkin article says, "Former Sen. John Edwards of North Carolina, New Mexico Gov. Bill Richardson and Sen. Christopher J. Dodd of Connecticut have included the requirement [to be covered by health insurance] in their health plans, making Obama the most notable outlier in the party's presidential field." It does not mention Rep. Dennis Kucinich by name as the main presidential proponent of a "single-payer" system of health care financing, called in the article "a Medicare-style government program that replaces private markets."

The article seems to suggest that none of the Republican candidates are offering universal-coverage plans for health insurance. Oddly enough, former Massachusetts Governor Mitt Romney, a GOP presidential hopeful, was responsible for shepherding through the legislative process in his state the only state-level program to date that mandates health coverage. The article says it is too early in the game to see whether that program, which assesses the uninsured with a financial penalty unless they buy insurance, will actually bring about universal coverage. Mrs. Clinton's proposal for the country as a whole is very much like the Massachusetts system.

Switzerland and the Netherlands are the only other countries with a health insurance mandate, but their plans are notably dissimilar to the Clinton proposal. So it's anybody's guess how many people would fail to buy "mandatory" health insurance under the Clinton system, either because they were legally granted exemptions or because they simply scoffed at the law.

Nonetheless, Clinton's side is accusing the Obama proposal of failing to cover everybody. The Obama folks say the "young invincibles" who today opt out of the private health insurance sector could be brought in without a mandate. These are the youthful, healthy souls whose finances are stretched thin enough, during the years in which they are getting started in independent life, that the extra burden of paying premiums for insurance they don't "need" appears an unjustifiable expense. Obama wants to change the law to allow them to continue to be covered under their parents' health insurance until age 25, regardless of whether they are still in school.

He also favors "reducing the costs of insurance, which would almost certainly require huge government subsidies for the poor. Obama says it makes most sense to focus there first" — rather than go immediately to a health insurance mandate, as Clinton wants to do.

The reason both Clinton and Obama want to bring the "young invincibles" and others without health insurance into the system is not just to make sure no one gets slammed with huge, unpayable bills if their health suddenly deteriorates. It is also to make sure those who continue to have good health do their part to spread the risk of illness and its associated cost over as broad a base as possible, providing their fair share of the money to finance the system as a whole.

Supporters of the Clinton mandate are, the article says, intent on changing the thinking of Americans. Robert Blendon, a health policy professor at Harvard University's Kennedy School of Government, is in the Clinton corner:

The details of a mandate are less critical than the change in thinking that such a requirement would instill, Blendon said.

"The most important thing you want to achieve is a cultural change which sort of accepts the responsibility that people have coverage," the Harvard professor said. The country must create an attitude where everyone is expected to have health insurance, he said, so "when you go into a doctor's office, they are horrified if you don't have coverage."

Clearly, under the Obama proposal there would be less of an impetus toward such a cultural change of attitude. Even though Obama's voluntary-for-adults approach to health insurance might wind up covering just as many Americans as Clinton's mandatory-for-all approach, it would not stigmatize the uninsured. oldstyleliberal favors the Obama approach for this reason. He does not approve of stigmatizing individuals such that "when you go into a doctor's office, they are horrified if you don't have coverage."

***

Still, oldstyleliberal feels Barack Obama's approach to health care financing could be improved by including something most of the Republican candidates support: enlarged health savings accounts.

HSAs are only a few years old, and many Americans have yet to hear of them. In their current form, they allow Americans to set up accounts that are like "401(k)s on steroids." Account owners can contribute so many dollars a year to these accounts, and their employers can likewise make contributions up to a certain amount. Both types of contributions are exempt from income and payroll taxes.

If the owner of the account wants to pay for his or her medical expenses out of the HSA, or for the requisite high-deductible health insurance premiums, that too is tax-free — no matter what age the account owner is. After age 65, any withdrawals for all other types of expenses are also tax-exempt. Before age 65, non-medical withdrawals are taxed as income.

Currently, the rules for HSAs insist that the owner have high-deductible health insurance to supplement the accounts. HSA owners are responsible for paying their own way, in terms of their ongoing medical expenses, until the relatively high annual deductible is reached each year. Beyond that, owners continue to pay copayments for their health services, at a set rate, until a certain number of dollars of out-of-pocket expenses (above and beyond the deductible) has been accumulated. Until that point is reached, the requisite insurance covers only those covered medical expenses above and beyond the copays. From that point on, the health insurance takes over and pays all covered medical expenses.

The assumption here is that the deductible amounts and the copayments would come directly out of the HSAs, assuming they contain enough money to begin with, since using HSA funds for medical expenses is tax-free.

HSA advocates want to remove many of the restrictions and limitations of the current law as it pertains to health savings accounts, bringing in the era of so-called "large HSAs." They want to increase the contribution limits to allow employers to deposit the full value of workers' health benefits directly into their HSAs; eliminate the health insurance requirement for HSAs entirely; and allow tax-free HSA withdrawals for all voluntarily incurred health insurance premiums, not just those spent on the currently mandatory high-deductible health insurance.

In other words, owners of "large HSAs" and their employers would be able to choose not to obtain/provide health insurance coverage at all; to choose the currently mandatory high-deductible health insurance; or to choose an "ordinary" health insurance plan that does not feature high deductibles and/or high limits on out-of-pocket copayments. Those who wish to do so could combine a "large HSA" with their existing insurance coverage and then, if they want to later, optionally migrate either to high-deductible coverage or to no coverage at all as they become comfortable with making such choices on their own behalf.

Proponents of "large HSAs" believe they would put more decisions about health-care purchases in the hands of consumers themselves and bring all the benefits of informed marketplace participation to the health-services and health-insurance domains. Competition would flourish. There would be fewer incentives for those who now have comprehensive, low-copay, low-deductible coverage provided by their employer to continue to demand more health services than they would if they were paying the costs themselves. These individuals and their families would opt to save money in HSAs instead and economize on medical outlays, resulting in less health spending overall. Studies show that the "extra" services today demanded by the comprehensively insured don't really improve their health status or life expectancy, but they do inflate health-services prices. Health-services prices would accordingly come down if "large HSAs" were enacted into law.

Opponents of "large HSAs" object that the tax-free aspects of a growing plethora of them would drain the Treasury of needed revenues, in terms of foregone income taxes and payroll taxes. Supporters counter that "large HSAs" would offset the anticipated drain on the Treasury associated with Medicare, as baby boomers cross the age-65 threshold.

Opponents also object that there is no reason to be sure "large HSAs" would spread health risks and their associated costs equitably over the entire population, the way a Clinton-style universal-coverage program supposedly would. An Obama-style universal-access plan would presumably make it less likely that all of the medically needy among us would have insurance.

Still, it's not clear that mandated universal coverage would turn out to be truly universal. And it would stigmatize those who lacked it. That's why oldstyleliberal thinks we ought to try an Obama-style universal-access plan, augmented with "large HSAs," before proceeding — and then only if necessary — to a full-fledged Clinton-style mandate.

More on the Health Care Debate

In three earlier posts to this Health Care series oldstyleliberal addressed one of the primary issues looming in the 2008 election, that of health care and whether or not all Americans have a right of access to it at reasonable prices. That topic leads naturally into the question of health insurance, which some 47 million of us (16 percent of the population) do not have.

The Democrats running for president tend to follow the lead of the top two contenders, Hillary Clinton and Barack Obama, in proposing some form of universal access to health coverage through job-based, privately purchased, and/or public insurance plans. The public insurance plan, offered by the U.S. government, would be new. It would become mandatory for Americans without any other health insurance, under the Clinton proposal. Under the Obama proposal, only coverage for children would be obligatory.

The leading Republican contenders Rudy Giuliani, Mitt Romney, and John McCain eschew mandatory insurance plans, while seeking changes to the present system that would give health care consumers more power to look after their own needs. Among the proposed changes are an end to state regulations that block buying health insurance from providers in other states, such that there might be wider competition for customers and lower premiums. Also being called for by GOP contenders are enlarged health savings accounts that would make savings for future health needs and spending from these accounts to cover current medical expenses fully tax free. If HSAs were made flexible enough, the thinking goes, they could obviate the need for insurance benefits to cover any except the most catastrophic medical expenses.

oldstyleliberal finds it difficult to decide between the two general approaches. The Democrats' solutions would pretty much guarantee universal health insurance coverage at decent rates, with only a tiny percentage of Americans falling through the cracks — or, at least, in the case of the Obama proposal, universal health insurance access at fair premium rates. But it is not clear to oldstyleliberal how these relatively "liberal" approaches would hold down health care costs without relying on that dread word rationing, or else depending on taxes to cover costs.

From the point of view of an economist, prices depend on the relationship between supply and demand. In a totally free competitive market, when the quantity demanded of goods and services exactly matches the quantity offered by sellers, a price level is thereby determined, and the amount of sellers' commodities actually taken by buyers is also set. Should demand go up from there, sellers naturally raise prices to cover the extra costs of providing goods and services in greater quantities.

When people have health insurance with low copays and small up-front deductibles, they tend to require more doctor's appointments, more diagnostic tests, more medical procedures, and the like — more, that is, than they would seek if they were paying fees out of pocket or out of a health savings account, however tax-free the money is. Economically, that can't help but nudge the supply-and-demand balance point up to a higher overall price level.

To offset that, private or public insurance plans can ration care. One way to do that is simply not to cover certain types of care. Or, certain expenses can be only partly covered, such that the patient still owes money after the insurance plan pays its share. Consumers tend to require less of the types of care their insurance plans don't fully cover.

Another way to ration medical care is to limit the supply such that there develop long waiting lines. People who are confronted with long queues often forgo "unnecessary" care entirely. Or, there can be a form of triage involved, such that the neediest get advanced to the front of the line while those with supposedly less urgent needs wait and wait.

Would the Democrats' public health insurance plans accomplish the necessary rationing in a fair, politically feasible, economically realistic way? Depending on your point of view, one advantage of the current private system is that it's hard to call politicians and government bureaucracies on the carpet when health-care prices, insurance premiums, or quality and availability of care don't meet with our approval.

Another advantage to private health care financing is that there is no impetus to burden taxpayers with the costs of the medical benefits covered by a public insurance plan, as a way of sidestepping unpalatable rationing measures or for any other reason. Of course, federal taxpayers do pick up the tab for Medicare and Medicaid already, but would the Democratic candidates' health care plans cost the taxpayers yet more? oldstyleliberal is not entirely certain that either the Clinton or the Obama plan would pay for itself without taxpayer burdens and/or unacceptable rationing of health services.


Of course, there is a strong argument to be made in favor of doing just that: setting up a health care financing system that allows every American access to all of the medical care they need when sickness strikes, and hang the cost. The philosophy here is that we all stand at risk of catastrophic illness at some point in our lives, so we should all share the high costs of treating those who are sick now. The only question is, by what mechanism(s) ought the cost burden be shared?

When insurance payouts to beneficiaries and their health-services providers are entirely covered by premiums being paid in by policyholders, that's one way to share the cost burden. Another way is to cover some or all of the payouts using general revenues accrued from taxes paid in to the government. Yet another way is for, say, a hospital or clinic to fail to recover the costs of treating an uninsured patient and to pass those costs on to its paying customers in the form of higher bills.

However the cost burden gets shared, it does get shared, even today in the absence of universal access to a public health insurance plan. Few people who get catastrophically ill have a big enough nest egg to cover the huge costs on their own.

The costs that don't get shared are the ones that are never incurred. Chief among these are the costs of routine preventive care, prescription medications that head off (expensive) illnesses before they strike, and other items and services that the uninsured often go without. For example, diabetics need to self-monitor their blood sugar levels and get regular blood tests. If they shirk these necessities because they can't afford their high associated costs, they are liable to need even more expensive health services later on, when the diabetes takes its toll. Then, if they have a diabetes-related heart attack and wind up in the emergency room, those costs will likely be picked up indirectly by the hospital's paying customers.

But it would have been cheaper for society to pay for the preventive measures that would have avoided the heart attack in the first place, even if only by using tax monies to help defray the health-services outlays of a public insurance plan.

The current system, because it leaves so many Americans uninsured, tends to shift costs from (admittedly expensive) diagnostic services and preventive care to yet more expensive emergency services and procedures that might have been avoided with better medical care all along. So the burden of sharing these costs — whatever the mechanism of sharing — gets skewed away from preventive, prophylactic care. The result is that the total shared cost of health care in America is higher than it needs to be. It costs a lot more to amputate a diabetic's foot and rehabilitate the patient than it does to keep the patient's blood sugar levels in check right along.

Notice that there are at least two ways in which the current system inflates health care costs in America. One is to discourage the uninsured from getting routine screenings and preventive care, leading to exorbitant costs later on. Another is to encourage those who do have insurance to obtain a lot of less-than-crucial health services, to the extent these services are covered by insurance. As a result, while some people are lucky enough, because they have comprehensive health insurance, to get their tummy tucks and eye jobs galore for next to nothing, others have to do without the mammograms and colonoscopies that might save their lives.

If that seems unfair, then perhaps we need public, government-run health insurance plans, despite their possible burdens on taxpayers down the road, and despite the fact that they might force some form of rationing of health services on the American public.

The Candidates' Health Care Plans, Part 3

In The Candidates' Health Care Plans, Part 2 oldstyleliberal looked at the health care proposals of two of the leading Democratic candidates for president, Hillary Rodham Clinton and Barack Obama. Both plans involve augmenting current private insurance plans by setting up a public, government-run insurance program from which individuals and families would be required to obtain health insurance — if, that is, they didn't buy private insurance on their own or get coverage from their employer. This mandate would apply to all uninsured Americans, in the Clinton plan, or to all uninsured children, in the Obama plan; in the Obama proposal, uninsured adults could continue to opt out of private plans and the public plan.

As he said before, oldstyleliberal worries that a "mandatory" health insurance system, government-run, would encroach too much on citizens' freedom of choice to make their own decisions about their own health care and insurance needs. That's why oldstyleliberal, though he is a Democrat, went looking to see what the various Republican candidates have to say about the issue.

This page gives a side-by-side analysis of the proposals made by Rudy Giuliani, John McCain, and Mitt Romney, three of the current leaders in the GOP field.

These three candidates entirely avoid mandates requiring uninsured citizens to buy health insurance. They all want to change federal tax laws, particularly with respect to income taxes, to "incentivize" taxpayers to obtain health insurance privately. States would receive federal subsidies, block grants, or other encouragements to enroll the uninsured in voluntary public plans of their own, craft health reforms, etc. All these plans would expand private health savings accounts (HSAs), which in a more restrictive form have been available under federal law since January 2004, to make them more attractive to Americans as options to, or supplements for, privately purchased or employer-provided health insurance.

Healthy Competition by Cannon and Tanner

All of these moves are intended to shift market power toward patients, away from federal and state governments, away from employers, and away from insurance companies. They are in the spirit of the approach to health care of the Cato Institute, a libertarian think tank. The book Healthy Competition: What's Holding Back Health Care and How to Free It, by Cato's Michael F. Cannon and Michael D. Tanner argues that the woes of the health care system today would diminish, if not vanish, with greater competition among health services providers for the dollars of consumers — i.e., the patients themselves.

On page 14 Cannon and Tanner state, "By hindering the competitive process, government actually makes it more difficult for the medically needy to obtain care." By that they mean that the present federal policy — not taxing employers' outlays in providing health insurance to their workers — blunts the employees' own market power. It keeps the workers, as health services consumers, from going to doctors and hospitals that are not part of the coverage plans/networks their employers sign up for, for example. That limits competition in providing health services, causes prices to be higher than they would otherwise be, and encourages consumers to obtain more services than they really need, since they are insulated from paying most of the fees themselves. It also fails to provide a market-oriented mechanism to weed out health services providers whose quality of care is substandard.

If consumers could bypass the current system and (for instance) set up their own unrestricted, tax-free health savings accounts, they could actively shop for the health services and providers that give them, in their own estimation, the best care for the least money.

At least, that is the theory. It is a theory that makes a lot of sense to oldstyleliberal. But he worries that it is no slam dunk that a fully market-based solution would let the "medically needy" among us be able to afford all of the care they need.


Stripped to bare essentials, the current health care financing system, imperfect as it is, is intended to allow American health care costs to be paid for by someone else — someone other than the person receiving the health care.

A couple of years ago when oldstyleliberal had to have heart surgery, the total tab, before his insurer adjusted the amounts originally charged by the service providers, was over $70,000. After adjustments of around $24,000, the tab was reduced to approximately $44,000, of which yours truly paid only a little under $3,900 out of pocket. The insurance covered over $40,000.

Translation: premiums paid in by other people in the same Blue Cross-Blue Shield insurance pool kept oldstyleliberal from having to shell out more than $40,000 of his own money.

Looked at another way, oldstyleliberal recouped (very roughly) 25 years worth of his own earlier premiums that he had paid into the health insurance system over time. But if he had not put that much into the kitty over the years, his benefits would have remained the same. It's more accurate to think of his expenses as having been picked up by other current premium payers.

Each one of those payers, if they live long enough and have enough of their own medical woes, can expect to see the favor returned someday. Still, it's a crap shoot whether any one person or any one family will ever recoup their accumulated premiums. Some people will put more money into the system than they take out, while others will take out more than they put in. The latter will go to their grave having had some portion of their lifetime medical expenses paid for by someone other than themselves.

Depending on how far market-based health care reforms are taken, it is entirely possible that few Americans will continue to have health insurance that pools their financial risk with that of many, many other people, so as to allow the medical expenses of Peter to be paid for, sometimes, by Paul.

According to this Wikipedia article about health savings accounts, for instance, increased reliance on of HSAs could cause "people who live healthy lives [to] leave insurance plans while people who chose to live unhealthily [would] avoid HSAs." Then the medically needy might find that the insurance plan they have (if any) ceases to be affordable, as canny lower-risk individuals switch to so-called "large HSAs" and leave behind those whose medical bills are chronically high. With payouts per person, on average, going higher, the insurance companies would be forced to raise premiums. Those who couldn't afford the steeper premiums and who lack HSAs might find themselves frozen out of the system entirely.


So it looks as if there is a tough choice to be made by voters. Do they want a health care reform package that sets up mandates to join a new, government-run insurance plan, if only as a last resort, in lieu of private insurance? If so, then one of the Democratic plans should fill the bill. But such a program would probably further distort today's health-services markets by blunting the market power of the individuals being served, further decoupling their choices as consumers from their own pocketbook exigencies, and increasing even further the market power of impersonal bureaucracies to make choices on their behalf.

Or, do voters want a system that allows people to shop more directly for their own medical services on the basis of quality and cost? That would put the burden on all of us to be canny consumers of "products" that — when we are sick, fearful, and in need of them the most, we don't like to think of as being in the same bargain-hunting category as computers and cleaning services.

(Cannon and Tanner talk of Americans who, needing heart surgery, chose to have it done in India where success rates were just as high but costs were much lower. But how many of us would even consider that possibility? oldstyleliberal, when he had a heart operation, would never have considered such an option, even if it had occurred to him at the time to do so.)


It is certainly possible to mix and match initiatives from today's two main styles of health reform proposals. There could be, for instance, a mandatory public health insurance plan set up for the currently uninsured, as long as they didn't set up "large HSAs" instead. Whether such a hybrid approach would make things better or simply cancel out one another's strong points is something oldstyleliberal would not care to speculate on. That's surely a job for Congress, which will have to pass upon the proposals of whatever candidate, from whichever party, takes the oath of office as president in January 2009.

The Candidates' Health Care Plans, Part 2

In The Candidates' Health Care Plans, Part 1 I looked at the "single-payer" health care proposal of Democratic presidential candidate Dennis Kucinich and concluded it had little chance of becoming law. Though it is simpler to understand than most of the other candidates' proposals, since it basically extends Medicare to include all Americans, it is hated by the powerful insurance companies, whom it would mostly put out of business, and by conservatives who (erroneously) deem it the next thing to socialized medicine.

The other candidates from both major parties have alternative health proposals which do not set up the government as everybody's insurer. Many of the hopefuls claim their plans are, like the single-payer plan, "universal," in that all of the current 47 million who lack health insurance would acquire it.

Some, furthermore, are "mandatory" plans in which all individuals or families would be required to obtain health insurance. If they can't get it with the financial assistance of an employer — customary today, but far from universal — and even if they have pre-existing medical conditions which currently bar them from getting health insurance at all, they would be required to purchase insurance.

Those who simply cannot afford the premiums would be subsidized to one degree or another, in most of the plans. Typically, the subsidies would be accomplished via income tax adjustments.

Barack Obama and Hillary Rodham Clinton, the two leading Democratic hopefuls, each have non-single-payer plans that differ in details but nonetheless are both supposedly "universal" in their coverage. The Clinton plan is (according to this article from Fact Checker) intended to be a true "universal coverage" plan that calls for fully "mandatory" health coverage.

The Clinton plan, because it as not a true single-payer plan, would nevertheless fall slightly short of universal coverage, the Fact Checker article says: "The system proposed by Clinton is more analogous to the government-subsidized private insurance system in the Netherlands, where roughly one and a half per cent of the population is estimated to fall through the cracks."

The Obama plan is more of a "universal access" plan that does not actually mandate the purchase of insurance by adults, though it does make health insurance mandatory for children. Accordingly, there is reason to suspect that more Americans would remain uncovered with the Obama approach than with the Clinton approach.

Both Clinton and Obama would set up a government-run or "public" health insurance program to coexist with all the private plans run by insurance companies. The public plan (or plans) would be available to all citizens, but those who opt to stay with private insurers/employer-provided coverage could. In Clinton's proposal, those who have no private insurance whatever would be required to join the public plan. In Obama's, adults could opt out of health insurance coverage entirely — but their children would be required to have at least the public health plan.

The questions that most interest oldstyleliberal about such plans as Clinton's and Obama's concern two things: (1) Who receives what health services? and (2) Who pays for them?

Right now, people with no health insurance forgo a lot of non-emergency health services the rest of us take for granted. When the uninsured have medical problems, they may go to a free clinic or, more likely, visit a hospital emergency room, where those who have serious conditions may be admitted to the hospital for surgery or further treatment. The costs get passed along to the hospital's paying customers or their insurance companies. That may or may not be fair, but at least those services get paid for.

The forgone health services — routine checkups, screenings, preventive care — don't get paid for, because they never happen. But they do get paid for later, in the form of very expensive emergency services that might have been avoided with regular, cheaper care all along. For example, regular mammograms (cheap) head off last-ditch mastectomies (expensive).

Thus does the who-pays-today question (nobody) get turned first into the what-services-today question (none), then, later, the what-services-tomorrow question (expensive ones), and finally the who-pays-tomorrow question (whoever the costs of emergency services for the uninsured get passed along to). Meanwhile, the total health care financing burden that accumulates over the years is higher than it otherwise might be (too few mammograms now, too many mastectomies later).

Of course, when there are 47 million uninsured Americans, there are other hidden costs that don't have dollar signs in front of them. Many mastectomies come too late. As we debate these health plans, we should never forget that.

At least ideally, under the Clinton plan and the Obama plan, all Americans would have health insurance and thus get regular checkups, screenings, and other preventive care, which would be paid for mostly by the public fund or a private insurance fund. But the questions still arise: who puts how much money into the public fund, and who draws how much out?

The public fund would be stocked with money from (a) premiums paid in by the people who are insured by it and (b) contributions from their employers, where applicable. Any employers that do not provide "meaningful" private health coverage to their workers would have to contribute a percentage of their payroll to the public fund, under the Obama plan. Under the Clinton plan, only large businesses would face such mandates, but small businesses would be given tax incentives to contribute to the public fund or provide private insurance.

Notice that some of the money that individuals and families pay into the public fund as premiums is, in both plans, offset by tax breaks. Part of the answer to the who-pays question is, if only indirectly, the taxpayer whose taxes are higher because the tax liability of the recipient of the tax breaks gets reduced. Likewise, ordinary taxpayers indirectly foot the bill for tax incentives granted to employers.

Tapping into the public plan's fund of money, once it has been paid in, would disproportionately be those among the insured who need the most health services. Many who are young and "never get sick," if they had public coverage, would be paying in premiums that they would not recover until they are older and sicker.

If you are, say, 24 years old, healthy, unmarried, without children, without much in the way of savings, and without a job that pays for your health coverage, you might not want to fork over regular health insurance premiums that you might "never" recoup. Under the Clinton plan, you would have to. Under the Obama plan, you would not ... until you had a child. Then you would have to insure your child's health, but not necessarily your own.

Let's say Clinton gets elected and her health plan enacted. Imagine you, the healthy 24-year-old, never obtain private insurance and sail through the next 40 years with few medical bills. Then, at age 64, your health starts to deteriorate. Your medical expenses go up. In the form of insurance benefits from the public fund you've been paying premiums into for 40 years, you start drawing down the surplus funds you've built up. If you live long enough in compromised health, you may even be "lucky" enough to see all the dollars you paid into the kitty returned to you in the form of benefits. You may even be "very, very lucky" and over your declining years draw benefits in excess of what you had paid in ... because you're that sick and need that many health services to carry on for that long a time.

Or, you could die, with or without a long and drawn out descent into frailty, before you've recovered all your premium payments. If you get hit by a truck at age 63 just before the onset of your costly senescence, you lose big time. From a strictly dollars-and-cents point of view, the whole thing is a crap shoot, and the monetary "winners" are the ones with long and expensive periods of ill health, prior to the grave. Lucky them.

The biggest "winners" of all, still thinking along those lines, are those fortunate enough to have lifelong chronic illnesses and "pre-existing conditions" which now cause private insurers to turn them down for coverage. Under the Clinton plan, our hypothetical 24 year old who succumbs to a Mack truck attack at age 63 without having a sick day in her life will be footing the bill for an HIV/AIDS patient who is the same age and lives equally long, thanks to super-expensive cocktails of drugs taken daily for almost 40 years.

So, yes, there is a potentially wide cost-benefits disparity built into a "mandatory" plan such as Clinton's. The Obama plan, though it is mandatory only for children and not for adults, would also produce a disparity. Some adults who opt in will never recover their premiums; others will recover them in spades. Of course, the same thing can be said of any insurance plan. But to the extent that participation in them is optional, we get to pick our poison. With a mandatory plan, we have no choice.

Given that most Americans exhibit a preference for personal liberty and free choice, are universal health-insurance mandates, such as the Clinton plan, or limited mandates, such as the Obama plan, justified? That, oldstyleliberal believes, is the key question here.

How does our liberty to opt out of buying health insurance stack up against the liberty of other Americans to have access to good, timely medical care that they can afford only if somebody else subsidizes it — through, say, making premium payments that exceed the cost of benefits actually received by the premium payer?

If too many of the healthy ones opt out, the whole system goes kerflooey. The public plan would have to charge the sicker ones who want to opt in exorbitant premiums, which would drive them away, which would spell the demise of the plan. We seemingly would be back to square one.

Hence, an important question oldstyleliberal intends to address in future posts to this series is whether any of the presidential candidates are offering health care plans that are purely optional but would nonetheless work to provide affordable, good, timely medical care to all Americans.

The Candidates' Health Care Plans, Part 1

oldstyleliberal has decided he needs to try to sort out the debate among the Republican and Democratic presidential hopefuls concerning health care coverage. The problem: a hefty number of Americans have no health insurance — reportedly, 47 million, or 16 percent of the population — which is considered a bad thing. Coupled with that is the high cost of health care itself and of health insurance premiums. The proposed solutions? Well, they vary with the candidate. More on that in a bit.

First off, though, oldstyleliberal applauds the Henry J. Kaiser Family Foundation for its online side-by-side analysis of the candidates' similarities and differences on health care proposals, accessible at this web page. oldstyleliberal also salutes the health care archive at Fact Checker, a compendium of the ways in which the candidates' statements about this and other issues are at variance with the facts. When a candidate fibs, Fact Checker hands out to him or her a dubious award it aptly calls the Pinocchio.

Before trying to sort out the tangled politics of health care today, oldstyleliberal would like to point out some of his biases and assumptions going into the process. First of all, he wonders why it is considered necessary for all Americans to have health insurance. Specifically, does a lack of insurance keep the uninsured 47 million from receiving the health services they need? And if they do get some or all of those services and don't have enough money to pay for them out of pocket, how do these services get paid for?

Based on something he read years and years ago in, he believes, Atlantic Monthly, oldstyleliberal is under the impression that those without insurance and without fat pocketbooks do in fact get at least some of the health services they require. When illness or emergency strikes, they go to free clinics or to hospital emergency rooms. If they are in a bad way, they can even be admitted to a hospital, where they can receive treatment or undergo surgery if need be. The cost of all that gets passed along to paying customers in the form of higher bills.

But that system of what amounts to informal "risk pooling" — without benefit of a formal insurance plan to manage and fairly distribute the pooled financial risk, that is — has many drawbacks, not the least of which is the failure of the uninsured to get the preventive care and chronic-disease treatment that would avert the emergency in the first place.

Insurance companies are in the business, first and foremost, of pooling risk. Health insurers receive premiums from those who are covered — along with, usually, contributions from their employers — and they pay out to health care providers some significant portion of the insureds' accrued charges for services rendered. The majority of the insured actually receive fewer dollars in benefits than they pay in premiums each year ... until they get sick, that is.

The minority of the participants in the insurance risk pool who in any given year actually get treated for major illnesses (or for normal but high-cost rites of passage such as pregnancies) are the ones whose benefits-to-premiums ratios are high. Averaged over the entire risk pool, though, the total payouts by the insurance company in any given year are enough less than the total of premiums-plus-employer-contributions to leave a tidy profit for the company.

Most of us who have health insurance coverage depend on employer contributions to defray part of its cost — or, if we're retired, on insurance contributions that are part of our retirement packages. If employer contributions vanished, we might then receive the erstwhile contributions in fatter paychecks instead, but if health insurance was not somehow made mandatory for all of us, many of us would — let's admit it — squander the extra income on necessities like food and luxuries like cell phones and trips to Las Vegas. (That's why many of the current proposals are for "mandatory" programs.)

So the current system works pretty well for all but the 47 million citizens who lack any health coverage whatever. As oldstyleliberal understands the situation, the truly poor and chronically jobless can fall back on Medicaid and, if they're seniors, Medicare (which also covers middle-class retirees). The group without any health coverage at all are, in many cases, those who far enough above the poverty line not to qualify for Medicaid, but they do not have jobs with employers that will pick up "their share" of the tab for health insurance coverage. These uninsured can't afford the steep premiums on their own, so they do without.

Another portion of uninsured Americans have been turned down for coverage because of high risk factors like pre-existing medical conditions. oldstyleliberal does not fully understand why insurers cannot accept those with dicey health conditions into the risk pool, and raise premiums for one and all so as to keep the high costs associated with the new, high-risk members from draining the pool. But that apparently does not make good business sense, presumably because if one company did it, all its low-risk customers would flock to other insurance companies whose premiums remained low.

Furthermore, some "economically uninsured" who lack jobs that provide health coverage are in fact the same people as in the high-risk, poor-health group whom insurers spurn, since the relatively poor tend to have more pre-existing conditions than the well-off among us, who have better access to preventive care.


Now for some of the solutions offered by the presidential candidates.

Democrat Dennis Kucinich proposes a system of the "single-payer" type which at one time oldstyleliberal was in favor of. A single-payer system would basically be like Medicare, but for all citizens, not just those over a certain age. (Medicare and Medicaid would be folded into it.) As oldstyleliberal understands it, the government would run the system, but health-care providers who are eligible for cost reimbursement would remain private. There would be no premiums or employer contributions. Instead, according to this rundown of the Kucinich proposal:

The plan would be financed through a federal payroll tax increase from 1.45 percent to 4.75 percent for both employee and employer; stock transfer tax of 0.25 percent on both buyer and seller; income tax surcharge of 5 percent on annual income between $184,000 and $279,999 and surcharge of 10 percent on annual income of $280,000 or more; and repeal of the 2001 and 2002 Bush tax cuts for the wealthy.

Such a system would ostensibly cover 100 percent of the population. By making the risk pool as large as possible, it would allow one and all to be insured without excessively nicking the healthy to pay for the sick. It would hold down overall health care costs by blocking unnecessary, or unnecessarily pricey, procedures. There would also be savings, supporters say, due to consolidating the numerous current insurance companies' high overheads into those of one, supposedly efficient single bureaucracy. (The current insurance companies could still offer supplemental coverage, however, to those willing to pay for it privately.)

Critics say such a publicly financed system would fail to live up to its promises to reduce costs, though, because government bureaucracies are inherently wasteful. They also say similar systems tried in countries like Canada do not have consistently good results in terms of improving the quality of health care. Opponents of single-payer systems claim further that eliminating market forces in the health-care industry would make things worse instead of better.

Some critics even say a single-payer system is tantamount to "socialized medicine" in which the government actually tells citizens what health-care providers they can use and what services they can have. oldstyleliberal thinks that charge is completely bogus. Patients would still be able to choose their doctors and hospitals and get the care they feel they need.

Perhaps the biggest liability of single-payer proposals is that they have only a small base of political support. They have been raised and rejected in the past without attracting major support in Congress or among politicians in general. Naturally, the health insurance companies hate the proposals, since they would lose the bulk of their business, so lobbying against such schemes is intense. If somehow Mr. Kucinich managed to become the Democratic nominee and win the general election — and it would take a miracle for that to happen — he would face insurmountable obstacles in getting his proposal enacted.

Meanwhile, not of the other Democratic and Republican candidates, to oldstyleliberal's knowledge, favor a single-payer system. More on their alternatives in the next post in this series.

Checking Back In As a Libertarian

It's been since July 2007 that this blog has been in abeyance — shame on oldstyleliberal!

The 2008 presidential election run-up is leaving oldstyleliberal significantly underwhelmed. He tends to support Democrats, not Republicans, and he finds the present crop of Democratic front-runners less than inspiring. (The Republicans are worse.) Asking himself what the matter could possibly be, he mentions to himself that there is a vast dearth of two desirable characteristics in the present lineup of presidential hopefuls: leadership, and an absence of hypocrisy.

oldstyleliberal defines leadership as the ability to change people's minds by appealing to their reason, thus bringing about a national consensus on issues of importance. But what we are actually getting is a sophisticated version of hypocrisy, in which the candidates' positions on things like the war in Iraq are so mush-mouthed, so qualified, so contorted, they seem to match our own positions without necessarily really doing so.

Hillary Rodham Clinton, for instance, wants to have it all ways on the Iraq war, according to this post on The Fact Checker blog at The Washington Post. Although her campaign literature says

Hillary will begin immediate phased withdrawal [from Iraq] with a definite timetable to bring our troops home

her actual position does not actually commit her "to pulling all U.S. troops out of Iraq [even] by the end of a second presidential term." The Post adds:

Clinton has made a flat promise that the United States will "get out of Iraq" while she is president. She says she has a plan to "end the war" and "a definite timetable to bring our troops home." On closer examination, it turns out that all these promises are so carefully hedged as to be virtually meaningless. There is no "definite timetable" to bring the troops home or end the war. She has said she "wants" to begin troop withdrawals in the first 60 days of her presidency-but has also talked about leaving a "vastly reduced residual force" in the country for "a limited period of time."

Clinton's pledge to "end the war" contains so much fine print that it is hardly a pledge at all, more a general aspiration. She has described several "vital U.S. national security interests" in that country, including fighting al-Qaeda, protecting the U.S. embassy, training Iraqi troops, protecting the Kurds, and countering the influence of Iran.

Barack Obama is only a little better, this Fact Checker post shows. He supposedly will flatly remove "all combat troops" from Iraq if he becomes president. But he also leaves open sending troops "back into the country to fight al Qaeda and 'stop genocidal violence.' " Per The Post:

It is more difficult to find obvious contradictions in Obama's speeches on Iraq than in the statements of his Democratic rivals. The weakest chink in his rhetorical armor is his claim that he will withdraw all combat troops from Iraq "within 16 months" of taking office — but "continue to strike at al Qaeda in Iraq." He has acknowledged that these will be "combat missions."

The Obama campaign has tried to square the circle by insisting that Obama will withdraw all 20 combat brigades presently in Iraq. "A different force will be constituted," said Obama spokesman Bill Burton, in an e-mail. "This would not be a brigade engaged in sustained combat. Rather, it would be a strike force that could take targeted action against specific al Qaeda assets."

In other words, the vaunted Obama "withdrawal" might not truly get U.S. troops out of harm's way after all.

(One of oldstyleliberal's best friends, also a Democrat, has pointed out to him that none of the candidates' television ads run nationally. They're tailored to Iowa or New Hampshire or wherever, or to individual localities therein, the better to tell the potential voters in the various states and communities what they want to hear. Again, it's the exact opposite of exerting steady, uniform leadership to forge a general consensus among U.S. citizens.)

So oldstyleliberal feels he is up the creek without a paddle when it comes to figuring out who to vote for.

oldstyleliberal realizes that there is one true "peace candidate" in the Democratic field, Dennis Kucinich, but he's a guy who claims to have seen a UFO. Thank you very much, but, no. Few if any of the other major Democratic or Republican aspirants, meanwhile, have a clear, firm commitment to getting out of Iraq.

oldstyleliberal does feel strangely attracted, oddly enough, to the candidacy of Republican Ron Paul, known mainly as a libertarian, whose political positions are summarized here. Paul opposes the Iraq war without ifs, ands, or buts, at least as far as oldstyleliberal can tell. Yet it is hard for oldstyleliberal to admit, even to himself, that he is in sympathy with those libertarian ideological principles of Paul's that don't exactly qualify the man as a liberal.

For example, Paul wants "secure borders and legal immigration," which sounds to oldstyleliberal like code talk for something which goes against true libertarian sentiments. Libertarians want a small governmental footprint, but apparently in Paul's mind that hands-off posture stops at the border with Mexico. Mexicans and others who sneak into this country illegally in search of a better way of life aren't to be considered as free to pursue happiness as anyone who is here legally.

Now, it may well be that the U.S.-Mexico border can and should be secured. (If it can't be secured, it doesn't matter whether it should be secured.) But oldstyleliberal has somehow gotten the idea that the best way to keep Mexicans at home in Mexico would be to stop subsidizing U.S. farms. The U.S. government keeps the price of, say, American corn low in Mexican marketplaces by making up the difference with a price support or a subsidy to American growers. Mexican corn growers, not getting a similar subsidy, can't compete even in their own home market. Mexican farm workers, either out of work or working for peanuts, migrate north, often illegally, looking for more income.

If our government were as small as Ron Paul, as a libertarian, would like it to be, perhaps the U.S. farm subsidies would vanish, Mexican farms could compete on an equal basis, and Mexican agricultural workers would make enough money to keep them at home with their families, where they'd rather be.

Or, take education. Columnist George F. Will has this op-ed piece in this Sunday's Post. It says, "No Child Left Behind, supposedly an antidote to the 'soft bigotry of low expectations,' has instead spawned lowered standards." NCLB legislation was passed by Congress in 2001 and signed into law on January 8, 2002, by President Bush.

Ostensibly intended to force states and their local school systems to show measurably higher results in the education of America's children, NCLB has, according to Will, done just the opposite:

NCLB requires states to identify, by criteria they devise, "persistently dangerous schools." But what state wants that embarrassment? The Post recently reported that last year, of America's approximately 94,000 public schools, the "persistently dangerous" numbered 46. There were none among the 9,000 schools in amazingly tranquil California.


NCLB's crucial provisions concern testing to measure yearly progress toward the goal of "universal proficiency" in math and reading by 2014. This goal is America's version of Soviet grain quotas, solemnly avowed but not seriously constraining. Most states retain the low standards they had before; some have defined proficiency down.

Per Will, a report called "The Proficiency Illusion" from the Thomas B. Fordham Institute, which studies education reform, claims:

The rationale for standards-based reform was that expectations would become more rigorous and uniform, but states' proficiency tests vary "wildly" in difficulty, "with 'passing scores' ranging from the 6th percentile to the 77th." Indeed, "half of the reported improvement in reading, and 70 percent of the reported improvement in mathematics, appear idiosyncratic to the state test." In some states, tests have become more demanding; but in twice as many states, the tests in at least two grades have become easier.

Again, it looks to oldstyleliberal as if a government program, however well-motivated, has failed to make things better and in some ways made things worse. The states get more money from Uncle Sam if schools and pupils pass standardized tests, so guess what? It's truly amazing how few schools and pupils flunk the state-devised tests. 6th percentile, indeed!

oldstyleliberal has never heard George Will say he is a libertarian, but he proudly owns to being an old-style conservative, which is nearly the same thing. Will regularly lambastes President Bush and his crowd for not being real conservatives who stick like glue to the U.S. Constitution's limits on their powers of office. They prosecute foreign military interventions without getting Congress to declare war. They usurp civil liberties and privacy rights. They run up huge deficits, albeit with congressional approval — Will is just as scathing about Congress's abdication of its own constitutional responsibilities.

Now that Congress is led by oldstyleliberal's own party, the Democrats, he ought to be pleased ... but he's not. The front page headline in today's Post, "Hill Briefed on Waterboarding in 2002," leads off an article revealing that Nancy Pelosi, now Speaker of the House, was among the four or eight Democratic and Republican members of Congress briefed in 2002 and 2003 about the means then being used to coerce detainees in the war against terrorism to talk, including the simulated drowning technique known as waterboarding. Pelosi and the others, almost without exception, let out not a peep of protest — even though some of the Democrats who were in on the briefing today roundly excoriate the Bush administration for having sanctioned such tactics of torture. More hypocrisy.

So oldstyleliberal is interested in supporting a candidate who will be absolutely straight with the American people without adding pages and pages of fine print to every pledge. He is interested in supporting a candidate who will say the same things to all the people all the time. He is interested in a candidate who does not substitute firmness of tone and pugnacity of mien for true leadership. He is interested in a candidate who will exert that leadership to bring us together, rather than merely finessing our differences with rhetoric that doesn't really mean what it appears to mean. And oldstyleliberal now believes that the only way a candidate can stop being a mush-mouth today is to stop promising us the world and instead promise to shrink the government's much-too-huge footprint.