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.