There’s a big debate in the wonkosphere these days about “rate shock,” or whether or not we should believe reports that health insurance premiums under Obamacare are going to be shockingly higher than expected, specifically for individuals buying their own plans.
Ezra Klein says these kinds of reports don’t compare plans accurately, especially for the sicker among us who have had trouble getting insurance in the first place. Josh Barro says, “Dear Young People, Your Insurance Premiums Are Going Up Because Obamacare Is Working As Planned” – Apparently Obamacare was always supposed to involve healthy folks paying more to subsidize the sick.
Peter Suderman has now slammed down the gauntlet pretty much proving that no, that’s not really what the anti-rate-shockers have been talking about at all for the last four-plus years when they were basically promising cheaper, better insurance for everybody.
But now that the cat is coming out of the bag, and we’re just debating about whether it’s been out along and how big it is, I’m starting to wonder…. is this actually starting to look a little socialist after all?
See, like everything else remotely connected to Obama, knee-jerk Republicans have been calling Obamacare “socialism” from the beginning, which has provided no shortage of derision from the left. Silly repubs, it’s not a government takeover of healthcare! It’s government giving millions of new customers to private companies! Besides, the whole individual mandate originated with Republicans in the 90’s and was first implemented by a Republican governor! Nobody calls car insurance “socialism”! It’s just like car insurance, except with a government-enforced mandate to fix the adverse selection problem! You’re already paying for it with uninsured emergency room care anyway, so this will bring down costs for everyone!
Except… now… maybe it won’t? Now the young and healthy were supposed to pay higher premiums all along?
Well, this feels a little different.
It’s not quite like Social Security or Medicare, which are more or less taken from everyone and doled out to everyone at equal (and thus demographically unsustainable) rates. It’s not quite like the income tax, which generally funds what are supposedly public goods. And it’s not quite like car insurance, where you’re protecting yourself against risk but also only paying for your own level of risk.
The closest parallels I can think of are things like Medicaid and food stamps, which are more or less funded by everyone and given to the poor. It’s not pure socialism, just as few industries these days are pure capitalism, but I think it’s a little bit socialist. (Perhaps the fact a good portion of the funds are borrowed makes it less socialist?)
So now we have Obamacare. Are we really agreeing that there will be a portion of my health insurance premium increase that is not related to my own risk of future health bills but is really only there to subsidize health bills for more expensive folks? (Yes, any given healthy person can become very sick, but presumably that risk was already taken into account in their premiums, and we are now likely talking about fairly significant net transfers from chronically healthy people to chronically sick people.) Is this basically a sort of hidden Medicaid tax (or how about “charity tax”) with a private insurance middleman?
I’m not necessarily saying that’s a bad thing. I’m not necessarily saying that’s not something our society might want to do. Obamacare proponents have claimed that the people who seem most concerned about rate shock tend to seem least concerned about the people who never could qualify for insurance in the first place. That may be so, but I think the proponents seem least concerned about the crowding out of charity.
If the government effectively raises my “charity tax” by forcing me to contribute to specific funds for others, then I have fewer funds available for other forms of charitable giving. Now you may think that the government can spend that money better than I can, or that there would otherwise be a shortage of it. I may disagree, though not too forcefully; while I could point to all the abuses and moral hazards and other unintended consequences of, say, food stamps, I also believe they probably genuinely help a lot of people in unfortunate circumstances, and I’m okay with some compromises on those kinds of little bits of socialism (not that I’d mind a lot of reform).
So maybe we do want to redistribute wealth from healthy people to sick people, and maybe we want Obamacare to do it. That’s a discussion we can certainly have. But let’s stop pretending it’s not kinda sorta a little bit of…… socialism.
I’m pretty left leaning socially (not so much fiscally) but I was never more than cautiously optimistic about Obamacare when they were trying to sell it. I didn’t like the idea of being required to pay for health insurance because I see the companies as highly unethical. The problem with health insurance is that health problems are a CERTAINTY. With car insurance, it works to have “good drivers” paying little into the system for liability only, because risk is contained to an event that may not ever happen. Lots of people never have a single car accident. No one goes through life without getting sick, and many need hospitalized at least once. And the bills for THAT dwarf auto costs unless you drive a Bentley or a Ferrari.
In my opinion there’s no sensible action that can reform private health insurance. Too much of everyone’s money has to fund the salaries of the sea of people required to operate the system, especially the money hungry executives. Out of what’s left, they make excuse after excuse to get out of paying for this or that, and they shift the cost back to the customer who doesn’t have the money (which is why they got the damn insurance in the first place.) Sure we could dream up a way to automate a big chunk and cut jobs to bring down costs so lower premiums, but that’s just another glut of jobs lost in a system that already demands everyone have money to survive but doesn’t offer reliable opportunities to earn any (or at least not anywhere near enough of it). It would just generate a new flood of people with no job prospects who can’t comply with the mandate because they’ve got no job and no money to pay in.
Getting sick isn’t a “risk.” It’s a certainty. Therefore traditional insurance ideas can’t, and should NOT be applied.
I really appreciate the logical analysis of the ACA instead of the hysterical propaganda approach of the Republican party–which I think did more harm than good. People like me (maybe left-leaning, but fairly centrist) threw our hats in with the left just because the opposition slogan “repeal and replace” seemed like history repeating: kill any “reform” bill and then table the issue indefinitely. But things didn’t really work as they were. I agree “Obamacare” isn’t working, I regard it as a bad idea at an even worse time. But then again there’s never a good time to double down on a bad hand, is there? Most people weren’t buying insurance because they didn’t have the money. Forcing them to spend it anyway doesn’t solve the problem, in fact it causes more.
I’m pretty left leaning socially (not so much fiscally) but I was never more than cautiously optimistic about Obamacare when they were trying to sell it. I didn’t like the idea of being required to pay for health insurance because I see the companies as highly unethical. The problem with health insurance is that health problems are a CERTAINTY. With car insurance, it works to have “good drivers” paying little into the system for liability only, because risk is contained to an event that may not ever happen. Lots of people never have a single car accident. No one goes through life without getting sick, and many need hospitalized at least once. And the bills for THAT dwarf auto costs unless you drive a Bentley or a Ferrari.
In my opinion there’s no sensible action that can reform private health insurance. Too much of everyone’s money has to fund the salaries of the sea of people required to operate the system, especially the money hungry executives. Out of what’s left, they make excuse after excuse to get out of paying for this or that, and they shift the cost back to the customer who doesn’t have the money (which is why they got the damn insurance in the first place.) Sure we could dream up a way to automate a big chunk and cut jobs to bring down costs so lower premiums, but that’s just another glut of jobs lost in a system that already demands everyone have money to survive but doesn’t offer reliable opportunities to earn any (or at least not anywhere near enough of it). It would just generate a new flood of people with no job prospects who can’t comply with the mandate because they’ve got no job and no money to pay in.
Getting sick isn’t a “risk.” It’s a certainty. Therefore traditional insurance ideas can’t, and should NOT be applied.
I really appreciate the logical analysis of the ACA instead of the hysterical propaganda approach of the Republican party–which I think did more harm than good. People like me (maybe left-leaning, but fairly centrist) threw our hats in with the left just because the opposition slogan “repeal and replace” seemed like history repeating: kill any “reform” bill and then table the issue indefinitely. But things didn’t really work as they were. I agree “Obamacare” isn’t working, I regard it as a bad idea at an even worse time. But then again there’s never a good time to double down on a bad hand, is there? Most people weren’t buying insurance because they didn’t have the money. Forcing them to spend it anyway doesn’t solve the problem, in fact it causes more.