Monday, August 12, 2013

Some Thoughts on Obamacare

     Why do we need health care plans in the first place?  My answer is that it is a question of risk mitigation.  On the average, we are going to spend a certain amount of money on health care.  But some of us are going to spend much more.  If you are involved in a bad car accident or get cancer, suddenly you need to spend much more money than the average.  I don't think we want to be a society that refuses to give care to children  if they have a life threatening illness.  We don't want to say, "Sorry kid, your parents are deadbeats, so you have to die."   That's what you need health insurance for--to guard against an improbable event that would otherwise be unaffordable.

    Nor do we want to be a nation that cuts off the elderly when they retire.   

      But now let's ask, why do politicians need health care plans?  Well, the main reason is to get re-elected, and for that reason it behooves them to generate some form of gratitude among the electorate.  In this case, politicians want more than the vote of people who survive serious illnesses--they want the vote of the masses.  So for that reason the optimum plan for politicians is one that has a small benefit for the largest possible number of people.  Handing out money to make prescriptions cheaper, or flu shots or other cheap trinkets are examples of what could be helpful to a re-election campaign.

      The goals of the people and the politicians are the opposite.  One needs a major benefit for a few people, and the other needs minor benefits for as many people as possible.  That is the fundamental conflict of interest that voters need to be wary of, imho. 

      In the pre-Obamacare era, our health care plans are meant to help those who do not need them. Private industry seeks to maximize profits, not benefits.  Thus insurance companies will not allow persons with pre-existing conditions to pick up insurance.  Health care is for the healthy.  Those who are unhealthy should kindly go away.   

     Health care plans do not create additional health care, they merely decide how health care will be paid for.  The number of sick people will stay about the same no matter what is decided in Washington. Health care plans probably encourage people to buy medicines that they would otherwise do without, and that sort of thing.  They offer convenience of payment, by having employers and workers pay a monthly fee, which kind of smooths out the month-to-month expenses of medical care.  Right now, hospitals pay billions for uninsured patients and leads to higher overhead expense, which is kind of  a de facto form of coverage. 

     I like the Scandanavian model, in which basics are provided for via tax dollars, but other needs come from the consumer.  So if you have a life threatening illness, tax dollars will pay your expense.  You can also make an appointment with a doctor, but it has to be way in advance. If you want to get in to see the doctor immediately--say for the flu or something--that is going to cost you, and that's where the private insurance kicks in.   That's what we should be doing.  Have the feds provide minimalist health care, basically to keep you from dying, and have private insurance to provide better quality care and broader care.  I think they should be kept out of prescription drugs (for example) unless those drugs are really expensive.  Instead, however, we have a hodgepodge.

    The Democrats, in order to get the support of insurance companies and pharmaceutical providers, loaded up Obamacare with as many goodies as possible, thus creating a very expensive plan that incentivizes extensive use of medical benefits. To make a long story short, they seem to want to provide unlimited health care on demand for everyone--Cadillac coverage that will pay the doctors and insurance companies and the pharmaceutical companies as much money as possible.  While a laudable goal, that is not affordable and leads to shocking increases in what we are paying for medical care.   But the Republicans have not been able to articulate any alternative to Obamacare, other than to say that they don't like it.

     Now that we have a national health care plan (flawed though it is), why can't the Republicans identify, say, the three biggest things that they think is wrong with Obamacare, and introduce legislation to remedy it?  

    The Republicans mainly offer obstuctionist opposition to the entire Obamacare program, but otherwise have very little ability or desire to affect medical care in the US.  In the area of medical care, they are in danger of becoming a party of professional complainers, and as a result they have allowed President Obama to almost completely set the agenda for medical care in our nation.  The train is leaving without the fiscal conservatives.    
 I think that most Republicans are mainly content to protest Obamacare, trying to get sympathy from voters while offering virtually zero legislative amendments or fixes.  That is pathetic. 


  1. Yep.

    Thanks, Don

    1. Thanks for sending the link to the Atlantic magazine article. It's a long one and covers a lot of territory, but the salient point is that health care is not solely for the benefit of sick people, but covers a lot of agendas, and not all of them are positive.

  2. Hi Elliot, I think that you get the problem with politicians right, they do what is best for them and considering that the voters are rationally ignorant they often do things counter to the people's interest. Our Government (at various levels) already spends enough to cover everyone in country with basic no frills but adequate care, but for the maximum benefit of the politicians it covers mostly the groups who vote at higher than average rate (Government employees and retired people).

    Politics makes it impossible buy below is my preferred plan:

    The state would provide insurance to all Americans but the annual deductible would be equal to the family’s trailing year adjusted income minus the poverty line income (say $25,000 for a family of 4) + $300. So a family of 4 with a trailing year adjusted income of $30,000 would have a deductible of $5,300. A family of 4 with a trailing year adjusted income of $80,000 would have a deductible of $55,300. Middle class and rich people could fill the gap with private supplemental insurance but this should be full taxed. This would encourage the middle class and rich, who are generally capable people, to demand prices from medical providers and might force down costs. They could opt to pay for most health-care out of pocket while the poor often less capable would be protected.
    It is not a perfect plan but it might help. Some deregulation of health-care would also help the poor gain access. The gauntlet that Doctors have to run these days to get to practice seems like an anachronism in today’s world. Let smart people get to practice medicine after on the job training. Let the medical businesses decide who is qualified to practice medicine. 12 years of training to tell if my child has an ear infection is overkill and reduces access to health-care for the poor.
    Another benefit of my plan is that it would encourage capable Americans (the rich and middle class) to be a counter weight politically against the providers.

    1. Yes Jim, I think your idea is much better than what we have. Plus you can explain your idea in a few paragraphs rather than thousands of pages of legislation. It makes sense to me though.

      Thanks for stopping by and sharing.