Obama's Health Care Plan versus Hillary's

posted by Damozel | Discussing Obama's awful new health care ad, Ezra Klein identifies some of the holes in this tissue of political legerdemain.  I'll get to the ad presently.   

If Obama supporters want to know why I'm sticking to Hillary, they need look no further than his health care plan.  It's not the only reason I haven't jumped on the Obama bandwagon, but it's certainly a major factor. In the meantime, I'm grateful to Klein for pointing out the questionable logic underlying Obama's position.   Klein helpfully points out to the Hillary campaign---HELLO???---how they could make their case against more effectively.  For starters, "the argument [Obama is] making is applicable to any kind of universal health care arrangement, including the arrangements Obama himself will eventually have to adopt."  But there's more.

Hillary Clinton is basically arguing against Barack Obama's mandate from the wrong direction. The problem isn't that it leaves people out, but that it effectively closes off his ability to regulate the insurance industry, and opens up a flaw that could bring down his whole proposal....

[H]ere's how Clinton should have explained the problem in Obama's plan: A central tenet of his proposal is that " No insurance companies will be allowed to discriminate because of a previous bout with cancer or some other pre-existing illness." You literally cannot have that rule without some mechanism forcing everyone to buy in, as the healthy will stay out.

So one of two things will happen during the legislative process: Either a mandate will be added, or the prohibition against preexisting will be dropped, or limited to Obama's National Health Insurance Exchange. What will happen in that case is that the Exchange will largely become the domain of the public insurer, which will be a catch-all for the ill and unhealthy. Meanwhile, most insurers will operate outside the Exchange -- you don't have to buy insurance within the Exchange, it's just an option -- and use the existence of the Exchange to enhance their ability to skim the healthy and young and fob off the sick and old.

A mandate is not how you cover everyone, it's how you force insurers to cover everyone, and discriminate against no one. And even if you don't have a mandate in your plan, to argue against universal mechanisms because they force people to buy insurance is supremely damaging to the long-term goal, which Obama professes support for, of some system in which everyone is, and has to be, covered.

Obama is, of course, right that affordability is an issue, and needs to be in place before a mandate. But what a mandate does is, additionally, force you to think about affordability. The Clinton campaign does that, with a plan that limits total expenditures to a percentage of income. Not a dollar amount, a percentage. If you make very little, your total expenditure, by law, can't be very much.

Obama's plan has a more traditional subsidy mechanism that simply goes on a sliding scale by income, and given how much money goes towards his reinsurance plan, he's actually got less in there for subsidies than Clinton. So while he's warning that she'll make you pay even if you can't afford it, she's actually got the right affordability mechanisms in there -- she keeps it to a small percentage of income. By pretending her plan lacks those and is just a mandate, he's misrepresenting its fundamental premise, in much the way the Clinton campaign misrepresented his arguments on Social Security taxes.

In the end, his plan is not universal, does not attempt to be, and is probably less generous in its affordability provisions than Clinton's. And even so, I wouldn't really care, as it's still a pretty good plan, except that he's decided to respond to the inadequacies of his own policy by fear-mongering against not only better policy, but the type of policy he's probably going to have to eventually adopt. It's very, very short-sighted.  (Ezra Klein)

Exactly.  It's a good plan, but not as good as Hillary's.  Furthermore, his criticisms of Hillary show that either he and his advisers either don't understand her plan---i.e., haven't done an effective analysis---or are being deliberately disingenuous.  Either possibility is unappealing.

Memeorandum

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Comments

[Scottar]

What is one to expect? It's amazing that here in the US we pay half of what the Europeans pay for their gas. We've put so many restrictions on refineries and drilling that, with the importing of 60% of gas and oil, it's a wonder we aren't paying 5 bucks a gallon today.

People forget that drilling for oil is a risk venture that requires substantial capital investment. The other thing they forget is that it's a worldwide commodity, subject to the laws of supply and demand.

Another reason for the price increase is the new smog ethanol additive to replace MTBE, I have read where there is still a shortage of it against demand. So why the big rush to E85 Polosi?

Windfall profits are like another form of price controls which has always resulted in shortages. Just ask the people of Venezuela who because of farm price controls are now suffering from food shortages.

Governement doesn't control wealth but, next to idiots, it sure can derail it!

[JoeCitizen]

Sorry, but I dont follow the logic.
Maybe I am a bit slow...

Could you explain briefly why it is that you need mandates to implement a no-preexisting conditions clause?

"You literally cannot have that rule without some mechanism forcing everyone to buy in, as the healthy will stay out."

This is just stated as obvious, then we go on to consider the consequences. But why does it follow? Why cant you have a rule that forbids exclusions for preexisting conditions. Period. What difference does it make if people are forced to buy in or not?
Once you do decide to buy in, the company has to accept you.

[damozel]

Maybe you ARE a bit slow, at that. Why not look it up for yourself? It will be educational for you to track down the criticisms of the plan by economist and progressive Paul Krugman, Ezra Klein, and many, many others. I am done answering passive-aggressive Obama supporters and defending my positions to them.

You clearly aren't asking me this because you have an open mind and want me to explain to you why Obama's health care plan is fatally flawed. You want to pick a fight and I am not interested in fighting.

[Erinn]

Well, I don't understand either.
You actually strenthened Obama's plan. I think choice is always better - in any situation. Why would you need to force someone to participate in their own well-being? And can you really FORCE people to use physicans and dentists? You'll just be forcing an insurance company to get paid for a service that the uninterested wouldn't even use.
I think HIll's plan would dilute the quality of services and create an environemtn that will function like medicaid - and treat ALL people like the receiptients of government subsidized health care they would be.

[Damozel]

Well, Erin, you say "government subsidized health plan" like it's a bad thing. My husband's relative in England would either be dead now or have bankrupted his family if not for exactly that thing. As it is, his kidney tumor was removed, he has survived, and he has been hospitalized for three months and he doesn't owe a thing. You may live to find that the 'choice' isn't a real one. If your child or spouse is dying, you WILL sell your house and your car and your life to save them, but what then? When my late husband (obviously not this one) was hospitalized after the aneurysm that killed him, the bill after insurance was over $20,000. Your arguments are only good for people who haven't had that happen to them....YET. Even Obama supporters are distressed over his health care plan.

[ab]

Good healthcare starts with no smoke(ing) in the white house.

[gfunk]

want another one-off scenario? how bout my mom would've died under hillary's plan because it would've taken about a year to get an MRI, which would've been too late. and if the healthcare in england is so great, then why did gwyneth and madonna come to america to have babies? i'll answer - madonna told gwyneth the hospitals in the UK were HORRIBLE. that's what hillary wants.

[hydroxycut online]

this health plan is quite consolidated think it's a great project and a great challenge that can bring greater stability