Tag Archives: Voodoo Health Policy

Taking From The Poor & Giving To The Rich

Published / by stevec

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Trump will sign any healthcare legislation that the Republicans send him. He has no empathy. He does not care.

The republicans likewise have no empathy. They do not care. They are in the pockets of the insurance industry and wealthy. Their healthcare bill is a terrible piece of legislation.

  • It will discriminate against the poor, elderly and sick.
  • I will facilitate a tax break for the wealthy.
  • It will allow insurance to cherry-pick based on pre-exisiting conditions.

Consider this: The administrative costs of government-run Medicare is about 1%. In contrast insurance takes 10 to 20 percent off the top for the task of distributing money to healthcare providers.

This 10 to 20 percent cost is huge given that healthcare is between 1/6th and 1/5th of the national economy (between at least 3 trillion and 3.6 trillion of our 18 trillion dollar economy). By going to a single payer system, and getting the insurance industry out of the money-transfer business, the system would save at least something like $300  to $400 billion annually in pure administrative costs.

$300 to $400 billion looks like a pretty good improvement over the current insurance based system! And it does not include other health policy efficiency improvements like allowing negotiation with big pharmacy for better deals on prescriptions.

Paul Ryan’s Healthcare Bill

Published / by stevec

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I just listened to Paul Ryan’s Power Point presentation on health care. Lots of words, not much content. The content that is there is scary. He claims their replacement for the ACA will:

  • lower costs
  • give consumers more choices
  • give patients more control
  • provide universal access

It may provide universal access in principal but only if you can afford the costs. It will be great for the wealthy but not for the rest of us. For the wealthy it will lower their costs (reduced taxes) and they already have choices and control. But what about the rest of us?

One of his graphics provides a fundamental health insurance principle – Those who are sick are subsidized by the lucky healthy folks.

If you buy the premise that we all have a right to healthcare then it is either done through insurance or a single payer. If the government pays the bill we all pay into the system through our taxes. If through insurance those who are sick must be subsidized by the healthy or the sick cannot afford insurance – the risk of getting sick is handled by spreading the risk. The Republican plan is neither of these.

The Republican approach appears to be doing three things:

  1. Separating out the sick and giving them refundable tax credits to buy insurance. This would certainty make it cheaper for everyone else, but more expensive for the sick, especially if the tax credits are not sufficient to cover their healthcare costs.
  2. Financing healthcare through health saving accounts. This to me is privatizing a system so that individuals are left to their own devices to save for future healthcare costs. This sounds like an abrogation of the principle that all have a right to healthcare. It provides healthcare but only up to a point. If you happen to be unlucky and get a disease that exceed the limits of your health savings you are out of luck – in our rich country it is up to you to deal with healthcare, no public good here.
  3. The other thing that the Republicans are attempting is to drastically reduce Medicaid. This would eliminate healthcare for a large group of poor people.

When I listen to Ryan and think about what he is proposing, it is pretty clear that the only people who would benefit are those who are wealthy (lower taxes) and congressmen who already have gold-plated healthcare.

Universal Healthcare Fundamentals

Published / by stevec

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Krugman has written another piece on the logic of universal healthcare. A must read. Key points below:

…The logic of Obamacare — the reason anything aiming to cover a large fraction of the previously uninsured must either be single-payer or something very like the ACA — is the clearest thing I’ve seen in decades of policy discussion.

…providing health care to those previously denied it is, necessarily, a matter of redistributing from the lucky to the unlucky. …You can’t make this reality go away.

…a market economy won’t care for the sick unless they can pay for it; insurance can help up to a point, but insurance companies have no interest in covering people they suspect will get sick. So unfettered markets mean that health care goes only to those who are wealthy and/or healthy enough that they won’t need it often, and hence can get insurance.

…guaranteeing health care comes with a cost. You can tell insurance companies that they can’t discriminate based on medical history, but that means higher premiums for the healthy — and you also create an incentive to stay uninsured until or unless you get sick, which pushes premiums even higher. So you have to regulate individuals as well as insurers, requiring that everyone sign up — the mandate, And since some people won’t be able to obey such a mandate, you need subsidies, which must be paid for out of taxes.

—[the Republicans are left with] a health economics version of voodoo: they’ll invoke the magic of the market to somehow provide insurance so cheap that everyone will be able to afford it whatever their income and medical status. This is obvious nonsense; I think even Paul Ryan knows that he’s lying like a rug. But it’s all they’ve got.