GOP Representatives oppose public option because it's "cheaper", "saves money"

[Torie]

http://minnesotaindependent.com/39874/bachmann-kline-oppose-public-option-because-its-cheaper

Michelle "Crazy Bitch" Bachmann:

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John Kline:

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Once again, if you missed it, in crazy Republican world, cheaper services that save money are bad things that must be defeated.

The point is the concern that the public option will be subsidized (as it surely will be, if not right now, in due course), and obviously non-subsidized alternatives have an anchor holding them down, and are sailing into a stiff wind head on. The concern is that this is a Trojan Horse, leading to solely over time for most folks with just a government provider.  I see no reason why we just can't have means tested premium subsidies, with some rules about minimum coverages. I don't see the need for a public option, and the push for it, suggests to me well the ulterior motives outlined above.

[Torie]

Badger, competition in theory forces cost control, or you go out of business. We need more competition, and more transparency to facilitate it. I don't see why there are economies of scale when it comes to insurance plans so massive that it requires 200 million participants to reach max efficiency. And why does anyone think what the government runs would be efficient anyway, particularly given the political pressures, not to mention well, public employee unions?  No, what this is about is muscling out over time private alternatives, and squeezing vendors with monopsony buying power, so it will not be profitable for anymore hospitals to be built absent government subsidies, or private company drug research, as the existing capital base of those entities is cannibalized. And then 20 years from now, folks scream, hey the market does not work because no hospitals are being built, we cannot attract new doctors to the profession, and no drug research is being done anymore, and thus the government needs to run all that too, all of course with public funds.

There is no free lunch, and the notion that the government can effect massive cost savings to deliver health care is ludicrous, just ludicrous. Having said that, the health care system is in general hideously inefficient, in part due to government regulation and lack of transparency. Heck, next to nothing when it comes to medical records is computerized, leading to mistakes and ignorance. That is why I have all my medical records in hand, all of them, so I can tell medical providers basically what is wrong with me, and what I expect, and what my delta function has been. If I did not do that, my care would be less efficacious then it is.

Anyway, government has a cost of capital too, and what profits are about, is compensating capital. And that cost includes risk, which is hidden from government, because that risk is absorbed when things go wrong, with well higher costs and taxes and deficits, and inflation, and you name it. It is far higher than the interest rate on T bills and bonds.

[Torie]

If the plan costs less because the costs are borne by the taxpayer instead of the insured, its a problem.  If the public plan is subsidized, private plans should benefit from the same or equivalent subsidies unless the objective is for the public plan to be a stealth effort at implementing single payer.

There's a very good reason it costs less, and that's because, among other things, the public plan wouldn't gouge rates or spend a huge portion of the money on administrative costs, designed to push people off the rolls. Also, the government is able to get drugs at a much cheaper price.

If the government is going to dictate drug prices for its public plan, why not simply impose price controls on all drugs?  That way the savings would be available no matter who is paying for it, whether it be a public plan, a private plan, or the uninsured.

Basically, it's cheaper because there's not as much of a profit motive corrupting the business.

So the profit motive is the problem?  So then why aren't the existing not-for-profit organizations that offer health insurance able to outcompete the for-profit companies that offer health insurance by offering more affordable insurance?

You're assuming in your statement that the private market is just fine with costs and the government shouldn't go below those costs because it would hurt private businesses. This is lunacy. Not only does it focus on money and not, you know, lives to save, but it shows a rather large disconnect as to why we have the problems we have.

Ignoring money may be fine in fantasy land, but in the real world someone must pay or the service won't be provided. If you favor single-payer as the way to do it, that certainly is one way to do it, but trying to sneak it in is certain to provoke a political backlash.

Keep your "indy" cred up though.

I certainly do try, but I worry more about my "realism" cred, something Democrats and Republicans both ignore all too often.

Understating the costs of health care reform will end up biting Obama in the ass politically, just as understating the costs of the War in Iraq bit Bush's hiney.  It will be more difficult for the Democrats to get what they want passed if they don't resort to accounting gimmicks, like those Bush used to pass his tax cuts, but it means that the programs are far likelier to continue once he's out of office as well.

As I've said before, I feel the best solution to the health care crisis is a double mandate with people required to have health insurance, and health insurers required to accept everyone with no price discrimination based on pre-existing conditions.  Ideally, subsidies in such a scheme would be handed out to the insurees, not the insurers, be they public or private.

I agree except those with pre-existing conditions should pay more in premiums, if dumb enough not to have insurance, or poor enough, with the higher premiums also subsidized on a means tested basis. Do you really want the taxpayers subsidizing my premiums because I have rather expensive pre-existing conditions? I think not.

[Torie]

Well sure Badger, if a public system were more efficient, and was not over time cannibalizing existing assets in the sense that it was not taking the economic incentives out of private drug company research, construction of new health care facilities, and folks of talent going into the health care industry over time down the road, then yes, that is great.  But that is your assumption, and you have offered no concrete evidence of which I am aware that an effective government monopoly running all of this would be more efficient than a private system with means tested subsidies. There is this assumption that somehow profits equals economic waste, which no economist of whom I am aware would agree. What does the government run efficiently vis a vis private industry that is relatively complex?  What the government is efficient at is redistributing cash, which is why social security is efficiently run - it is mostly about negotiating and issuing checks.

[Torie]

As I've said before, I feel the best solution to the health care crisis is a double mandate with people required to have health insurance, and health insurers required to accept everyone with no price discrimination based on pre-existing conditions.  Ideally, subsidies in such a scheme would be handed out to the insurees, not the insurers, be they public or private.

I agree except those with pre-existing conditions should pay more in premiums, if dumb enough not to have insurance, or poor enough, with the higher premiums also subsidized on a means tested basis. Do you really want the taxpayers subsidizing my premiums because I have rather expensive pre-existing conditions? I think not.

Torie, there is no way to have universal coverage with private insurers if persons are penalized for having preexisting conditions.  If you feel that lack of coverage isn't a concern, then you likely feel that there is no health care crisis that government should be addressing.

No, insurance is mandatory under my scheme, and if folks who are sickies already can't afford the premiums, they will be subsidized for the premium cost on a means tested basis. Everyone will be covered, and must be covered - period. The idea that I could pass my pre-existing conditions cost on to the taxpayers is simply outrageous. It sucks! 

[Torie]

They would be paying high premiums with their existing insurer, and would continue to pay high premiums if they switched companies, but there would be no penalty for switching. If they have cheap insurance now, because the condition occurred while insured, then switching without a pre-existing filter, would load the cost onto the new insurer, and be a windfall for the previous one, as the previous insurer sluffs off a "loser." Maybe the old insurer should cut a check to the new one or something to erase that transfer payment come to think of it, and facilitate competition among the already insured "sickies."

If the sickies can't afford it, they would be subsidized. It is a one time cost in the sense, that over time it would all fade away, but that "one time" cost goes on year after year, until one becomes a "medicare."  I don't see why I should be subsidized until I hit 65, and I would be even though I do have insurance. With no pre-existing filter, I could get cheaper insurance.

Good comment though Muon2, but then that is almost invariably the case with you, you insightful devil you!

[Torie]

Suppose C is at Harvard Law School, and is destined to make millions?  Should the taxpayers subsidize this soon to be "rich," for 40 years because the guy was too arrogant or feckless to get health insurance for relative pennies? 

I guess that is the best I can do. Extreme cases sometimes make for bad policy. Still if one can afford it, and made a financial mistake, I just don't see why the taxpayers should bail that person out. In any event, where do you draw the line between the feckless 25 year old, and the 58 year old Torie? When does one who can afford it become totally financially responsible for one's financial decisions, who has the dough to pay for the mistake?

[Torie]

What I am worried about is the fact that simply subsidizing insurance would give the wrong market signals to an industry that isn't that accountable to market forces at it is. Trying to subsidize our mistakes will simply cause too much inflation for my liking...either that or higher taxes.

Universal health care would subsidize every mistake anyone has made, no matter their balance sheet or income statement.  Is that just?

[Torie]

Suppose C is at Harvard Law School, and is destined to make millions?  Should the taxpayers subsidize this soon to be "rich," for 40 years because the guy was too arrogant or feckless to get health insurance for relative pennies? 

I guess that is the best I can do. Extreme cases sometimes make for bad policy. Still if one can afford it, and made a financial mistake, I just don't see why the taxpayers should bail that person out. In any event, where do you draw the line between the feckless 25 year old, and the 58 year old Torie? When does one who can afford it become totally financially responsible for one's financial decisions, who has the dough to pay for the mistake?

To the extent public health care is supported by progressive taxation with the Harvard Law grad in this scenario gets out of school he'll be earning big bucks, and paying a portion of those big bucks back in income taxes which in his case will not only pay back the cost of his insurance in spades but also cover the cost of others less well off who use the system as well. The long term economic benefits of keeping this guy alive and healthy to become a productive memeber of society are enormous and obvious.

I take your point, but I suspect the Harvard lawyer will keep himself healthy - subsidized or not.   And yes, I suppose one can say that what subsidies the rich that goes in one pocket, at once via higher taxes (if there are higher taxes, and the Dems just decided that that is only for those earning over 1 million per year, which exempts among others yours truly - hooray!) goes out the other pocket, in a game of mu$ical chairs.