Politics and Politicians

There has been a lot of angst and anger amongst liberals and progressives following the defeat of Susan Crowley in the Massachusetts Senate race. It seems that the Health Care bill is now on its death bed. But that is not the topic today.

First, we start with Tyler Cowen, “A Simple Theory of Political Jobs“:

Political jobs would be torture for most people.  You have no freedom.  You are underpaid and over-bugged.  You lose a lot of your privacy.  You have to stop writing emails or saying what you think.  You don’t get to read many good books or go for many quiet walks.  It’s hard to be a non-conformist.  And so on.

Yet it’s really hard to get top political jobs.  So who gets them?  People who truly, deeply love the power.

Plus “doing what the voters want” very often feels like, or can be described as, “doing the right thing.”

I have a keen interest in politics and the idea that government, done well, can truly help. But I will never be a politician because of the environment described above. He didn’t even mention the bureaucratic junk you have to deal with every day.

I think regardless of how you slice it, you have politicians who care primarily about getting power, then staying in power. And herein lies the problem. Things like Health Care and Climate Change, in particular, are things that need to be addressed, but require short term pain in order to get the long term benefit. The Health Care bill the Dems tried to pass we a massive giveaway that was pretty transparent to all. Most liberal/progressives supported it on the grounds that the uninsured need help no matter what, conservatives and libertarians opposed it on the grounds (primarily) that it was vastly unaffordable in even the medium term. To pass health care reform, it will be necessary to reduce the amount and type of care we all get. The question is who will do it an how? The current bill doesn’t do that – or rather it claims to, but anyone looking at the recent past knows that the “medicare reform” was never going to happen because as soon as the AMA opposes it, congress backs down like they do every year with the medicare reimbursement reduction that they suspend annually. And “evidence-based medicine” was never going to fly either as we saw with the very simple case of mammograms. The fact is, Congress is not willing to stand in between a patient and their doctor.

We see a similar pattern in Climate Change. Until I hear a majority of congressmen saying “This bill will raise the price of energy – that is the whole point” I won’t really be paying all that much attention. There are lots of shenanigans about cap-and-trade, and “frameworks” for progress, etc. but right now, the vast majority of Americans are not willing to pay more for gasoline (for their cars or indirectly in the price of virtually everything we buy that is shipped via truck) to avert climate change. Until they are, this one isn’t going anywhere. The infrastructure for burning fossil fuels gives them such a huge head start on alternative energy that all the subsidies in the world are not going to help in the short to medium term. And so, I predict nothing will happen in the US for a while on climate change. Things will have to get a lot worse before that happens.

And you know what? This is, on the whole, good. I think the Democrats vastly overestimated their “mandate” when Obama was elected because there is no such thing as Blue/Red and all that stuff is really overblown. Many moderate locations (Congressional Districts and States) very slightly crossed from R to D in 2008 and the Dems threw a party. Well, the new folks weren’t that different from the old folks, they just had (D) after their name. They still represent the same set of people. And I think on Health Care, the majority of Americans are not willing to pay a ton of money for an incremental extending of care to uninsured – it was not the reform they wanted. And now congress responds.

What to do about health care? I like this from Megan McArdle:

Raise the Medicare tax by half a percentage point, and eliminate the tax-deductibiity of health insurance benefits for people making more than $150K a year in household income, $100K for singles.  Then make the federal government the insurer of last resort.  Any medical expenses more than 15% or 20% of household income, get picked up by Uncle Sam.

It is incremental change in the right direction, while reducing the life-dislocating problems of massive health care bills. Because it the federal insurance is a % of income and health care costs are not related to income (directly) it will disproportionately help low income folks who find themselves very ill. But the threshold is high enough that it won’t be too attractive to people to skip insurance altogether.

And so it goes…

setting the stage for Obama’s talk next week

So, what will the next phase of the Health Care debate look like? Megan McArdle breaks it down:

At this point, all the remaining items on the table:  mandate, guaranteed issue, community rating, subsidies–are pretty much a package deal.  If you take out the mandate, guaranteed issue and community rating will make insurance very expensive, driving all but the very sick, and relatively affluent, out of the market.  If you take out guaranteed issue, the mandate is nonsensical.  Take out community rating, and you lose the main point, which is to have young healthy people pool their premiums with those of the old and sick.  And if you lose the subsidies, you will be in effect commanding people to buy something they can’t afford.

We’ve not discussed the current legislation on the table, so I’ll break down some of the terms:

Mandate: pretty obvious, the requirement that everyone purchase health insurance. This is to get the young healthy to participate to help subsidize the older and sicker.

Community Rating: This is what makes insurance companies treat everyone the same, i.e. can’t charge different premiums to people who are sick.

Guaranteed Issue: This means that if a person wants to purchase insurance, the insurance company has to sell to them.

Subsidies: This means the government will give money to lower/middle class folks who can’t afford the cost of health insurance.

I’m also quite interested to see what Obama has to say next week. The joint session of Congress is pretty rare (GWB and WJC only used it twice each in 8 years) and so everyone will be watching.

Al Franken at the State Fair

I post this video not so much for the content of the arguments, as to demonstrate the fact that reasonable people can disagree respectfully and engage this issue. I found this clip to be a welcome antidote to the continuing reports of town hall craziness. I should note that I’m not crazy about the title of the video; “angry mob” does not fairly characterize these folks.

FriscoCare?

From this NY Times op-ed:

The early results are in. Today, almost all residents in the city have affordable access to a comprehensive health care delivery system through the Healthy San Francisco program. Covered services include the use of a so-called “medical home” that coordinates care at approved clinics and hospitals within San Francisco, with both public and private facilities. Although not formally insurance, the program is tantamount to a public option of comprehensive health insurance, with the caveat that services are covered only in the city of San Francisco. Enrollees with incomes under 300 percent of the federal poverty level have heavily subsidized access, and those with higher incomes may buy into the public program at rates substantially lower than what they would pay for an individual policy in the private-insurance market.

To pay for this, San Francisco put into effect an employer-health-spending requirement, akin to the “pay or play” employer insurance mandates being considered in Congress. Businesses with 100 or more employees must spend $1.85 an hour toward health care for each employee. Businesses with 20 to 99 employees pay $1.23 an hour, and businesses with 19 or fewer employees are exempt. These are much higher spending levels than mandated in Massachusetts, and more stringent than any of the plans currently under consideration in Congress. Businesses can meet the requirement by paying for private insurance, by paying into medical-reimbursement accounts or by paying into the city’s Healthy San Francisco public option.

There has been great demand for this plan. Thus far, around 45,000 adults have enrolled, compared to an estimated 60,000 who were previously uninsured. Among covered businesses, roughly 20 percent have chosen to use the city’s public option for at least some of their employees. But interestingly, in a recent survey of the city’s businesses, very few (less than 5 percent) of the employers who chose the public option are thinking about dropping existing (private market) insurance coverage. The public option has been used largely to cover previously uninsured workers and to supplement private-coverage options.

RomneyCare?

From this CNN article:

“Seven in 10 people in the state support the program, and no more than one in 10 would repeal it.” said Robert Blendon with the Harvard University School of Public Health.

Unlike Democratic proposals that would give Americans the choice of joining a government-run health care plan, Massachusetts has no public option. Instead, people in the state are required to buy private insurance, and the poor get subsidies.

…

And under the 2006 legislation, there are several requirements for insurance companies.

According to Brian Rosman of Health Care for All, a nonprofit based in Massachusetts, the requirements include:

Minimum benefits, such as preventive care, mental health care and hospitalization

A ban on gender discrimination

Limits on total out-of-pocket costs

A prohibition on pre-existing conditions as a qualifier for health coverage

No medical underwriting, so insurers can’t ask an individual about his or her health status in order to determine coverage

Limits on age restrictions, which means what is charged for an older individual cannot be more than double what is charged the youngest.

Analysts say “Romney care” is basically “Obama care” minus the public option.

The Uninsured

First, I want to state that I agree wholeheartedly that our health care system is not functioning very well and not likely sustainable. I creates major inefficiencies in employment mobility, very high levels of anxiety about coverage of major events, and potentially disastrous outcomes for those who find themselves in need but without coverage. I also recognize that “Health Coverage” is not the same as “Health Care” and as such many of those “covered” have crappy care.

But I do want to make sure the facts are known. Most of us have heard “46 million uninsured” so let’s find out who those people are:

• 6.4 million are enrolled in Medicaid or S-CHIP and just gave the Census taker the wrong answer.  I’m serious.  This is called the Medicaid undercount.
• Another 4.3 million are eligible for Medicaid or S-CHIP and have not enrolled.  If they need care, the hospital or clinic generally enrolls them.  They are protected against risk even though they don’t show up on the rolls as insured.
• Another 9.3 million are non-citizens.  Different people come to different conclusions
  about what portion of this group should receive taxpayer-subsidized health insurance.
• Another 10.1 million have income more than three times the poverty line.  Leaving about 15.6 million remaining uninsured, of whom about 5 million are childless
  adults.

Source. Original data from the Bureau of Labor Statistics (BLS) and the Census Bureau. I have some more data elsewhere of studies looking at the Chronically Uninsured – those who do not have health care for a year, thus removing a lot of the transient folks between jobs who do not have health coverage for a month or so.