February 27, 2008

The Democratic Debate and Health Care

Filed under: Politics — Bob Gifford @ 8:26 pm

The first 16 minutes of last night’s Democratic debate between Hillary Clinton and Barack Obama were spent debating their respective health care plans, and specifically the merits of Clinton’s mandate vs. Obama’s lack of same. It was time well spent, but it didn’t do much to clarify the trade-offs involved.

Both Clinton and Obama ultimately want universal care, but both realize that a single-payer plan along the lines of those in virtually every developed country in the world except the US is politically impossible. So they both have developed plans that fall short, but each have made different choices on how to compromise the goal of true universal care. Clinton is able to claim that her plan provides universal health care, but it achieves it with an individual mandate, i.e. requiring everyone to purchase health care under the force of law. Obama’s plan has a mandate for children, but doesn’t have a mandate for adults.

So which is better? That is the wrong question — the question should be which is less bad, since it really is a choice between the problems caused by one plan vs. the problems caused by the other A mandate, whether for everyone or just children, has to be enforced. So what do we do with an adult who would rather gamble they won’t get sick and save the money they would otherwise spend on insurance? It’s the same issue the IRS faces — how to collect taxes from a tax evader. The IRS seizes assets and garnishes wages, and some government agency would have to do the same to enforce a health insurance mandate.

So a mandate is bad, right? Not so fast. Obama’s plan doesn’t have to enforce a mandate, but what about that person that gambles they won’t get sick, but does? And what if they get really sick, requiring care far beyond their ability to pay? As a humane society, we’ll give them care, but we can’t create an incentive for people to opt out of health insurance by telling them that it will be there anyway if they need it. Obama’s solution is to make them pay for the health insurance that they didn’t buy. What if they can’t afford it? Seize assets and garnish wages.

Either way, it’s the same issue. The difference is a choice between enforcement before someone gets sick, or after. Obama will let some adults gamble they won’t get sick, and win, all to avoid having to force them to buy insurance they don’t want. Clinton makes the opposite choice. Insurance could be more expensive under Obama’s plan, since some healthy people will opt out of the risk pool, but then his plan will avoid the cost of enforcement. Both plans are problematic, but in different ways.

(I should mention that both plans subsidize insurance for the poor, and ensure that no one can be denied coverage due to pre-existing conditions, both vitally important elements of the plans.)

The root cause of these flaws in the respective plans is that they fall short of a single-payer plan. As a society, we aren’t willing to let people die in the streets as they do in undeveloped countries, and a good thing too. But we are (unnecessarily) squeamish about single-payer “socialized medicine”. So we fall between two stools, avoiding the inhumanity of one without gaining the benefits of the other.

Anything between those extreme models of death-in-the-streets and single-payer health care requires decisions about how to pool and price risk and the administrative systems to track who pays for what care. This ends up being inefficient, cruel, or both. As an ardent capitalist, I prefer private free-market solutions, but as a believer in universal high-quality health care at the least cost, I’ve come around to believing in the necessity of a single-payer system. I think both Clinton and Obama do too. It’s just a shame the electorate doesn’t.

1 Comment

  1. Check out this Barack/Hilary parody video–just a little political humor to lighten things up. 🙂

    Comment by bumblebeela08 — May 23, 2008 @ 3:39 pm

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