GIMME A STEAK...AND GIVE THAT MAN THE BILL

9/17/09

Yesterday, Senator Max Baucus (D., Montana) revealed his compromise health care proposal to hoots of derision from both sides of the health care “debate,” which, under normal circumstances, would indicate that the bill might have something going for it. While I have been reluctant to comment on the specifics of any health care bill, both because I’m not sure how I feel about the entire “health care reform” proposition (See, inter alia, my 8/13/09 post, TAKE A DEEP BREATH, my 8/26/09 post, “…WOIKIN’ FOR THE MAN EVERY NIGHT AND DAY…”, and my 9/11/09 post “WE PROTECT YOUR HEALTH”) and because I think that, in the end, nothing substantive will pass (See my 8/29/09 post “PENNY LANE IS IN MY EARS AND IN MY EYES…”), one of the specifics of the Baucus plan, and indeed the specific that has raised the most hackles, deserves comment.

The Baucus plan requires people to buy health insurance or face a sliding scale fine that reaches $3,800 per family for those whose earnings exceed 300% of the federal poverty level, or about $66,000 per year. Subsidies would be provided for those families with earnings up to 400% of the federal poverty level, or $88,000 per year, designed to keep, but, in practice, not always successful in keeping, the amount paid for premia to a maximum of 13% of their income. This provision has some people, especially Republicans who love to profess their concern for the “middle class,” apoplectic. It’s a costly mandate, they argue, that will wind up forcing people to pay more for health care than they are paying now. And they are correct; those who currently pay nothing for health insurance, because they don’t have any, will pay more for health insurance because they will be forced to buy such coverage. However, isn’t that one of the major thrusts of health care reform? Pressure on health care costs will be brought down, at least for those who have insurance, by mandating coverage and thus no longer forcing those with insurance to pick up the bills of those who don’t have insurance, by choice or necessity. Under our current, or any, “system,” most uninsured people will not be denied care in the event of a catastrophic illness or injury; they will go to emergency rooms and get the care they need. It might not be the best care, and it will, in most, but not all, cases be limited to catastrophic care, but it will be expensive care, and someone else, under the current “system,” will pay for it. Just as we make people buy car insurance so that the cost of their wrecks doesn’t have to be borne by those responsible enough to buy insurance, any health reform bill should force people to buy insurance so that the cost of their health care, and the cost of their implicit insurance (the assurance that they will get the care necessity to save their lives) doesn’t have to be borne by those responsible enough to buy health insurance. This is an issue both of fairness and of economic efficiency.

Cost is a problem in many cases. Even though, in a recurring theme of the Insightful Pontificator, I refuse to believe that most people don’t fritter away enough money on useless manifestations of their own silliness to cover at least part of the cost of something as vital as health insurance, 13% of one’s income is a lot to suddenly have to spend. Two points are merited, however. First, having to spend that much will make people realize how much health insurance, and health care, costs. The overwhelming majority of people who get their health insurance through an employer provided plan have no idea how much health insurance, or health care, costs. Interestingly, most people involved in this debate get employer provided health insurance, and, in many cases, that employer is the government. If they had to buy their own individual policies, they would have a firmer handle on costs. That is why I am given to saying that the opinions on this issue of those who do have employee coverage is, while not worthless, not nearly as valid as the opinions of those of us who use after tax dollars to buy our own health insurance.

Second, if anything like the Baucus bill becomes law, it is a reasonably sure bet that the aforementioned subsidies will be increased simply because some people cannot afford insurance without greater subsidies and other people are not going to give up their big screen televisions, frequent meals out, big ticket sporting events available for free on television, and luxury cars for something so trivial as health insurance without a deep excavation into your pocket to pay for it. But the more we subsidize health insurance (and take such steps as requiring coverage of those with preexisting conditions, one of the aspects of health insurance reform that stands a decent chance of actually becoming law), the closer we get to government financed universal health care and something very close to a public option and, eventually, a one-payer system. Health care reform is something that is very difficult to do incrementally.