C'mon Ezra,

You're Barak "stay in Iraq" Obama all the time.

"like me, he's been skeptical about Obama's commitment to the issue"

When Barack Obama and fellow state lawmakers in Illinois tried to expand healthcare coverage in 2003 with the "Health Care Justice Act," they drew fierce opposition from the insurance industry, which saw it as a back-handed attempt to impose a government-run system.
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Over the next 15 months, insurers and their lobbyists found a sympathetic ear in Obama, who amended the bill more to their liking partly because of concerns they raised with him and his aides, according to lobbyists, Senate staff, and Obama's remarks on the Senate floor.

http://www.boston.com/news/nation/articles/2007/09/23/in_illinois_obama_dealt_with_lobbyists/

The candidates need also need to focus on long-term health care. The current debate hardly mentions it.

What is called custodial care (help with bathing, dressing, toiletting, transferring, eating, laundry, shopping, cooking, transportation) is not covered by either Medicare or private insurance. Elders battling with osteoporosis, Alzheimer's, Parkinson's Disease do not need skilled nursing care. Medicaid becomes the program of last resort, after people spend down their resources to become eligible. In New York nursing homes cost over 100,000 a year. Home health agencies charge up to $20 an hour for home health aides, although the aide rarely getting half that amount. Medicaid offers better nursing home coverage than home care coverage. Programs giving government grants to elders for home repairs, ramps, stair-lifts, modified bathrooms, guardrails, could enable more people to stay out of institutions.

Long-term health insurance is a very imperfect remedy. Many companies, if they stay in business, list so many exceptions to coverage that many people need to hire an expensive geriatric case manager to get what they are entitled to

232 House members are former State legislators. 39 Senators are former State legislators. It's true that the stakes are higher in the US Congress but the tactics and strategies used to generate good legislation are largely identical.

I guess it comes down to whether you think it is better to go for universal coverage in one shot or work on a non-universal reform plan with the idea you can successfully revisit healthcare several times during your (two term) administration.

This is a useful post, and thanks to Ezra for providing it, and for giving us the opportunity to wonk on about the health care issue.

No one who has followed the debate among Edwards, Clinton, and Obama on health care doubts that Barack Obama is deeply committed to universal health care. But there are two questions which need to continue to be asked about Obama's approach to making universal health care a reality.

1. Are there conceptual flaws in Obama's approach – independent from the charge of naïve kumbayaism in his self-articulated Big Table negotiating style, a matter I take up in the second question?

I have argued elsewhere -- as has Ezra, and certainly more economically than me -- that the lack of mandates in Obama's plan is a potentially fatal conceptual flaw which will not only torpedo universal health care, but which will leave us with a camel of a plan even worse, in terms of efficiency, and eventually quality, than the one we have now.

To reprise the argument as succinctly as I know how, which is admittedly not very succinct. But sorry about that.

* "No mandates" arguably will lead to compromises on "adverse selection." The form of the argument here is that the Private Health Insurance Industry (PHII) will be able to win the debate -- especially at the Big Table -- that they cannot be expected to shoulder the burden of both no mandates and adverse selection. That economic reality, coupled with the fact that Obama will not be able politically to back down from his no mandates pledge (Republicans in 2012: "You read his lips, he said no mandates, and what happened?"), will lead to compromises being made with PHII on adverse selection.

* The skids will be greased for these compromises because the Federal insurance option will be sitting there as too easy of an opportunity to serve as a dumping ground for disproportionate numbers of high risk individuals who will not "qualify" for one of the PHII plans.

* Once the Federal option becomes such a dumping ground, there is little hope that it will be able to compete with the natively more inefficient PHII plans. And thus the Federal option, which Edwards and Clinton and arguably even Obama would have hoped would grow up and become a universal single payer plan by virtue of its own inherent greater efficiencies -- and thus push PHII plans to the margins in support roles as supplemental coverage (compare the relationship between Medicare and Medigap plans) -- will be permanently disabled before it has a chance to get fully ambulatory.

* The fact that the Federal plan will have become economically less efficient than the PHII plans (in terms of standard indices of insurance such as cost per insured, "break even" levels for premiums, etc.) will be used as a partisan club by the Republicans and the PHII lobby to make certain that single payer – which could only be done by that "hopelessly inefficient" Federal government – will never be heard from again.

* Our taxes will needlessly go up – as has been true to support Medicare Part D and Medicare Advantage plans.

* But PHII, their shareholders, and their 8-9 digit compensated executives will be doing just fine, thank you, feeding at the public trough with, at best, only whack-a-mole regulation to keep them in line.

* All because Obama, with the best of intentions and the strongest of commitments, boxed himself in with his no mandates pledge.

Which brings us to the "methodological" question ….

2. Is the Big Table approach really the most effective way to deal with the nest of vipers that is Washington – where Big Insurance and Big Pharma have not lost any significant battles since Medicare and Medicaid themselves were bulldozed through by LBJ in the 1960s?

Dunno for sure.

But it is perhaps revealing that Jon Cohn chooses to put in parentheses, in a single sentence in mid-paragraph -- what is arguably the most salient fact about what Obama accomplished between 1996 and 2004 while working to achieve his own self-professed goal for universal health care in Illinois:

"(It's worth noting that, despite the task force recommendations [a key feature of Obama's Big Table approach to propelling universal health care forward in Illinois], Illinois actually hasn't enacted universal coverage yet.)"

Surely that fact is "relevant" as well?

You heard here first. HRC wins in NV and SC.

Why?

Chris Matthews just made this possible. A public apology. Media will play this over and over.

Similar to the false-tears in NH.

http://newsbusters.org/blogs/geoffrey-dickens/2008/01/17/chris-matthews-apologizes-hillary-clinton

I meant to add that after NV debate this week, Matthews said that HRC was great, she won, etc.

This was the indirect response to this thread. Matthews is scared. The implication is that HRC will ride in free like false-tears with her message.

In sum, Matthews has unwittingly helped HRC win NV and SC

If you believe that a single payer solution is what is required then it's clear that Obama will not make it happen. The Insurance companies are unlikely to negotiate away their existence in the health market.

Regarding adverse selection. Is there any reason this couldn't be handled the same way it is in the car insurance market? Namely the assigned risk pool.

The way it works in auto insurance is that the drivers who are "uninsurable" end up in the assigned risk pool. They are then placed with insurance companies that do business in that state in relation to that companies market share. So if State Farm issues 27% of the policies in that state, they get assigned 27% of the assigned risk pool.

It seems like this could work just as easily for health insurance. Insurance companies fear they will end up with more of the undesirables then their competitors, putting them at a disadvantage. This drives them to be better at identify and weeding out those undesirables. An assigned risk pool would ensure that everyone at least has the option of buying insurance while also ensuring the various insurance companies shoulder their fair share of the undesirables.

Jason k:

I may be wrong (I'm no economist, just a law student), but my impression is that there's too much of a risk spectrum in medicine for the assigned risk pool to work.

Most people have approximately the same risk of getting into a major automobile accident (i.e., small), and when they do the coverage costs are pretty much the same or at least are randomly distributed. There's a small percentage of people who, because of history or disability, have much higher risks and can be parceled out seperately.

Everyone requires medicine sometime, and the costs of covering someone's "care" can vary by several orders of magnitude. We'd have to put everyone in the assigned risk pool if we wanted to distribute costs fairly amongst insurers. At which point there's really not much point to having them at all.

For all the policy discussion on mandates and adverse selection, why is it that government reinsurance is always ignored?

Reinsurance is only in Obama's plan and would seem to provide an alternate means for bringing the insurance companies in line... rather than add the cheaper patients, remove the costs associated with the more expensive patients.

As I see it, the way to reach a single payer system is to make it relatively unprofitable for the insurance companies (no easy task). From this perspective, reinsurance seems more useful than mandates because the actuaries will all be playing with the same numbers when the really expensive patients are removed. If they have the same numbers, competition should drive them all to a point of minimal profit.

Given that the 'mandates' discussion arises here as much as anywhere, I'm surprised reinsurance is consistently ignored. I've also been disappointed in Krugman's "analysis" of the issue for this same reason.

Billyblog.. you present a plausible future scenario, but you lend it much more solidity then such a prediction deserves.

You seem to assume that Obama is either unaware of these consequences, has not planned a solution for at least some of them, or is possibly even wanting to follow this exact plan.

It seems unlikely that he and his advisors (even if they are incapable of deducing these outcomes themselves) havent stumbled across a few blogs. Therefore its equally unlikely that he and his staff are completely unaware of these potential outcomes.

His published plans dont deliver so much detail as that, so it is impossible to know for sure what compromises he will make. Also completely ignoring the fact that HRC and Edwards dont just get to demand their plans either, and will be confronted with the same demands for compromise or defeat as Obama. Which of the three has had the most success in this arena? (not rhetorically asked..)

also..
you follow a steady progression, then make a good sized leap of logic.
"* Once the Federal option becomes such a dumping ground, there is little hope that it will be able to compete with the natively more inefficient PHII plans. A"

Why? By definition they are acting in different capacities. Indeed government isnt supposed to be 'competing' in the same domain as is measured in the private sector, profit margins or investment returns. As a safety net they would have to be measured using a different standard.

Not to do so would be like comparing 'welfare' as a program versus an investment firm. One is supposed to provide success, the other survivability.

It could be just as easy to assume higher income individuals could become jealous of low income government care. If they get treatment and only have to demand care to receive it.. why go through the hassle of dealing with PHII? There may be a demand to raise the ceiling higher over time, edging PHII out of the picture. ..again a guess that cant be made, at least by me.

Thanks Ezra for posting this.. I remember back a while when it was all HRC all the time. ..then all Edwards.. with hardly a mention of Barack. Im glad you seem to be covering all their ideas now, and reasonably critiquing them.

..goog reading.

achieve consensus on a good compromise

Then the question is what does Senator Obama consider a good compromise when it comes to healthcare. From his proposal, it appears to be insure children, cover some catastrophic costs, make care cheaper, worry about universal healthcare some time in the future.

This is not reassuring at that he can actually accomplish anyting in terms of successfully passing a good health care plan.

Getting people to agree is not the same as passing, enacting and monitoring that healthcare reform is successful Mr Cohn seems to conflate getting a nice process going the same as achieving the result. It's not and his oddly placed parenthetical rememarks make so clear....Ill does not have any helath care plan at all.

That's not success...just the illusion of doing something.

This is not reassuring at that he can actually accomplish anyting in terms of successfully passing a good health care plan.

Getting people to agree is not the same as passing, enacting and monitoring that healthcare reform is successful Mr Cohn seems to conflate getting a nice process going the same as achieving the result. It's not and his oddly placed parenthetical rememarks make so clear....Ill does not have any helath care plan at all.

That's not success...just the illusion of doing something.

The Captcha system is not working

"Getting people to agree is not the same as passing, enacting and monitoring"

So you want him not only to draft the basic theme of the healthcare plan.. but have it passed, put into practice, and policed before you could consider the potential of his words.

Noone could jump that hurdle.

There are many that have dropped their cynicism for him because they were inspired by his words. ..others are too far gone, and will only criticize to the end.

I dunno eorse [or, as I think of you, Eyeore. From Winnie the Pooh. Your evident spirit-animal], Chris Matthews may be inadvertently responsible for her win in NH, but that was when he was beating up on her.

Now that he's prostrating himself, people might think, "This is pathetic. Who made you do this? You're going too far. Look, she DID get where she is at least in part because of who she married, so don't try and tell me different, just because you said the truth in an ugly way and now you have to apologize. This is just getting ridiculous."

You seem to assume that Obama is either unaware of these consequences, has not planned a solution for at least some of them, or is possibly even wanting to follow this exact plan.

It seems unlikely that he and his advisors (even if they are incapable of deducing these outcomes themselves) havent stumbled across a few blogs. Therefore its equally unlikely that he and his staff are completely unaware of these potential outcomes.

Okay, so this is just about the worst argument I've ever heard on any topic ever debated.

If this is the standard we're going to apply, why should we pay any attention to what any candidate ever says about any policy issue ever? If anyone ever points out any flaws in my candidate's proposals, I can just say, "If you thought of it, it seems unlikely that he hasn't already deduced a solution."

Thanks to Jason k, TheKingInYellow, Anonymous, and david b for their thoughtful responses to my post. A good level of discussion going on here, with the rant factor – I am probably the worst offender on this – kept to a minimum

Some follow-up.

Jason k:

TheKingInYellow offered some of the same comments I would have on your proposal for assigned risk as a solution. So I won't repeat what he says. I would just add the following:

Assigned risk pool drivers – rightly or wrongly, I think most rightly, but mistakes are not non-existent – pay higher premiums for their car insurance. Having differential premiums in a supposedly universal health care system – apart from differences based on differential regional cost factors and some other technical considerations, but manifestly not because of individually based adverse selection issues -- goes against the basic ethos behind most such proposals. This is not to dismiss the idea out of hand, but rather just to highlight that there are some fairly fundamental philosophical and social contract issues which would have to be thought through very carefully on this score. Such issues are arguably beyond the scope of this particular medium of idea exchange, and, accordingly, I won't pursue that particular line of thought further here.

I fully understand, of course, how, within the framework of a somewhat narrower political and economic horizon, the Private Health Insurance Industry (PHII) might argue for such a system -- and then promptly propose that the additional cost for premiums should be paid for by tax dollars rather than be loaded directly on the backs of the higher risk individuals. But this is simply a back door way of getting around adverse selection, whether those who are not allowed into the lower risk pool are nominally retained by PHII or formally passed over to a Federal plan.

I would add that this would appear to be both the intent and possible effect of the Obama reinsurance option mentioned by Anonymous: i.e., PHII would be able to get out from under adverse selection by passing the burden back to the Federal government (read: the taxpayers). Proposals for the government being the guarantor for catastrophic coverage are variations on this same theme of three-card-monte-ing the costs.

What most such burden shifting proposals have in common is that they simply dodge the fundamental point that PHII is inherently less efficient than a governmental system of insurance. And it is arguably not sound public policy to try to perpetuate these inefficiencies with bookkeeping tricks.

Please note – once more – that I am not dealing in hypotheticals here. We have had a roughly 40 year experiment going on with Medicare, a single payer universal health care insurance system for the >65 population. And for the past 15 or so years of that period Medicare has been competing head-to-head with a well-planned and ideologically driven attempt to "complement" (read: undermine) it with government subsidized Medicare Advantage programs offered by PHII.

Well, the results of this "pilot project" are in, and they are not ambiguous. Medicare wins hands down in terms of economic efficiency and concedes nothing to the Medicare Advantage plans in terms of quality. It is no longer just a theory that a single payer and (relative to a particular age cohort within the population) universal health care insurance program might be superior to a so-called "free market" (it ain't free market, it's government subsidized for Crissakes!) PHII system. It is superior – end of story. And our basis for knowing this is statistically sound, market place based results. (And, though not directed at anyone in this thread, please spare us any anecdotally based horror stories that supposedly provide a rational basis for ignoring the overwhelming statistics about the superior performance of government run Medicare relative to PHII run Medicare Advantage programs.)

Having said that, if Anonymous has convenient links to any grainier details on Obama's proposal for reinsurance, I would appreciate receiving them. I want to look very carefully at what Obama has to say before I pronounce a firm opinion on whether I think his proposal for reinsurance is constructive, or simply a way of giving PHII a way to mask its inefficiencies relative to a government insurance plan – and pass the bill on to the taxpayers so that they can more easily keep their executive bonuses in the stratosphere.

Though let me say, within a restricted compass, I actually do agree pretty much with the following from Anonymous:

"As I see it, the way to reach a single payer system is to make it relatively unprofitable for the insurance companies (no easy task). From this perspective, reinsurance seems more useful than mandates because the actuaries will all be playing with the same numbers when the really expensive patients are removed. If they have the same numbers, competition should drive them all to a point of minimal profit."

Yes, if the high risk population is not dumped into the "official" Federal pool (actually, there would probably be multiple Federal pools spread out on a regional basis, but let's keep the model simple for a moment), and the Federally funded reinsurance program was allowed to be kept out of the accounting – but can you imagine the boys over at AEI and the Cato Institute would really let that happen? -- then the Federal program would eventually grind down and eliminate most of the PHII offerings in the market place. Actually, the overall effect would predictably be to cause a migration of PHII plans from basic to supplemental coverage. But, again, this would not change the fact that, for a time at least, the taxpayers would be absorbing the inherent inefficiencies (relative to the Federal plan) in the PHII plans.

If this were the only realistic compromise available to achieve the long term goal of single payer, then I would (conceptually) support it. But I think there is a faster and more direct way, and that Obama appears, unfortunately, to have unilaterally disarmed himself in advance from taking this path.

Also, I am very concerned with how a "punctuated equilibrium" model for change might assert itself in particular case. Evolution – and especially in political systems -- is not always a, more or less, gradual process. If you don't get it right the first time, the "reformed" system can quickly build up its own "natural" resistance (read: well-heeled lobbying supported special interests) to further evolution in the direction originally intended. Under such circumstances, change can easily stall – at a far from optimum point in this particular case – and maybe even go into reverse.

Medicare Part D is a cautionary tale in this regard. Remember how the Democrats in 2006 said that one of their first post-election priorities was to get the Federal government back in the game as a player in Part D? They were going to straightaway rescind the outrageous Billy "I now work for PhRMA" Tauzin legacy of prohibiting Medicare from negotiating prices for drugs. Hasn't happened yet. And don't count Big Pharma out from getting this obscenely successful raid on the Federal treasury grandfathered into any future health care insurance reform, at least in part, even if the Dems get back in the White House and control Congress. It goes without saying that the Republicans would never reverse course on this legalized looting of the public coffers.

To answer some related concerns which have been expressed by others in this thread, though only obliquely directed at anything I may have said as far as I can tell .…

I realize that there are Social Darwinists and, alas, either terrifically uninformed or downright disingenuous politicians out there who really do seem to want to argue that consumer driven "personal responsibility" should be the defining parameter for determining what sort of health insurance system we should have, and, in particular, how it should be financed. Mike Huckabee, a born again "I-got-back-in-shape-you-can-do-it-too" sort of guy can sometimes be heard pushing this line. I leave it to others to determine where he might fit on the uninformed-disingenuous scale.

Even some otherwise intelligent economists get a bit overly enamored – to the point of fetishization -- with their closely related concept of moral hazard, as they term it, when it comes to health care. You know: "Give 'em free or low cost health care and they'll all turn into party animals who never go jogging and who personally put hammerlocks on their doctors to order up every new test under the sun for their indigestion."

Good luck in trying to get sound statistical support for such Hubbardian intuitive hunches about the saliency of this moral-hazard-as-a-major-source-of-inefficiency-in-the-health-care-system theory. There is simply no firm statistical basis supporting such a claim.

Don't get me wrong, I'm not against doing everything we can to get people to take maximum responsibility for their physical well-being, and to be as educated as possible about their health care alternatives. There should be educational and health lifestyle educational programs galore – from pre-school to grave -- to support this sort of thing. But the idea that the Archimedean point in health care insurance reform is "an educated consumer" who "takes responsibility" for his personal health and, oh yes, in the process, understands authoritatively that he doesn't need a PET scan in this case, a CAT scan will do just fine, is, to put the point charitably, a fairy tale, to use the phrase du jour.

Educated consumer choice? Sure. But this is simply not a rational substitute for intelligent policy which focuses first and foremost on eliminating the glaring inefficiencies on the supply side of the equation: e.g., the outsized administrative costs associated with our fragmented PHII system – outsized relative to other national health care environments, which other environments fairly uniformly exhibit, again statistically based, population level outcomes materially superior to ours in the U.S.

As far as david b comments on my points of view are concerned, I appreciate all of his criticisms. Even though, from what I have already said, it will be evident that, at the end of the day, I would demur from accepting most of them. Nonetheless, his challenges to my more or less orthodox progressive position on this matter are extremely helpful in sharpening and, I hope, even broadening my own thinking. I can only hope that what I have said may have had a similar effect on him.

There is one thing that he does say, though, that I can agree with pretty much 100%:

"Billyblog.. you present a plausible future scenario, but you lend it much more solidity then such a prediction deserves."

Amen, brother, and that's why, as they say in sports, we should go ahead and actually play the game to see how it all works out.

I keep on returning to this point: it's not enough to look at what these politicians say. You have to look at what they've done. The record speaks well of both Clinton and Obama as serious, effective legislators committed to various progressive issues. Edwards? Not so much.

billyblog your not claiming Medicare has lower administrative cost when you say this are you?

"Medicare wins hands down in terms of economic efficiency"

Bloated admin and unheard of fraud rates even though it's the simpliest plan design possible with no choice. It's a perfect model of inefficency.

billyblog: Thanks for your thoughtful post. I was the reinsurance 'anonymous' post... after trouble getting the post to take several times, I apparently forgot to re-enter a name.

Your comments do indeed reflect the type of debate that policy-types should have. Unfortunately, I've been frustrated by the lack of depth in all the 'mandates' hoopla... and have dismissed most of the talk as merely partisan (including, unfortunately, Krugman). The real ground for discussion is not the moral imperative for universal coverage... it's about how to get from status quo to 'somewhere else.'

And I wholly agree that 'somewhere else' is a single-payer system. As far as I know, the VA health care system is the most shining example of health-care efficiency in the US. And a part of this efficiency is that the goals of the insurer are actually aligned with health outcomes due to the commitment in the VA system for lifetime care. Now, getting to a single-payer system is likely a political minefield which I have no idea how to traverse. However, I'm moved by Obama's notion that the only way to move mountains is to get a big, grassroots majority.

Unfortunately, I don't have much additional detail on Obama's reinsurance plan other than what I remember as a single line from his website and an oblique reference from an article that I read somewhere. I think he was planning to use about $65 billion in federal subsidies for reinsurance, which can be compared to the ~$120 billion that Clinton and Edwards proposed for subsidizing mandates. I suspect that the $65 billion number may be more about making the proposal palatable to fiscal-conservative types... and therefore undercuts the other proposed subsidies.

Another aspect of this discussion that is politically radioactive is how to decide what defines 'reasonable' health care. Huge amounts of money are spent on research for fancy new technologies that lead to expensive new treatments. But as a society, we simply cannot afford to make the most expensive treatments available to everyone. I think roughly half of our health care expenditures are devoted to patients over their last 6 months of life. Seems like a poor allocation of resources when many of those folks are terminally ill... but what politician (or insurance company) wants to lead the discussion on where to draw the line? Imagine the sob stories about Grandma and Grandpa being denied the latest experimental treatment that they couldn't afford on their own. The playing field is tilted heavily against serious discourse on comprehensive reform.

You have earned the last (substantive) post, wk, and I cheerfully cede it to you.

À bientôt.