Monday, April 03, 2006

Is Gielow a RINO?

Jenna outs my state representative for introducing a bill establishing "socialized" medicine in Wisconsin. Peter and Dad29 and, I'm sure, others express their dismay.

I haven't pored over the plan but the idea seems to be to solicit bids from insurers to provide policies that would have to provide certain coverages but which could apparently differ in some ways. The bill appears to fix the deductibles that can be permitted under the policy and eliminates deductibles for certain type of care. The state would credit each resident with an amount sufficient to buy the low cost policy and, if you wanted a higher cost policy, you'd have to pay the difference.

The plan certainly is "socialized medicine" in the sense that it would be publicly funded (although how it would be funded is not specified) and would seem certain to mostly, if not completely, take employers and out of the health insurance business and to force state residents, at least for basic care, into a policy provided under the plan.

It's not "socialized" in the sense that you would have private insurers to choose from but it's not clear how much they would really be expected to differ.

Although some folks might be surprised that a Republican would co-sponsor a bill like this, I'm not. There is a growing consensus among business people that employers ought to get out of the health care business and there are strong arguments based in market efficiency that they are right. Say you are a 51 yr old and you've got a great idea to start your own business. If you were 25, you might decide to go without health insurance. At this age, that would not be wise. But, particularly if you have some adverse history, you may not be able to buy affordable coverage - or any coverage at all. You might have an idea for the best mousetrap ever, but you'll stay put.

An efficient market wouldn't throw up this barrier to entrepreneurship.

There are other examples. A company with a mature work force is going to have higher costs than a company with younger employees. This either puts it at a competitive disadvantage unrelated to its quality and efficiency or creates pressure to lay off the older workers; something that it is illegal and that may well diminish both its quality and efficiency.

I don't know that this bill does it and, in fact, I'm not sure that it makes sense for the problem to be tackled at a state level. While I'd like to think that a more or less unrestricted free market approach would work, there are some huge market imperfections residing in the fact that 1) for a good portion of their lives people may rationally decide that they won't need insurance, 2) people are not well positioned to judge among health care providers and to make the same trade-offs between dollars and consumption as they are with goods and services upon which their survival does not depend and professional expertise is not required, and 3) we are not willing to allow people to suffer and die for the lack of personal resources or foresight.

I think the solution is going to require some type of mandatory purchase of at least high deductible insurance by everyone and perhaps some restrictions on underwriting by risk profile.

7 comments:

david said...

according to the green supporters the answer is "no" because a democrat would be worse

Dad29 said...

Maybe.

Employers have been trying to get out from under health benefits for quite a while; but I suspect that the "aging workforce" argument is statistical legerdemain, insofar as the entire workforce is statistically stable.

Further, the proposal is rumored to have a ~10% payroll tax attached to it--so cui bono?

Finally, the interests of all employers AND employees will be furthered by publication of provider prices--now slowly being implemented.

Peter said...

Funding it through a payrool tax or a tax on business makes it in my eyes government-run health care, and there is nothing government does well other than national defense.

Turning the healthcare of Wisconsin residents over to the government would make me look for someplace else to live.

Billiam said...

Unless they pull a Canada, and make it against the law to look elsewhere. Why do so many arrogantly think they can make failed experiments like socialism work? Why do they so often ignore the facts? Blinded by ideology, perhaps?

elliot said...

Businesses need to get out from under the healthcare elephant.

My prediction is that business organizations will start pushing hard to shift the burden to government within the next ten years.

Rick Esenberg said...

Elliott is right (since he agrees with me!)and this is going to pose a challenge for conservatives. We are going to have to be for something other than the status quo and while HSAs can be part of that, they are not going to be the entire solution.

Keep in mind, its not just that employers want "out from under" (although they do), but that tying health insurance to one's employer creates market inefficiencies.

Here's another one: No employer wants to retain employees who are ready to retire. They may not perform so poorly that it will be easy to fire them, but they also won't be stars. Yet there are many people who must work to 65 for no reason other than health insurance.

We need to think about a private insurance scheme that addresses the flaws in the health care market and I fear there is no way to do that without some form of regulation like, for example, mandating that everyone buy a policv at age 21 and thereafter and forbidding the companies from risk underwriting so that they can't cherry pick insureds.

I don't know that Gielow has it right (I'm thinking he doesn't) but conservatives can't stand pat on this issue.

Dad29 said...

OK.

Let's start by publishing the prices of all the major hospitals for all procedures.

See how Aurora fares then...