Al's Opinions

Many people think of health insurance as though it is similar to insurance on a home, a car, or a business. To achieve a large pool of participants so that an occasional big loss by one requires only a slight increase in the premiums of the others, it is either customary or legally required that everyone who owns and drives a car or who owns a home or business have insurance coverage. That's what insurance is all about: sharing the risk of a disaster.

Health insurance is different. With health insurance, the participant doesn't want an arbitrary cap on the maximum payout. A person doesn't think of his health and life in the same way as he thinks of his house or his car. If the car is totaled, the insurance company will pay the cost of a replacement. The replacement is not a new car; it is another car of the same make and age and condition as the one lost. The same rule applies to a house. In fact, a house is never insured for its full replacement cost; to do so would tempt the owner to destroy his house to collect the insurance if he was having difficulty selling it for the insured value. A participant with health insurance wants the cost of even the most expensive medical procedure paid by the insurance company. If he needs a $500,000 liver transplant he isn't interested in a policy that covers only the first $100,000 of the cost. He wants one that covers the total cost, less a reasonable co-payment.

From the insurer's point of view, the problem with health insurance is that a cap on the maximum pay-out is unacceptable to most subscribers. In self defense, the insurer has to insert the cap in the policy, making sure that it is in the very fine print that the buyer won't notice. It's a way of being able to sell policies with low or competitive premiums and still stay solvent in case a subscriber has a medical problem requiring an astronomical sum of money.

This line of thinking leads me to conclude that the only way to provide real health insurance is for the U.S. government to stand behind the organization that pays the claims. The payer does not have to worry about making a profit each quarter. The payer doesn't have to worry about being wiped out by an extraordinarily large claim. In other words, the solution is a "single-payer" insurance system. To provide the largest pool possible, single-payer covers everyone, including felons in prison and immigrants without papers. Covering the entire population also reduces the likelihood of epidemics of serious diseases, such as smallpox, since everyone will be treated at the first indication of illness.

Since single-payer gets rid of the high overhead costs of private for-profit insurance firms (by getting the firms out of the business altogether), it can and should provide good medical care at a lower cost than our present hodge-podge system of private insurers, self-insurers, and the like. Single-payer by itself will not rein in the escalation or inflation in the cost of health care. That rising cost will have to be covered by changing the way doctors practice medicine. Doctors working on salary at the Mayo Clinic in Minnesota, for example, provide excellent medical care at a cost far less than the same doctors and other providers would charge if they were each operating as a private for-profit busines, with individual malpractice insurance, office staff, and other overhead costs. We need a change from private fee-for-service medicine to cooperative clinical medicine.

Labels: covering illegal residents, high overhead of private insurers, Mayo Clinic, single-payer, Universal health care

Neither candidate favors a single-payer system like the one in Canada. Obama does not rule it out, but instead advocates some mild tinkering with our existing system in which employers provide subsidized health insurance as a fringe benefit. McCain would tax the employer's contribution to the subsidy but would grant a tax credit of $2500 per person or $5000 per family to buy insurance.

On the face of it, McCain's proposal is terrible because it would, in the long run, encourage employers to drop health care as a benefit and would encourage employees to agree to the change. However, the result might be so bad that the public would then clamor for a universal system, such as "medicare for all" instead of just the elderly. By making things worse, McCain's program might hasten the day when the nation will finally adopt a real universal health care system in which, in Obama's words, health care is considered a right, not a responsibility or privilege.

Labels: McCain's tax credit, single-payer, Universal health care

I am a fan of John Edwards. I thought in 2004 that the Democrats would have done better to have had Edwards rather than Kerry at the head of the ticket. He was a better campaigner than Kerry and he had the correct answer to the question, "If you had known then what you know now, would you have voted in favor of the war resolution?" As you may recall, Kerry's answer to that question was "Yes." Edwards' answer was "No." As one who believes that Edwards would have beaten Bush in the election of 2004, I find it incomprehensible that he is not leading in the polls among Democrats. Instead, Democrats this year favor either a woman (Mrs. Clinton) or an African-American (Mr. Obama). Apparently the thinking is that any Democrat can win and the Party doesn't need the special qualities and talents of Mr. Edwards.

Why? In spite of what Ward Connerly thinks, we have a lot of racial prejudice to overcome or at least to live down. We have a lot of prejudice against women in high political office to get rid of. The average woman or African-American who has experienced prejudice and discrimination and still feels that he or she is experiencing it today looks at the possibility of a woman or an African-American as President as a powerful incentive for those individuals who make hiring decisions to see such a President as proof that his or her subconscious feelings that blacks or women should not be put in important jobs are not justified. It is this hidden, subconscious prejudice that still stands in the way of women or blacks receiving promotions that white men take for granted.

Hence, one can argue that electing a black President will do more than all the antidiscriminati0n legislation and all the affirmative action to get rid of this hidden, subconscious prejudice. The same applies to electing a woman to get rid of subconscious prejudice against women.

So, what is more important? Is it more important that the next President appoint "liberal" judges to the federal courts to restore some sort of balance to our system of justice or that the next President serve as an example of the wrongness of subcouscious prejudice? If you are a woman or a black man in a job situation where white men are routinely promoted and you are left behind, you probably value a promotion more than a liberal federal judicial appointment.

I will still vote for John Edwards. I want single-payer universal health coverage and liberal judicial appointments. I am retired and don't have to worry about whether I am going to be promoted next year. However, I suspect that the Democratic nominee will turn out to be either Senator Obama or Senator Clinton.

I won't even make a wild guess as to whom the Republicans will nominate.

Labels: Barack Obama, Hillary Clinton, John Edwards, judicial appointments, single-payer, subconscious prejudice, Ward Connerly

Ronald Brownstein writes today in the Los Angeles Times that California may upset the growing trend toward a national universal health care system. According to Mr. Brownstein, Organized Labor in California is trying to derail the system proposed by "centrist" Governor Schwarzenegger. Schwarzenegger's proposal, like the system enacted in Massachusetts and similar to proposals by Democratic candidates Clinton and Edwards, is essentially a bargain with the very powerful insurance industry. Schwarzenegger would require everyone to buy health insurance. In return, the insurance industry would sell insurance to everyone without regard to preexisting health conditions. A subsidy would be provided for people with low incomes to enable them to buy insurance. In other respects Schwarzenegger's proposal is similar to the system we now have in that employers would be required either to provide subsidized insurance for their employees or pay into a State fund that would provide the subsidies for low income residents.

Mr. Brownstein presents the idea that the Schwarzenegger plan is a centrist plan. I don't know what his idea of a conservative plan would be. It seems to me that the Schwarzenegger plaln is actually very conservative. It keeps all the elements of the present broken plan and applies both band-aids and force to make it work properly. The force is the requirement that everyone buy private insurance. The band-aid is the subsidy for people who can't afford insurance.

There is a liberal or progressive plan, advanced by State Senator Sheila Kuehl here in California and in the Congress by Representative John Conyers of Michigan. That plan gets rid of the private insurers by replacing them with a single-payer insurance pool that includes everyone. Everyone pays into the pool as part of their taxes. The profit-hungry insurers are deleted. Similar plans work well in Canada and in several European countries.

Mr. Brownstein presents a distorted account of reality. He implies that Schwarzenegger's plan is "liberal," and that the "liberal" labor unions are opposing it. Actually, the Schwarzenegger plan is a Republican plan. It was enacted in Massachusetts with the support of a Republican Governor and Republican (and Democratic) members of the legislature. Mr. Schwarzenegger's plan is like the plan proposed several years ago by a Republican member of the California Assembly. We liberals have little interest in it. We have our own "liberal" plan, a plan that has worked well in other parts of the world. To us, the Schwarzenegger-Massachusetts plan has not demonstrated that it is capable of providing good quality health care to all at a price that our society can afford.

Labels: Arnold Schwarzenegger, Conyers, Massachusetts plan for universal health care, Ronald Brownstein, single-payer

It is said that many Democrats favor Senator Hillary Clinton over the other candidates for President because she is "strong." She is said to be stronger than Senator Obama. Nobody even compares her with the third most popular person in the race, former Senator John Edwards. (He's my favorite.) Her husband once said that the American public prefers a candidate who is strong but wrong to one who is right but weak, or perceived to be weak. Actually, it's the perception of strength or weakness that counts, not the real strength or weakness of the candidate. Senator Clinton has a manner of speaking and expressing herself that gives the public the perception that she is a strong person.

I ignore her personality and her manner of speaking. In thinking about positions she has taken, about her unwillingness to concede that her vote for the resolution that allowed the President to start a war with Iraq was a mistake, and in particular about her health care plan, I see her as a politician who is cautious and unwilling to take a position or support a proposal that she thinks would be unpopular with a significant part of the public. She knows, for example, that most Republicans still support the war and believe that it was the right thing to do. In her campaign for the Presidency, she hopes to get a few Republican votes. She knows that although most Democrats favor a single-payer plan to achieve universal health coverage most Republicans and many independent voters distrust a government-run health insurance plan. She also knows that the insurance industry is implacably opposed to any plan that will reduce the number of potential insurance purchasers.

She is not willing to take on and oppose publicly the insurance industry or the independent voters who still think that we should not leave our armed forces in Iraq to prevent a genocidal civil war. I do not think that this cautiousness indicates that she is a particularly strong person.

It comes down to something a friend once said to me. His name was Henry Whitelock and he called himself a conservative Democrat. I was appalled at some of the things that a particular political leader was saying. Henry agreed that they were appalling things, but he liked to hear them said. Senator Clinton has a manner of speaking that suggests great personal strength. People like to hear her speak in that manner. People perceive her to be strong. It doesn't matter that perhaps she is wrong about some of the issues.

Labels: Bill Clinton, health insurance industry, Hillary Clinton, Republican support of the Iraq war, single-payer, Strong and wrong

There was an article in the newspaper today about Senator Clinton's plan for universal health care, or universal health insurance. It struck me that the outline of the plan was similar to the plan that Governor Schwarzenegger has proposed for California. As I understand it, the Clinton plan has the following elements:

1. Persons who are satisfied with their present health insurance will be allowed to keep it. They will not be required to enroll in the new plan.
2. Everyone, including healthy young people, will be required to buy health insurance. Adding these health people to the existing insurance pools will make it possible for insurance companies to reduce their premiums to make health insurance more affordable.
3. A government-sponsored plan will be set up for people who don't like the existing choices of health insurance or who are unable to afford health insurance, either through poverty or through a preexisting medical condition.
4. Large companies that do not provide subsidized health insurance for their employees will be required to pay a fee or tax, whatever you call it.

I have mixed feelings about this plan. Of course, I recognize that the devil is in the details. Perhaps if I knew all the details, I would like it, or hate it. Now I have mixed feelings.

First, the plan keeps in place the private insurers. Insurance companies, with their bureaucracies dedicated to maximizing the profit for their companies by denying benefits are a major cause of the rapid increase in medical costs. Clinton does not do anything to rein in the insurance industry. Instead, she hopes to keep the industry quiet and not run "Harry and Louise" ads against it.

Second, I would like to know more about the government-sponsored insurance for those who can't or won't buy private insurance. Perhaps this feature can grow and eventually become a single-payer insurer. Perhaps it will wither because insurance companies will offer loss-leader policies to healthy individuals who are considering choosing the government plan. This is a feature that would cause me to support the plan if I believed that it would grow into a single-payer. If I believed it would wither, I would oppose the plan.

Third, to her credit, Senator Clinton is trying to craft a plan that has some chance of enactment at present - or after George Bush leaves office, for he will certainly veto any form of universal health insurance that has a government component.

At any rate, I'll have to wait for more details before I decide whether to support or oppose it. (Not that my position will have any effect)

Labels: Hillary Clinton, insurance bureaucracy, single-payer, Universal health care

My conservative friends and I have a continuing debate by e-mail about such notions as Universal Health Care. Here is a recent e-mail from one of them:

Al,

I agree with you that both Parties are obsessed with policies affecting
small numbers of people, and they do so without much concern for
principle. I think this is a result of the era of scientific polling, which allows small groups of one-issue voters to be identified and subsequently catered to as a means of winning a narrow election. The nonsense of pushing up corn prices by mandating ethanol is a prime example. Politicians are tripping over themselves trying to buy votes in Iowa, even though ethanol makes no sense in terms of energy independence or reducing pollution, and it raises overall food costs significantly for everyone. Immigration policy is another example.

Both parties are trying to get a marginal number of Latino votes by totally ignoring border security.Insofar as the Democratic Party is dominated by Liberals, they do favor imposing national solutions as the preferred mechanism for solving problems. Perhaps 10% of the population has a problem paying for health care, so the solution proposed is to put 100% of the population under the control of the government. When the solution is universal, it will tend to benefit by lack of comparison to better alternatives.The current lot of
politicians are so bad, it seems to me that a third party would have a better chance than any time in the past century.

R

My response was that I don't believe the ten percent figure R cited. I haven't seen any data on the fraction of Americans that have problems paying for health care; if such data exist, I suspect the number is greater than ten percent. The data I have seen is that public opinion polls show that more than half of the population favors some form of Universal Health Care, whether it's a Canadian-style single-payer, a subsidy to enable everyone to buy a good health insurance plan, or a National Health Service, such as what Britain adopted after WW-2. Because UHC is so popular with the public, I have to believe that a lot more than ten percent of the public is worried about whether medical expenses can be paid. In our system, in spite of what R and other conservatives assert, if medical expenses can't be paid, they won't be delivered. Getting emergency medical treatment at hospital emergency rooms is not a substitute for good medical care, a fact that the public recognizes even if R doesn't.

Labels: National Health Service, popularity of the concept of UHC, single-payer, Universal health care

In yesterday's post (see below) I commented on a recent Libertarian argument against a proposal to provide universal health insurance to all by means of a single-payer system. Canada has such a system, as do many other industrialized countries. I am not satisfied with my own critique of the Libertarian argument against such an approach. I know that there are others who are much more able than I am to mount a convincing defense of single-payer and a devastating attack of the Libertarian argument. However, I will attempt such an attack anyway.

The writers made the following four arguments against proceding now with setting up a single-payer plan:

1. A single-payer or universal plan doesn't provide timely access to certain expensive medical procedures, such as joint replacements or organ transplants.
2. Lack of personal health insurance or personal wealth does not preclude Americans from obtaining health care from hospital emergency rooms.
3. Statistically, one can not show that having health insurance correlates with having better health.
4. The additional cost of caring for the uninsured is no more than three percent of the total cost of the American health care system, the writers say.

Rather than proceed with a single-payer or universal plan, the writers recommend that we should try to do something about things that drive up the cost of health care to mericans. We should adopt such remedies as health savings accounts, a standard health insurance deduction in the personal income tax, and deregulating the insurance industry.

1. Access to such procedures as joint and organ replacements are delayed in some countries by a shortage of facilities to perform the procedures, not by the bureaucratic inefficiency of the government's health care plan. In addition, in our own country, these precedures are not available to persons who lack both insurance and the money to pay for them. We read in the papers of accounts of poor, uninsured persons who do receive such procedures, but they are the exceptional cases in which some generous person or organization pays the cost. Libertarian point #1 is not a valid argument against universal health care.
2. Emergency room care also does not provide expensive treatments like organ or joint replacements. It provides only the medical services needed to prolong a person's life or to treat an illness. If you have a weak heart and have a heart attack, the emergency room staff will resuscitate you but will not give you expensive treatment for your condition.
3. There are several possible explanations for the lack of correlation between having good health and having insurance. One is that a majority of Americans do have health insurance. The lack of correlation simply means that insured Americans, on the average, are as healthy as the average uninsured American. A good fraction of uninsured Americans are young people with good health who either can't afford the insurance or don't see any need for it. Another is private insurance is not structured to encourage one to stay healthy by having frequent check-ups. It is structured to enhance profit by discouraging visits to the doctor unless the patient has a case that is convincing to the insurance adjuster.
4. To argue that the cost of caring for the uninsured amounts to "only" three percent of the cost of the American medical care system and then to argue in favor of such controversial and untested remedies as deregulating the insurance industry, setting up personal health savings accounts, and an insurance deduction in the income tax seems rather hypocritical to me. I have no doubt that providing insurance to the uninsured would reduce that three percent cost to something less.

Anyway, for what it's worth, there is my answer to the Libertarian argument against universal health care or universal health insurance. I welcome your comments.

Labels: Cato Institute, delays in expensive medical treatments, Libertarian, single-payer, Universal health care

According to some politicians, the crisis in our health care system due to persons without health insurance flooding hospital emergency rooms for health care is due to all the illegal immigrants we have in the country. These illegal immigrants don't have health insurance. They don't pay taxes that would support the public schools, yet our schools are flooded with their children. And so it goes. Yada, yada, yada.

Today the Los Angeles Times has a story about well-to-do professional workers who are self-employed. Two decades ago these professionals obtained health insurance at group rates through their professional associations. Today most of these group plans have been terminated. You can read the story here.

Insurers have been terminating these group plans in recent years because of several effects, including:

1. Medical costs have been increasing rapidly.
   
2. Young professionals have been buying individual insurance at rates less than the group rates offered by the professional associations.
   
3. As a result, the cost of insuring the remaining older professionals has increased rapidly.

In our private enterprise system, insurance companies are forced to operate to maximize their profit. The result is that they look for young, healthy individuals to insure and either cast off the older, more expensive individuals or charge very high premiums to insure them.

Many of you won’t agree with my conclusion, which is that we need a complete change in the way Americans obtain health insurance. Leaving matters to the marketplace, as we are now doing, guarantees that only the very healthiest individuals can obtain health insurance at prices they can afford. To me that’s just not fair and it’s not right. Access to good medical care should be available to all, not just the healthy young and the very rich. We need an insurance system that provides affordable health insurance to everyone and which everyone has. One means of accomplishing this goal is the single-payer plan. Canada uses such a plan. Legislation to establish such a plan for California is in work in the State Legislature, even though a bill to establish single-payer was vetoed last year by Governor Schwarzenegger.

The political problem with single-payer is that it removes private insurers from the lucrative health insurance business. These private insurers have a lot of political influence, spelled M.O.N.E.Y. The single-payer bill was adopted by the Legislature last year. It can be adopted again. We must persuade the Governor to sign the bill. Any suggestions on how to do so will be welcome.

Labels: effect of illegal immigrants, Health insurance crisis, insurance for self-employed professionals, single-payer