Tuesday, October 06, 2009

Reppert on Obamacare

“You wouldn't happen to know where this is in the bill, or what Obama statement this comes from?”

For example:

“Section 123 (30) – Establishes a ‘Health Benefits Advisory Committee to recommend covered benefits and essential, enhanced, and premium plans.’ The Advisory Committee would be chaired by the Surgeon General and include members appointed by the President, the Comptroller General, and representatives of relevant federal agencies.”


Back to Reppert:

“If they are Presidential appointees, and they did something like this, it would fall back on the President's head politically. If someone were victimized in such a way, they would run straight to FOX News and tell their story (assuming the rest of the media is too biased to listen). I certainly would.”

I thought you didn’t approve of single-issue voters. Now, however, you’re suggesting that a president’s chances for reelection should turn on whether or not the electorate approves of how his healthcare appointees perform. Is that it?

Customers of insurance companies or HMOs judge their healthcare providers by how well or badly they provide healthcare.

By contrast, the policies of the Executive Branch involve a complex package of issues–some more important than others. Some more important to some voters than other voters.

“The present system is prohibitive for people of modest income who don't have a large enough full-time enployer to provide coverage (I know, since almost all my work has been part time for the last 19 years--full time in total, but part time per employer), there are pre-existing condition exclusions, people get dropped by their insurance companies when the get sick, and there are lifetime caps on what insurance companies will pay for a person's care.”

i) To begin with, Obamacare is not about making healthcare available to everyone who needs it and/or wants it.

Rather, this is about mandating that everyone pay for it whether or not they need it or want it. So access is not the issue. It forces everyone to be covered to cover those who currently lack coverage, but need it or want it. So it’s not about equality of opportunity, but equality of outcome. Let’s be clear on that.

ii) Likewise, this is not about making healthcare more affordable for all. As one legal analyst, who is not a rightwing ideologue, points out:

* "The problem of rising costs." The centerpiece of Obama's advocacy has been that "my plan" will "slow the growth of health care costs," now nearly 17 percent of gross domestic product and racing higher. But his plan would quite clearly increase costs dramatically, which is why he is proposing so many new taxes, "fees," and other levies.

Mandating health insurance (or Medicaid) for 30 million more people will cost hundreds of billions of dollars. Requiring insurers to accept people with costly-to-treat pre-existing conditions will cost billions more.

These particular costs are justifiable, in my view. But they are surely costs. And they are not sustainable in the long run unless they are offset by savings far more serious than Congress is likely to adopt on Medicare (see below) or anything else.

While Obama and Senate Finance Committee Chairman Max Baucus, D-Mont., have proposed significant steps to restrain the growth of health care costs, to their credit, it would probably require much more focused public advocacy to persuade Congress to make fundamental changes in the single biggest driver of the waste and inefficiency that feeds health care inflation. That is the fee-for-service system, under which doctors make more money if they do as many marginally beneficial and arguably unneeded procedures and tests as possible.

Nor has the president made more than a token effort (by proposing to tax "Cadillac" insurance policies) to give consumers a stake in holding down costs. People who would decline to pay out of pocket for many tests, treatments, and drugs almost always consent to them when insurance picks up the tab. And insurance plans often cover such wasteful costs. Because of a decades-old tax subsidy, employer-provided insurance covers not only the necessary, unexpectedly large costs that consumers cannot afford -- the traditional reason for buying insurance -- but also many not-so-necessary tests, procedures, and drugs.

The bill proposed by Baucus, which Obama backs except on some details, would diminish consumers' already weak incentives to hold down costs by requiring insurers to reduce co-payments and deductibles.

* Slashing Medicare's waste and fraud. Obama has vowed to save "hundreds of billions in waste and fraud" from Medicare -- without affecting benefits. This is a fantasy discredited by the countless broken promises of other politicians over the decades to do the same and by Obama's own failure to offer credible specifics.

While Medicare includes plenty of waste, much of it is inextricably intertwined with the benefits that Obama promises not to cut. The Congressional Budget Office has confirmed that the Baucus bill's $130 billion in cuts (over 10 years) to Medicare's managed-care plans would reduce benefits. Some benefits probably should be cut as insufficiently cost-effective. But that doesn't make them "waste and fraud."

* Preventive care saves money? Obama has suggested that requiring insurance companies "to cover, with no extra charge, routine checkups and preventive care" will cut costs. The opposite is probably true. Although judicious expansion of preventive care makes sense, the savings from early detection of some medical problems will be exceeded by the overall cost of requiring insurers to cover tests and marginally beneficial (as well as necessary) preventive care.

My daily statin pill seems sort of necessary (to me, at least) because it may extend my life by keeping my cholesterol down. But it costs my insurer over $2 a day and lessens my incentive to cut cholesterol by changing my diet. Justified costs are still costs: The longer statins keep me alive, the more my other medical problems will cost my insurer and eventually Medicare.

* "Absolutely not a tax increase." That was Obama's response when asked by ABC News about what Baucus calls the "excise tax" of as much as $3,800 a year (since lowered to $1,900) on families who defy his bill's mandate to buy comprehensive health insurance.

The mandate itself is a kind of tax. CBO projected that by 2016, the original Baucus bill would require an individual earning $32,400 a year to pay $4,100 in premiums before getting any subsidy, plus an average $1,500 in deductibles and co-payments. (The much cheaper catastrophic coverage that many people would prefer would not satisfy the mandate.) Baucus has been scrambling to lower these premiums by raising subsidies. But the only ways to get the money are to raise other mandated premiums or taxes, make more Medicare cuts, or incur bigger deficits.

So much for Obama's campaign pledge that "no family making less than $250,000 will see their taxes increase." Maybe it's a good idea to require young, healthy people to buy more-costly insurance than they want or need and then use their premiums to subsidize older, sicker people. But it's deceptive to pretend that this is not a tax.

Consumers would also end up paying the original Baucus bill's 35 percent excise tax on insurance companies that offer Cadillac policies valued at $8,000 (now $8,750) for individuals or $21,000 (now $23,000) for families -- an estimated $215 billion over 10 years -- and more than $50 billion in fees on medical devices, lab tests, and prescription drugs. Plus $27 billion in taxes on employers who don't provide health insurance.

* Deficits won't increase? Obama vowed in his September 9 speech, "I will not sign a plan that adds one dime to our deficits -- either now or in the future." The good news is that this should force Congress to produce a plan that at least looks deficit-neutral.

The bad news -- apart from the illusory nature of the promised cuts in Medicare waste and fraud -- is that Obama added an escape hatch. His plan "requires us to come forward with more spending cuts if the savings we promised don't materialize." But when they don't, the "required" cuts probably won't materialize either. That's because nothing can force Congress to deliver any future savings that it "requires" now.

Not to mention the fact that the tax revenues mentioned above would be available to reduce the government's alarmingly gargantuan non-health-care deficits if they weren't spent on Obama's health care plan.


iii) Apropos (ii), you haven’t explained how Obamacare lowers the cost of healthcare. Just because you think something is a nice idea, just because you think we have a problem, doesn’t mean your “solution” is financially feasible. Just because you think something ought to be the case doesn’t make it possible. Reality isn’t infinitely malleable to your wishes.

iv) If insurance companies could never exclude applicants based on preexisting conditions, then there would be no incentive to purchase health insurance until you got sick. Yet insurance companies can only afford to pay you if you back (and others) have been paying into their system for a while.

v) Preexisting conditions are not all of a kind. For example, there is no moral obligation on my part to subsidize someone’s high-risk behavior. If somebody is a chain-smoker, and comes down with lung cancer, I’m under no obligation to subsidize his treatment. If somebody comes down with diabetes because he’s morbidly obese, I’m under no obligation to subsidize his treatment. And, frankly, the needs of my own family come first.

vi) You’re also setting up a false dichotomy by acting as if we must choose between the status quo and Obamacare. But you and I both go back to a time when people didn’t need health insurance to see the doctor. Likewise, when I was a kid, we didn’t go through an HMO to see the doctor.

vii) There’s a trade-off between universal care and the quality care. In a private, fee-for-service system, a doctor has no incentive to ration care. He will provide whatever medical service you can afford.

The incentive to ration care only kicks in when you’re attempting to equalize care.

So it’s a trade-off between lesser care for everyone, or better care for some, and lesser care for others.

You could propose a utilitarian justification for universal healthcare. Since, however, you’re a deontologist rather than a utilitarian, the common good defense is not an option you can use.

“All Obama's public option can do is deny payment, not deny care.”

Are you proposing an unfunded mandate?

If healthcare providers aren’t reimbursed for their services, they will go out of business.

“To actually deny care you have to have a single-payer system in which the health care and health payment are provided by the same governmental entity.”

Of course, Democrats admit that the public option is just a Trojan horse for a single-payer system.

The rest of your paragraph piggybacks on faulty assumptions I’ve already addressed.


  1. BUSTED! Government Healthcare Advocate Admits Public Option is Trojan Horse!

  2. Not every deontologist has to completely ignore consequences. They can be important considerations, even though, in certain kinds of cases, those consideration can be overruled by deontological ones. I don't have to give up on arguments from the common good if I believe that there are circumstances where utility gets us the wrong answer.