"'Means Testing, for Medicare"

Tyler Cowen:

Means Testing, for Medicare, by Tyler Cowen, Economic View, NY Times: Right now, ... pressing problems may lie ahead — and the presidential candidates aren’t addressing them.

No matter who sits in the Oval Office next year, there won’t be many degrees of freedom in the federal budget. That’s because spending on entitlement programs is largely locked into place, and the situation will become much worse as Americans age and health care costs rise. ... The main problem is Medicare, which reimburses the elderly for many of their health care expenses. ...

There’s one important idea lurking in the shadows that neither campaign is keen to talk about: paying out government benefits more efficiently. To put it bluntly, it means paying out full benefits only to those who really need them, and cutting back on payments to everybody else. ...

“Means testing” ... is one way to better allocate benefits. For health care costs, this could be done by expanding Medicaid, which is focused on the needs of the poor, and making it an entirely federal program rather than one partly paid for by the states. ...[T]he elderly are relatively wealthy. With limited resources, it would be better to reallocate health care subsidies toward the poor, whether they are young or old.

Furthermore, inducing the wealthy to pay for their own health coverage would create pressures to lower costs.

An alternative path is to put in place more means testing throughout Medicare. ... This could be taken much further. Of course, the idea of cutting some government transfers provokes protest in some quarters. One major criticism is that programs for the poor alone will not be well financed because poor people don’t have much political power. Thus, this idea goes, we should try to make transfer programs as comprehensive as possible, so that every voter has a stake in the program...

But even if this argument holds true now, it may not be very persuasive when Medicare costs start to push taxation levels above 50 percent. A more modest program, more directly aimed at those who need it, might prove more sustainable in the longer run. ...

Furthermore,... If taking care of the poor is the real value in welfare programs, those programs should be sold as such to the electorate. We shouldn’t give wealthier people benefits just to “trick” them, for selfish reasons, into voting for .. benefits for ... the poor...

Targeted social benefits have been used successfully around the world. ... The biggest problem with such efforts is measuring and enforcing the rules that establish who receives a specified benefit and who doesn’t. Means testing in Medicaid causes many people to hide income and assets or to transfer assets to family members, so they can look poorer and still get benefits. This is a real problem, but the fiscal difficulties of staying on our current spending path may well be far worse.

Advocates of health care reform tend to be long on ideas for expanding care and access, but short on practical solutions for cost control. The argument is often made that single-payer health care systems in Canada or Europe are cheaper than health care in the United States. But Medicare is already a single-payer plan, yet its costs are unsustainable.

The best option is probably to tie the size of Medicare benefits to a person’s lifetime income, which is relatively easily measured and hard to game...

Don’t expect to hear much about targeted benefits anytime before November. Such proposals would acknowledge the painful but probably realistic notion that we don’t have many good ways to control health care costs.

Furthermore, balancing the budget is a popular goal, while cutting benefits is not. But if you’re asking which ideas are most likely to transform economic policy over the next 15 to 20 years, here is one place to start looking.

I believe the political argument that giving everyone a stake in the program helps to preserve it has more validity than Tyler does, market failures (some of which hit all income groups) probably play a larger role in my thinking about government responses to the healthcare problem than in his, and I have more confidence than Tyler that a universal care system has the potential to lower costs.

Update: Responses to Tyler's column from Paul Krugman, Greg Mankiw, and Tyler himself.

Comments

[robertdfeinman]

Why do the libertarians always use fiscal arguments as a cover for their dislike of communal social services? They disregard the expressed preferences of the majority as seen by 70 years of increased spending on social programs supported by taxes. The public is clamoring for universal health care, and Tyler's only thought is to try to throw some class warfare into the mix to see if he can start a fight.

I just don't get their callousness and lack of empathy for people in need. It must be some sort of character deficiency, like color blindness.

The spending for social services is "locked in", but the continually rising (both in the absolute and as percentage of the federal budget) for militarism is beyond discussion.

We already have means testing for health care. If you have the means you get the health care. Even with Medicare if you want more than the minimum you have to buy medigap with your own funds. If you want non-approved treatment you have to pay. If you need expensive drugs you have to pay the donut hole and the copays (which can run up to thousands per year for some patented drugs). If you need long-term care you have to pay, Medicare doesn't cover it.

Do these people ever realize how amoral and heartless they sound?

[Bruce Wilder]

TC: "Advocates of health care reform tend to be . . . short on practical solutions for cost control."

TC: "Furthermore, inducing the wealthy to pay for their own health coverage would create pressures to lower costs."

Cost control is the critical issue, but Tyler doesn't propose anything, doesn't even offer a coherent criticism of any proposal.

All of his concern troll argumentation aside, what Tyler appears to be arguing for, is for lower tax rates. He's concerned that rising costs will push up Medicare/Medicaid spending, and therefore spending. But, he does not propose a credible way to contain costs. Instead, he proposes "means-testing" as a way of containing expenditures and taxes.

When it comes right down to the core issue, Tyler wants means-testing for the same reason advocates for the poor oppose it: because it is a way to underfund the program, and keep taxes lower.

We might as well privatize schools and highways and the Defense Department and Social Security, and really lower taxes. Oh, wait, Tyler, and his sponsor, Koch Industries, favor all of that, too.

In terms of the economics, transfers are transfers.

I would argue that we should use tax-financing for most health care expenditures. Collect 12% of so of U.S. GDP in some combination of taxes, and spend it on health care. It is an administratively efficient way to provide health insurance. What's not to love? And, there will be plenty of opportunity for the government to exercise monopsony power in controlling cost.

That's pretty short -- too short for a NYT op-ed, no doubt -- and so, by Tyler's dim light, I am short on "practical" proposals. Oh, well.

[Bruce Wilder]

rdf: "Why do the libertarians always use fiscal arguments as a cover for their dislike of communal social services?"

You know the answer. You've told me. Because, they are being paid to make the fiscal argument on behalf of very wealthy people, who do not want to pay taxes themselves, and who, even if they are not paying the taxes (as in the case of Social Security), do not want ordinary people empowered by government protection or programs.

[Bruce Wilder]

rdf: "It must be some sort of character deficiency, like color blindness."

Or, it's a career choice.

[robertdfeinman]

Charles's brother David either isn't quite as motivated by this or has decided to bolster his image a la Carnegie.

He is currently one of the backers of the PBS show "Nova" and then there is this:
"The New York State Theater will be named for David H. Koch in honor of his large donation." [$100 million]

Don't get me started on self-aggrandizing philanthropy...

[robertdfeinman]

On the other hand his foundation has contributed:

Citizens for a Sound Economy Foundation - $6,206,000
CATO - $4,043,240
GMU - $1,400,000
George Mason University Foundation, Inc.- $350,000

Well, you get the idea. (Full info, if you are interested:
Media Transparency

[Ryan]

I am a libertarian; I don't think a federal healthcare system would be a good allocation of tax revenues. I invite you all to come to my home (well the property management company's home) in Eugene Oregon, and tell me I am being paid to hold that view by the rich.

I see no valid reason to tax Oregonians to essentially subsidize Floridians. This is essntially a transfer of wealth from the not-rich to the not-rich, and by no means the progressive type of policy many on this board would advocate.

Keep my tax dollars in my state, where my elected officials decide what to do for it.

[anne]

"Furthermore, inducing the wealthy to pay for their own health coverage would create pressures to lower costs."

http://www.nytimes.com/2005/02/14/books/14bull.html?ex=1266123600&en=32440f7c34fc8b0e&ei=5090&partner=rssuserland

February 14, 2005

Between Truth and Lies, An Unprintable Ubiquity
By PETER EDIDIN

Harry G. Frankfurt, 76, is a moral philosopher of international reputation and a professor emeritus at Princeton. He is also the author of a book recently published by the Princeton University Press that is the first in the publishing house's distinguished history to carry a title most newspapers, including this one, would find unfit to print. The work is called "On Bull - - - - ."

The opening paragraph of the 67-page essay is a model of reason and composition, repeatedly disrupted by that single obscenity:

"One of the most salient features of our culture is that there is so much [bull]. Everyone knows this. Each of us contributes his share. But we tend to take the situation for granted. Most people are rather confident of their ability to recognize [bull] and to avoid being taken in by it. So the phenomenon has not aroused much deliberate concern, nor attracted much sustained inquiry."

The essay goes on to lament that lack of inquiry, despite the universality of the phenomenon. "Even the most basic and preliminary questions about [bull] remain, after all," Mr. Frankfurt writes, "not only unanswered but unasked."

The balance of the work tries, with the help of Wittgenstein, Pound, St. Augustine and the spy novelist Eric Ambler, among others, to ask some of the preliminary questions - to define the nature of a thing recognized by all but understood by none.

What is [bull], after all? Mr. Frankfurt points out it is neither fish nor fowl. Those who produce it certainly aren't honest, but neither are they liars, given that the liar and the honest man are linked in their common, if not identical, regard for the truth.

"It is impossible for someone to lie unless he thinks he knows the truth," Mr. Frankfurt writes. "A person who lies is thereby responding to the truth, and he is to that extent respectful of it."

The bull artist, on the other hand, cares nothing for truth or falsehood. The only thing that matters to him is "getting away with what he says," Mr. Frankfurt writes. An advertiser or a politician or talk show host given to [bull] "does not reject the authority of the truth, as the liar does, and oppose himself to it," he writes. "He pays no attention to it at all."

And this makes him, Mr. Frankfurt says, potentially more harmful than any liar, because any culture and he means this culture rife with [bull] is one in danger of rejecting "the possibility of knowing how things truly are." It follows that any form of political argument or intellectual analysis or commercial appeal is only as legitimate, and true, as it is persuasive. There is no other court of appeal.

The reader is left to imagine a culture in which institutions, leaders, events, ethics feel improvised and lacking in substance....

[anne]

Mark Thoma:

"I have more confidence than Tyler that a universal care system has the potential to lower costs."

http://krugman.blogs.nytimes.com/2008/03/28/runaway-health-care-costs-were-1/

March 28, 2008

Runaway Health Care Costs — We're #1!
By Paul Krugman

The latest Trustees' reports from Social Security and Medicare show, once again, that there is no such thing as Socialsecuritymedicareandmedicaid. Social Security, the subject of thousands of demands that we get "serious" and cut benefits, is doing relatively well. The real problem lies in health care costs.

I am, of course, a big proponent of health care reform. But is there any reason to think that reform would curb the growth of costs?

Well, I was browsing some of the charts at CMS, * and thought I'd share some information from Chart 2.1. This table shows health care spending as a percentage of GDP in some major countries, 35 years ago and recently:

[Chart] We're #1!

Everybody knows that the US spends much more on health care than anyone else, without getting better results. Everyone also knows that health spending has outpaced GDP growth everywhere, thanks to medical progress. What I didn't realize was just how clearly the evidence shows that the rising trend is steepest in the US. We have the biggest increase as well as the highest level. We're #1!

What this suggests is that a more integrated system wouldn't just achieve a one-time saving, but also flatten the upward trend. Among other things, this would help the long-run fiscal picture. Moral: stop bashing Social Security, start demanding health care reform.

* (Centers for Medicare & Medicaid Services) http://www.cms.hhs.gov/TheChartSeries/downloads/Chartbook_2007_pdf.pdf

[Bruce Wilder]

Ryan, please note, that Tyler, supposedly a libertarian, has proposed in this op-ed, nationalizing the Medicaid program, taking that program away from the States, which now administer it.

Not every libertarian proposal is bought and paid for by very rich knaves, only most libertarian proposals featured in the mass Media and advocated for by George Mason "economics professors".

[Ryan]

Noted.

[anne]

http://krugman.blogs.nytimes.com/2008/03/28/runaway-health-care-costs-were-1/

March 28, 2008

Runaway Health Care Costs — We're #1!
By Paul Krugman

Health Care Spending (Percentage of GDP) *

Year... 1970... 2004

US... 7.0... 15.3
Canada... 7.0... 9.9
Germany... 6.2... 10.6
UK... 4.5... 8.1

* http://www.cms.hhs.gov/TheChartSeries/downloads/Chartbook_2007_pdf.pdf

[justabrother]

When Obama is president we will means test your white asses out of medicare and medicaid. It should only go to the oppressed races. You owe us.

[anne]

Better:

http://krugman.blogs.nytimes.com/2008/03/28/runaway-health-care-costs-were-1/

March 28, 2008

Runaway Health Care Costs — We're #1!
By Paul Krugman

Health Care Spending (Percentage of GDP) *

US...

1970 7.0
2004 15.3

Canada...

1970 7.0
2004 9.9
Germany...

1970 6.2
2004 10.6

UK...

1970 4.5
2004 8.1

* http://www.cms.hhs.gov/TheChartSeries/downloads/Chartbook_2007_pdf.pdf

[Robert Waldmann]

Cowen writes "Targeted social benefits have been used successfully around the world. " but not for health care. In particular, making people pay even nominal amounts out of pocket has a huge effect on demand for pharmaceuticals .. especially statins. The cost savings from such incentives are likely to be huge and negative. see this by my colleague Vincenzo Atella et al
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=648009.

Cowen doubts that expanding the public share of health insurance would reduce costs. We have a test case medicare vs medicare advantage accounts. They cost, on average 12% more per patient (warning pdf http://www.cbo.gov/ftpdocs/79xx/doc7994/04-11-MedicareAdvantage.pdf) there were 8,386,625 enrollees in 1997 http://www.statehealthfacts.org/comparetable.jsp?ind=327&cat=6 out of a total of 44 million (warning pdf http://www.cms.hhs.gov/MedicareEnRpts/Downloads/HISMI07.pdf) my instacalculation suggests that the medicare budget coult be cut about 2.5% instantly by eliminating medicare advantage accounts.

The fact that the private sector can't compete with medicare without huge subsidies suggests huge savings are possible. In particular much larger savings of administrative costs are possible if fewer plans compete (simplifying billing).
Also very importantly, cheap programs which effectively motivate physicians to keep blood pressure, sugar and cholesterol under control for non elderly patients would be a huge money saver for medicare (and save a huge number of lives). Private insurers would only implement these programs from altruistic motives as the savings accrue to medicare. Someone should tell Barack Obama. Oh yeah I am referring to work by David Cutler et al.

Since the public sector is much more efficient than the private sector (these are hard data) it is not necessary to impose single payer. if the medicare administration is allowed to compete with private health insurance companies for the non elderly, it should drive them from the market. Such creative destruction would save a hundreds of billions a year.

Not the cure for what ails our economy by itself, but a lot more politically possible than means testing. That is, the probability of it happening is many times greater, although not large itself.

[anne]

Correcting:

http://krugman.blogs.nytimes.com/2008/03/28/runaway-health-care-costs-were-1/

March 28, 2008

Runaway Health Care Costs — We're #1!
By Paul Krugman

Health Care Spending (Percentage of GDP) *

US...

1970... 7.0
2004... 15.3

Canada...

1970... 7.0
2004... 9.9

Germany...

1970... 6.2
2004... 10.6

UK...

1970... 4.5
2004... 8.1

* http://www.cms.hhs.gov/TheChartSeries/downloads/Chartbook_2007_pdf.pdf

[anne]

Robert Waldmann:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=648009

April, 2005

Affordability of Medicines and Patients' Cost Reduction Behaviors: Empirical Evidence Based on SUR Estimates from Italy and the United Kingdom
By Vincenzo Atella, Peter R. Noyce, Ellen Schafheutle, & Karen Hassell

Abstract:

The aim of the paper is to shed some light on consumers' attitudes to adopting strategies to contain the cost of medication. Using micro-data from an ad hoc survey conducted in Italy and the UK, several hypotheses are tested regarding patients' decision-making behavior and how it is influenced by health status, socio-demographic characteristics and the novel concept of a self-rated affordability measure. Results show that there is a discernable tendency for both UK and Italian patients to use cost reducing strategies and that these strategies are strongly influenced by income and drug affordability problems. These are important findings in two countries, where the National Health System (NHS) should provide health care services that are accessible to all citizens in need, and provide interesting insights for policy makers in other countries, such as USA, where patients have to pay a large share of their drugs out-of–pocket.

[anne]

http://www.cbpp.org/5-13-08health.htm

May 13, 2008

Informing the Debate About Curbing Medicare Advantage Overpayments
By Edwin Park

1. Question: Do private plans cost more than it costs the regular Medicare program to cover the same beneficiaries?

Answer: The Medicare Payment Advisory Commission (MedPAC) — Congress' expert advisory body on Medicare payment policy — estimates that in 2008, private plans are paid 13 percent more, on average, than it would cost traditional Medicare to cover the same beneficiaries.[1] According to analysis by George Washington University researchers for the Commonwealth Fund, these overpayments are estimated to average approximately $1,000 for each beneficiary enrolled in a private plan.[2]

The private plans and the Administration have previously attempted to cast some doubt on these estimates, contending they may be inflated.[3] Such claims do not have merit. The Congressional Budget Office's director, Peter Orszag, has testified that "such claims are simply inaccurate."[4] MedPAC similarly dismissed such claims in its June 2007 report to Congress.[5]

Moreover, according to CBO, the overpayment per beneficiary is likely to rise in the future because enrollment growth in the private plans is concentrating in geographic areas with the highest overpayment rates.[6]

2. Question: How do Medicare Advantage overpayments affect Medicare's finances?

Answer: Last year, CBO estimated that setting payments to private plans at the same level it would cost traditional Medicare to serve the same beneficiaries would save $54 billion over five years (2008-2012) and $149 billion over ten years (2008-2017). These are the amounts by which the private plans are overpaid.[7] ...

[anne]

Robert Waldmann:

Also very importantly, cheap programs which effectively motivate physicians to keep blood pressure, sugar and cholesterol under control for non elderly patients would be a huge money saver for medicare (and save a huge number of lives). Private insurers would only implement these programs from altruistic motives as the savings accrue to medicare....

Since the public sector is much more efficient than the private sector (these are hard data) it is not necessary to impose single payer. if the medicare administration is allowed to compete with private health insurance companies for the non elderly, it should drive them from the market. Such creative destruction would save [hundreds] of billions a year....

[tens] of billions....

[Fred]

What motivates libertarian true-believers, as opposed to predators masquerading as libertarians and shills trying to earn a living, is one of the most important questions facing us today. We aren't going go get rid of the government, that's for sure. But we might well succeed in getting rid of all the checks and balances in the government. We're seeing the consquences of that in the financial sector, of course.

One thing to remember about predators is that they are indeed different from the rest of us. In particular, they have an insatiable hunger for more money and power. Game theory (much beloved of libertarians I might note) teaches that situations can occur in which those with a disproportionate desire for wealth will eventually accumulate a disproportionate amount of wealth, which can then be used to push through rule changes which bring about an increase the disproportion until eventually the disproportion is overwhelming and irreversible, and thus we slide only too easily from democracy to tyranny. Now tyranny is nothing new, of course, and indeed is the rule in history while democracy is the exception. But what is different today is that the old problem of "who then will guard the guards?" is on the verge of no longer applying, thanks to robotics. It is only a matter of time before all the pilots, sailors and soldiers are replaced by drones, and all the drones are commanded by computers, and all it takes is a few people in a command room to run the computers and order annihilation of anyone who dares to challenge the system.

That is, if we ever slip into tyranny, we may never be able to slip out again. Now maybe this won't affect me, since I don't plan to live more than another 50 years at most, and probably much less. But it ought to worry the younger generation, and yet that is where we see the most fervent worshippers of Saint Ayn. To prevent the development of tyranny, nothing is more important than to spread out the wealth and keep it spread out. When there are ten million millionaires, with none of them having more than ten million in net worth, tyranny is highly unlikely. The problem occurs when wealth concentrates in the hands of just a few hundred billionaries. Why is it that libertarians don't see this truth, which the founding fathers of the United States saw very clearly? Instead, they repeat the same old mantra over and over: "just take the meat axe to government regulation, let private enterprise rip, and everyone will live happily ever after!"

Libertarians don't seem deficient in brain size, so how can they possibly believe the rubbish they spout? My guess is we have to do some sort of Freudian analyis to uncover the reason. Early childhood identification of evil father and evil government, something like that. But really I don't know.

[Real Person from the Real World]

Just when the whole population is beginning to age and need health care we are being hit by the libertarians propaganda machines in "Oregon" complaining about paying for retirees in }Florida." You all know the big refrain: "Big government is wasteful and corrupt and will take YOUR tax money that you worked hard for and need, to pay for someone else who overate and smoked while you didn't." You can bet the libertarian complainer thinks he has a decent health care plan of his own and wants to keep it that way. He/she is taking no risks that a universal system could do as well or better, and it would help a fellow human being. Talking to these people is like talking to a brick wall as long as they have their access to their isolated and comfortable little world.

PK and others have commented time and again, we in the US spend more, with poorer health outcomes than anywhere else among the industrialized countries. Now some of the elites are getting hit with the housing and credit bubble and poor economy. If libertarians think government is so bad when it interferes with the lovely world of capitalism and hard hearted markets, then we, the other tax payers without health care, should NOT bail them out. Let 'em all go to the hot place.

[Jim Harrison]

Means testing is just a tactic to destroy the political base for Medicare. Once Medicare is identified as "charity" it can be starved of funds and destroyed.

Maybe Libertarianism is part of God's plan for solving the Malthusian crisis of the 21st Century.

[robertdfeinman]

One of the libertarian themes has to do with the role of government as mandated in the US constitution. The argument is that having a militia is explicitly stated while social programs are not. So, by extension, defending private property (by the police force, the courts and the military) is a proper rule of government.

I've adopted a new argument that not all the roles of government were laid out explicitly in the constitution, but the aims of the founders can be found in the declaration of independence and in this:
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America. [my emphasis]

If you don't recognize it, it's the preamble to the constitution and I think should lay to rest, once and for all, what the aspirations of the founders were.

Not every detail of implementation needed to be laid out in foundational documents.

[Lee A. Arnold]

Robert Waldmann, I don't understand something, and I know you know this stuff: Why is the growth rate in the United States not greater by a magnitude (or more) than the European social welfare countries? Because we are taught growth theory posits that specialization and the division of labor is the key to growth, and as Adam Smith said, the "division of labor is limited by the extent of the market." So therefore, a bigger land area and more people should put the United States far ahead of these other countries, every year.

Yet in reality, everybody's growth rates are in the same ballpark.

Why is that? Does elaborate social spending pick-up more transaction costs (both monetized and non-monetized) than regular economic theory leads us to believe? Are the smaller countries boosting themselves, while the U.S. is hobbling itself? Could nationalized healthcare increase general productivity?

[Michael Cain]

Cost control is the critical issue, but Tyler doesn't propose anything, doesn't even offer a coherent criticism of any proposal.

Indeed. Medicare health care costs at the levels bemoaned by the libertarians implies -- other things being equal -- that on the near order of 50% of GDP will be health care goods and services. I'm willing to take the side of the bet that says that won't happen.

[benamery21]

Michael Cain: Too right. I'd even give odds.

[Cowan recommends futilie solution that doesnt address real problem]

As other commenters have pointed out this will not solve anything in the long, or even medium, run. I also doubt that medical cost inflation and utilization increases will result in 50% of GDP spent on medical care. Something will give before that happens. Problem is, what will 'give.'

But as far as Cowan's solution goes, medical cost inflation will produce economically, and therefore politically, intolerable increases in insurance premiums for Medicare on the upper middle class and well to do. As the magnitude of the required contribution is adjusted downward toward political viability, the effect of the policy will fade into nothing relatively quickly. Only the very rich will remain exposed.

Cowan's suggestions that I have seen for solution to the cost/expenditure increase problem amount to wishful longing for unspecified market forces (either spontaneous or through uspecified very market friendly regulation acceptable to libertarians) that will make insurance/medical industry 'act better' and solve the problem. So, he has no solution for the real problem either.

[Ryan]

Ah yes, the one man libertarian machine in Oregon, who is skeptical of his state paying more into a healthcare system than it gets out of it, and prefers that management be handled on a more local level.

"You can bet the libertarian complainer thinks he has a decent health care plan of his own and wants to keep it that way."

Typical ad hominem nonsense and non sequitur. For the record, I don't even have a healthcare plan; I am, by most standards, poor. Moving on.

Please explain why transeferring money from Oregon to Florida is a sound use of resources, and why would an Oregonian support it? In backing Federal Healthcare, you must subscribe to some Pareto efficiency theory, what exactly does Oregon get in return?

"If libertarians think government is so bad when it interferes with the lovely world of capitalism and hard hearted markets, then we, the other tax payers without health care, should NOT bail them out. "

Make a panel of those for and agaist Corporate Welfare, and I am certain the against will be proportionally more Libertarian than any other creed. You are tilting at windmills.

[John V]

Ryan,

"Make a panel of those for and agaist Corporate Welfare, and I am certain the against will be proportionally more Libertarian than any other creed. You are tilting at windmills."

Excellent and obvious point...as obvious and sky is blue and the grass green. I kinda chuckled while rubbing my temple when I read that quote earlier this evening that you cited above. Sadly, I doubt it will stick...it never has before.

When you see assertions that are the direct inversion of the truth, there's little you can but point it out. Whether it's acknowledged is another matter.

[JeffF]

"what exactly does Oregon get in return?"

Oregonian retirees can move to Florida (or wherever) and still get Medicare, that's what they get.

Florida doesn't have more seniors than the rest of the country because people get old faster there or because it had a huge population 50 years ago, it has more because some people move to a warm sunny place after they retire. They take their Medicare with them.

I'm sure there are places within Oregon that have concentrations of retirees. You might just as well ask why Portland should transfer Medicare money to Ashland (just an educated guess based on Portland being the most expensive city in Oregon and thus likely somewhat lacking in retirees and Ashland being enriched in retirees).

[John V]

Lee,

"Because we are taught growth theory posits that specialization and the division of labor is the key to growth, and as Adam Smith said, the "division of labor is limited by the extent of the market."

You are saying this as if European countries are isolated little islands. The bulk of Western Europe has had a common market since the 50s and it's been growing and becoming more integrated over time ever since..not to mention globalizing.

Define "market" and you'll get the answer.

Besides, social spending in Europe has also seen some tightening and market-based reforms over the last 10-15 years...not to mention corporate tax cuts and more flexible labor markets.

[John V]

Lee,

And it's funny. How a propos, I just posted this blog entry a few hours ago.

[Ryan]

They take their Medicare, which the young get to pay for, to a state the young don't live.

[german_reader]

Perhaps of interest for American readers, here is a short publication from Eurostat which compares health care expenditures in Europe, Japan and the U.S between 2003 and 2005 .

http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-QA-08-026/EN/KS-QA-08-026-EN.PDF

One of the most significant differences is that the U.S. spends much more on private health care services than any other country.

While government health care expenditures in the U.S. ( 2302 euros per capita in 2005 ) are comparable to France ( 2336 euros ), Denmark ( 2805 euros ), Germany ( 2160 euros ), Switzerland ( 2744 euros ), Belgium ( 1972 euros ) or the Netherlands ( 1858 euros ), private health care expenditures ( 2753 euros ) exceed by far the private expenditures of any other country. Number two behind the U.S. is Switzerland with 1853 euros ( and the second most expensive health care system in the world ). Number three the Netherlands with 1004 euros. All other countries have private health care expenditures of 789 euros ( Belgium ) or less.

[Lee A. Arnold]

John V, What is the percentage of U.S. GDP in international trade compared with the percentage in European countries?

Meanwhile, the Journal op-ed article misrepresents the case, like many Journal op-eds. And as they intended, you have drawn the wrong lesson from it. Most of the European reforms are NOT ENDING social welfare programs, they are buttressing social welfare to make it stronger. The structure of the European social welfare states is strong cradle-to-grave coverage, with pro-market tax policies to SUPPORT it, not end it. This has been going on for decades. See for example Peter H. Lindert, Growing Public: Social Spending and Economic Growth Since the Eighteenth Century, volume 1 (2004)

[erewhon]

Cowan, a smart man, offers protection for the wealthy. My ancestors came to the US in the 19th century. Some changed their name and religion. They didn't worry about education, healthcare or infrastructure. Most were farmers in the old and new countries. They didn't worry about uneducated neighbors. There were many jobs for those who could not read or write. Our world is much different.

I am OK. My job cannot be outsourced. Few of my neighbors are white. If their children are not well educated, they will have major problems in the job market. Many will turn to crime. We lead the world in numbers of citizens in jail. This is not sustainable or morally valid. Don’t limit your attention to healthcare. Preventive care does not save money. People live longer and have other problems. As many people have pointed out, distributing free cigarettes to people saves money on healthcare. When we talk about choice, choice in smoking or not smoking, choice among diets, etc we assume that people are well educated. Most Americans are not well educated. Many have trouble multiplying by ten. Costa Rica has a better and far more cost effective health care system- forget about Europe, which also out does us.

Education is a strong predictor of health status. Better education for Americans would eventually improve the health of our population, but it may not save money. If you put efficiency first, then you condemn American education and healthcare to remain second-class, which it is today. If you put choice first, you are a propagandist. I speak as a medical educator.

[Ryan]

Choice, efficiency and information/education are all interrelated. What good is made of villainizing those that stress the importance of one in particular?

[Bruce Webb]

At the risk of beating my own drum I noticed this new mantra bubbling up a couple of weeks ago and responded with the following in my AB series last MondayXXXII: Means Testing as a Trojan Horse

When you see the same trope first popping up as a troll talking point, then in a letter to the editor (responded to in an op/ed) and now dutifully trotted out by a GMU guy you know the fix is in and the talking point has been issued.

Medicare Part A is paid for via a payroll tax that is currently uncappped, i.e. upper middle class people are already subsidizing care for the working class and middle class. Medicare Part B, C, D are paid for partially by beneficiary premiums but mostly by the General Fund where the taxes are mostly borne by you guessed it the upper middle class. These people are already paying much of the bill any attempt to deny them their own share of a service they have funded their entire working life is simply an attempt to undermine political support for Medicare and Social Security (because various mean testing schemes are floating around that as well).

Know this. The greatest fear of the GMU boys is that some large, universal government program will be shown to work as designed. Their greatest fear is that Social Security will be shown to be fully funded as currently configured because if it is shown to be such their whole 'Big Government is the Problem' argument shatters.

Back in May 2005 in the wake of the 'There is no Crisis' campaign a poster on DeLong asked in reference to Social Security "Why are they so insistent? What puzzles me is energy and persistence of this propaganda campaign with scant positive results." My response then is the same as it is now: its the ideology. The only thing these people hate more than social democratic proposals is social democratic solutions that work. It is why they try to tell you that getting medical care in France is some horrific nightmare, something that leaves Mark's French readers kind of baffled.

To rebeat my drum I put up a new post at AB yesterday called XXXIII: Medicare Finance. Its comment thread could use some informed input, if you get tired here please feel free to drop in.

[Real Person from the Real World]

Ryan, I have a couple of questions for you, if you are "poor" as you claim, with no health care, how old are you? What is your current health state?

When you don't need something, because you are young or have a blue chip coverage thru some company, it is easy to quibble about paying for someone else.

It's rare to find them, but there are some.... young people who had health problems but had coverage under their parents then find themselves at adulthood without thru no fault of their own, and they have had no chance to work long enough to pay for health care. They would not agree with you. Nor would some independent and healthy road warrior trying to amass his bootle on a 1099. As long as there were no major expenses, a write off just allow him to hang onto more of his hard earned hoard.

Oldsters who are strapped and have little chance to earn income (look at the 90 year old ladies giving out samples at Costco - is this really conscionable?) need health care just like the young guy who grew up in bad health.

Oh, and someone brought up a great point, that retirees move to Florida from Oregon WITH the medicare they had back in Oregon or wherever.

Health care should be a right we all should have equal access to.

[jean]

What are we going to do about the MILITARY entitlements? That is a bigger problem.

[jamzo]

"There’s one important idea lurking in the shadows that neither campaign is keen to talk about: paying out government benefits more efficiently"

"how about doing defense spending more efficiently"

"how about having a more efficient health insurance system"

"how about a more efficient electic power system"

"how about a more efficient public education system"

"how about a more efficient farm program"

i am sure others can add to the list of systems and programs where it might be more important to strive for efficiency

by the way

does tyler cowen really think he is fooling anyone by calling "means testing" an efficiency measure?

[John V]

Lee,

"Most of the European reforms are NOT ENDING social welfare programs

OK. But who said anything about "ENDING"? You talk about misrepresenting.

[ddt]

Ryan,

I think you would enjoy this book, and it will give you a good idea of where the rest of us are generally coming from on these issues. Also it's available for free on the net:

The Conservative Nanny State by Dean Baker
http://www.conservativenannystate.org/

[Bruce Wilder]

jamzo: "does tyler cowen really think he is fooling anyone by calling "means testing" an efficiency measure?"

Yes.

[Lafayette]

Article: The argument is often made that single-payer health care systems in Canada or Europe are cheaper than health care in the United States. But Medicare is already a single-payer plan, yet its costs are unsustainable.

Unsustainable compared to what? The 3 Trillion Dollar war in Iraq? Or the Total Defense Budget outlay in FY2008 of $607.3B; compared to, in 2005, Medicare coverage of 42.5 million people that spent $330 billion.

Three hundred and thirty billion dollars is a piddling amount for government sponsored health care, amounting to just a bit more than 3% of GDP.

The Federal Budget is a Policy Decision making mechanism. If Americans prefer to go to war, or spend it is obvious that Medicare expenditures will remain unsustainable.

[anne]

http://krugman.blogs.nytimes.com/2008/07/20/does-not-compute/

July 20, 2008

Does Not Compute
By Paul Krugman

A thought after reading Tyler Cowen’s latest: * the issue of health care economics seems to make libertarians act like robots on bad science-fiction TV shows. You know, the ones that, faced with information that doesn’t fit with the assumptions in their programming, say “Does not compute! Does not compute!” and collapse.

The basic facts on health care are clear: government-run insurance is more efficient than private insurance; more generally, the United States, with the most privatized health care in the advanced world, has a wildly inefficient system that costs far more than anyone else’s, yet delivers no better and arguably worse medical care than European systems.

But all of this runs so counter to libertarian assumptions about the superiority of individual choice and market mechanisms that they just can’t take it on board. So we have bald assertions ** that Europeans receive much less care than Americans, even though the data clearly show that it just ain’t so. And we have assertions that mean-testing Medicare is the answer to our problems.

I could say a lot more about this, but maybe the key point is this: we don’t have a Medicare crisis, we have a health care crisis. Private insurance is collapsing as we speak. Means-testing Medicare, aside from many other problems, would just push older Americans into a failing private system — a system that, by the way, has never worked for the elderly, for whom adverse selection issues are especially acute.

If we’re serious about controlling Medicare costs, Peter Orszag and his staff at CBO have had a lot to say about this. Means-testing isn’t the answer; setting priorities for care is.

* http://www.nytimes.com/2008/07/20/business/economy/20view.html

** http://www.nytimes.com/2007/03/22/business/22scene.html

*** http://content.healthaffairs.org/cgi/content/abstract/22/3/89

[anne]

Correcting:

But all of this runs so counter to libertarian assumptions about the superiority of individual choice and market mechanisms that they just can’t take it on board. So we have bald assertions ** that Europeans receive much less care than Americans, even though the data clearly show that it just ain’t so. *** And we have assertions that mean-testing Medicare is the answer to our problems....

** http://www.nytimes.com/2007/03/22/business/22scene.html

*** http://content.healthaffairs.org/cgi/content/abstract/22/3/89

[anne]

http://content.healthaffairs.org/cgi/content/abstract/22/3/89

2003

It’s The Prices, Stupid: Why The United States Is So Different From Other Countries
By Gerard F. Anderson, Uwe E. Reinhardt, Peter S. Hussey, and Varduhi Petrosyan

This paper uses the latest data from the Organization for Economic Cooperation and Development (OECD) to compare the health systems of the thirty member countries in 2000. Total health spending—the distribution of public and private health spending in the OECD countries—is presented and discussed. U.S. public spending as a percentage of GDP (5.8 percent) is virtually identical to public spending in the United Kingdom, Italy, and Japan (5.9 percent each) and not much smaller than in Canada (6.5 percent). The paper also compares pharmaceutical spending, health system capacity, and use of medical services. The data show that the United States spends more on health care than any other country. However, on most measures of health services use, the United States is below the OECD median. These facts suggest that the difference in spending is caused mostly by higher prices for health care goods and services in the United States.

[anne]

http://krugman.blogs.nytimes.com/2008/07/20/does-not-compute/

If we’re serious about controlling Medicare costs, Peter Orszag **** and his staff at CBO have had a lot to say about this. Means-testing isn’t the answer; setting priorities for care is.

**** http://cboblog.cbo.gov/?cat=5

The point is that there is simply money without end paying for libertarian deception, as for the sake of private health care insurers, and there is truly deception here. No surprise though, after all there was recently the defense of American mercenaries in Iraq by about Tyler Cowen. Privatise all, forevermore.

[John V]

Lafayette,

While I suspect that Tyler would call for an incredible slash in defense spending (as would I), that's not really the same thing. Defense is discretionary. In this article, Tyler is obviously concerned, as are most people who are looking, with the expected growth in non-discretionary spending...namely Medicare and Medicaid in this instance.

[anne]

"While I suspect that Tyler would call for an incredible slash in defense spending (as would I), that's not really the same thing. Defense is discretionary."

While much may be suspected, there is not the slightest evidence for the much that is suspected. The idea of Tyler Cowen (not simply "Tyler" - my pal, my buddy, my chum "Tyler") calling for an incredible slash in defense spending is utter fantasy.

[anne]

"Tyler is obviously concerned, as are most people who are looking, with the expected growth in non-discretionary spending...namely Medicare and Medicaid in this instance."

I am not the least concerned with the expected growth in spending on Medicare and Medicaid, rather I am concerned with the lack of spending.

I am concerned with a failure to spend a mere $7 billion a year to insure the health of 3.8 million needy children. But, I suppose I am not most people, or at least not most supposed libertarians who are sactually nothing of the sort.

Get it?

[John V]

Why, Anne?

I would seem like it matters too much that all non-liberals fit a neocon stereotype.

[Lee A. Arnold]

John V: "OK. But who said anything about "ENDING"? You talk about misrepresenting."

Don't be coy. Neither your blog entry, nor Olsen's op-ed, advocates strengthening U.S. social programs to the European extent -- after which, some examination of their so-called "market reforms" would be honest, pertinent and comparable.

So answer the question: What is the percentage of U.S. GDP in international trade compared with the percentage in European countries? After all, it is your contention that the total U.S. market is smaller than the European one. You put it out there, you answer it.

You continue in intellectual lassitude. You have yet to answer my repeated question from the other comment-thread, under Mark's entry, Peterson's One Billion Dollar Debt Crusade:

"Do I have to lay-out a complete plan for FUTURE universal healthcare before you will give us ONE clear and definite example of how you say the CURRENT system is suffering mostly from lack of market principles?"

Again, YOU brought it up. Are you going to answer this?

[anne]

John, by the way, I wholly wish you could be right but there will be no cutting defense spending in the coming Administration no matter the President. Barack Obama has made that clear.

A fair number of conservatives are truly conservative on domestic and international affairs, however, and I suspect, no matter the coming President, these more traditional conservatives will become more influential in the Republican Party. Remember that through the current Administration, Congressional conservatives have defined stances by wholly supporting the President.

Through the 6 years of a Republican Congress, the President had support enough to lead to only a single veto that I can recall, which was a veto of stem-cell research supporting legislation.

I seldom use the terms neo-liberal or neo-conservative, since I have trouble understanding what the terms represent.

[John V]

I'm not being coy, Lee. I made a simple observation.

As for the percentage difference, I don't know. Do you? If so, share it.

Hehehe, I really don't the confrontational style. I really don't.

it is your contention that the total U.S. market is smaller than the European one.

I made no such claim. I simply said that, since you referenced Smith, the real market is the one in which European markets operate...both within Europe and outside. Seems like a pretty simple and innocuous comment....and very true.

As for the other thread, I already said I'm letting it go for now.

[John V]

OK, Anne. That's fine. But we are talking about people's preferences and intent....namely Tyler in this case.

I see an awful lot of attacks on intent and motives...both on relevant topics in this thread as well as off topic comments on Defense Spending.....that distract from substantive discussion and are plainly unfair.

I seldom use the terms neo-liberal or neo-conservative, since I have trouble understanding what the terms represent.

OK. Fair enough. But in keeping that in mind, I see a lot of neo-conservative stereotype criticisms on anyone who is not a Modern American Liberal or a Social Democrat. Not being the latter does not make automatically make one the former.

Making arguments against conservatives to libertarians really doesn't do much. You are actually preaching to the choir in most cases....but it is not to meant that way. It's clearly meant as a critique to include conservatives as well and that's just wrong and unproductive.

[Lafayette]

JV: In this article, Tyler is obviously concerned, as are most people who are looking, with the expected growth in non-discretionary spending...namely Medicare and Medicaid in this instance.

I beg to differ. EVERYTHING in a Federal budget is discretionary. It is at the discretion of the PotUS, who must measure and balance Federal priorities.

Lead-head decided, by slight of hand, for instance, that he could offer $17M for a public campaign to Stop Obesity. But, at the same time, he proposed slashing $99M for state supported programs that actually address youth obesity with hands-on programs.

So, once again, our compassionately conservative lead-head of a PotUS, decided that cutting the budget on Health Care, whilst expanding it on Farm Subsidies (in order to lower the price of food, thereby promoting obesity) served best the American people.

Yeah, right. More asinine discretion is hard to come by.

And, I could go on -- but I wont.

[John V]

Lafayette,

I think you're twisting the issue at hand a bit. But hey...whatever.

[anne]

John, fair criticism. We always have to be careful to be precise in terms, and especially to be careful in generalizing.

[John V]

Anne,

Thanks. Lord knows I try myself.

[Bruce Wilder]

John V: "Why, Anne?"

Why, John V?

Why are libertarian arguments so often introduced as distraction by abstraction?

anne has done a beautiful job of cutting thru the crap: no one really "cares" about the abstract budget issues. Liberals want better health care and think we can get it at lower cost. Krugman, in the piece anne has quoted for us, summarizes brilliantly just how delusional Tyler is.

[John V]

Bruce,

Anne and I already hashed that out. And it had nothing to do with a particular issue. Done deal.

[Lee A. Arnold]

Now, John V, let's review -- you won't support what you write in response to my comments (your objection is that this is "confrontational,") and you twist the conditions of arguments so that you are not responsible for your comments although I am still responsible for mine.

So do believe that we should consider what you say, by your say-so?

Or perhaps you believe we SHOULDN'T consider what you say, or pay attention to you at all? --If so, then why do you write?

So now I have two questions for you on this thread:

The first question is: "What is the percentage of U.S. GDP in international trade compared with the percentage in European countries?" I am entitled to read your answer, because it speaks to your correction of me as "saying this as if European countries are isolated little islands" and that if I "define 'market'" I'll "get the answer."

And I in turn will save you some time, and jump to the second question: do you think that if U S. trade figures show that added-in it has a LARGER market extent than any of the others countries, it invalidates your direction to me that here I'll "get the answer?" Because surely, the U.S. should then have higher growth rates by a magnitude than the social welfare states, if Adam Smith is all there is to it.

You wrote it. Answer it. That's not confrontation. That's being responsible.

[John V]

Lee,

I answered those questions. Again, you read my words differently than I intend them.

That last answer left me quite confused.

[Lafayette]

JV: I think you're twisting the issue at hand a bit. But hey...whatever.

Thanks for noticing! Most people don't.

All's fair in love and blogs ...

[Lafayette]

JV: Why are libertarian arguments so often introduced as distraction by abstraction?

Because they are typically bereft of logic and play to base instincts?

Yeah, it must be that.

[Lee A. Arnold]

John V, I do read words differently: You write "answer" when you mean "evade."

[John V]

Lafayette,

I hope you realize I didn't say the quote in this comment about abstraction.

On your last comment, when you quote me saying:

"JV: Making arguments against conservatives to libertarians really doesn't do much ,

That had a specific meaning that had nothing to do with your comment that followed. If you look around, you will see specific policy discussions get forced into partisan smearing...as if that's supposed to matter or prove something.

In fact, post that that quote was part of was a response to Anne for this this comment. IOW, scolding libertarians for GOP policies that libertarians do not, in fact, support...perhaps less so than even most liberals...doesn't mean much to the discussion....particularly when those conservative or neo-conservative points are presented as being part of a libertarian agenda.

As Chait stated the other day when discussing Naomi Klein's incredibly sloppy thesis in the "Shock Doctrine":

"Klein calls the neocon movement "Friedmanite to the core," and identifies the Iraq war as a "careful and faithful application of unrestrained Chicago School ideology" over which Friedman presided. What she does not mention--not once, not anywhere, in her book--is that Friedman argued against the Iraq war from the beginning, calling it an act of "aggression." It ought to be morbidly embarrassing for a writer to discover that the central character of her narrative turns out to oppose what she identifies as the apotheosis of his own movement.

...Naomi Klein's relentless lumping together of all her ideological adversaries in the service of a monocausal theory of the world ultimately renders her analysis perfect nonsense."

This tactic is far from exclusive to Klein.

[robertdfeinman]

OK, here's how it works. A libertarian troll gets on to a topic having to do with economics or the constitution or some other area where reality differs from his ideology and then hijacks the conversation.

The points made are sufficiently outrageous, uninformed, provocative, or galling that others feel impelled to reply. Then the conversation becomes an argument with the troll and not the topic originally under discussion.

John V. is one such. He has appeared on several other sites using this and other screen names, but the results are always the same. He becomes the focal point.

Here's a simple measure, of the 69 comments so far in this thread he has made 13. I've not counted the number that have responded to him. By definition this is trollish behavior.

As the more rational of you know, you can't win an argument with a libertarian, they have saint Ayn on their side, so please control yourselves. As the motto goes: "don't feed the trolls".

Thank you...

[save_the_rustbelt]

My isn't this fun.

Since the mid 1960s decisions have been made based on a health care system designed in a certain way with certain parameters.

This includes many billions in capital budgeting decisions.

Whatever health care reform model we choose, pick one, will change the system and the decision parameters.

In plain English, whatever we do, the transition carries a risk of creating chaos, as the old assumptions are unwound.

Moral of the story, whatever we do, we need to think very carefully about the transition.

So far, planners, dreamers and schemers are giving very little attention to how we make the transition.

Could be a mess.

[Bruce Wilder]

It's almost as if we've been waiting until the progressive self-destruction of the deteriorating status quo has a higher expected chaos factor than a transition, however ill-executed.

I actually expect that various bad actors in health care will be on their very best behavior, in the hope that arresting the self-destructive spiral of the existing "system" -- particularly the runaway cost escalation that profits so many malefactors -- will discourage enthusiasm for reform.

And, of course, the sudden arrest of that runaway inflation will be a great mystery, and many will insist that it signals some profound technological change.

[Bruce Wilder]

The best "reform" would be an inadequate one, that accelerates the self-destruction of the health insurers.

[John V]

rdf,

classy. real classy.

[Icarus]

We've created a strawman on this blog, entitled the "libertarian argument". It's a charicature resting on a tragicomedic notion of neo-liberal excess. And, more importantly, it stifles any real debate and discussion.

This tactic of reductive dismissal in seen in many narratives, and is a path towards preventing real civilizational and dialectic dialogue.

The 'Right' have historically done this by reducing leftist thought to 'red' and 'communist', after having marketed those words to mean 'evil'.

The so called progressives seem to do the same. In this particular strain, any non re-distributionist logic is inherently bereft of logic, tantamount to absurd. Wow.

I've always thought that argument and dialogue work best when one takes the oppositions best argument, and not fight against a charicature of its worst. Real strength of position demands nothings less; and conversely, the creation of a strawman to scaffold all diatribes reflects a certain cowardice.

There are powerful arguments about privatizing sections of social intercourse. And, there are exceptions. This will no doubt be a great arena of battle in the coming years, as capital dis-embeds itself from nation states, and labor migration becomes quicker and quicker.

Which model works?...a difficult question, and I suspect there won't be 1 model for all societies.

But, stultifying conversation, not unlike right wing talk radio, are simply roadbumps on a hopeful path towards dialogue and debate.

[reason]

Good starting point for fact based discussion:
http://en.wikipedia.org/wiki/Economy_of_the_European_Union

The EU definitely imports/exports more than the (historically) relatively closed US economy. Most statistics are not easy to come by as statistics tend to be on a per country basis where exports WITHIN the EU are counted as exports.

[robertdfeinman]

Icarus:
I'm not aware whether Tyler Cowen is stuffed with straw or not, but he's the one who started the discussion.

It also appears that most of commentators on Krugman's blog rebuttal make the same points about libertarians as has happened here.

There are a few from you team as well, but as is always the case, they cite nothing to support their opinions.

Krugman's point, and that of many here as well, is that Cowen consistently ignores or distorts facts that undermine his ideology.

Why people resort to these sorts of distortions has been the subject of much speculation. There's even a whole book about it at TheAuthoritarians.com as well as Harry Frankfurt's more philosophical tome "On Bullshit".

I, personally, think that in Cowen's case his natural bent is fed by the nice living he gets from spewing half-baked ideas. That's probably why he is in the pay of the wealthy libertarian cabal in the first place.

Why you and your fellow travelers support a system from which you get no benefit still puzzles.

[Jrossi]

I agree with the general sentiment on this thread that means-testing Medicare is essentially callous and selfish and would quite possibly destroy it. Better ideas: Cover everyone--via a single-payer, or multiple-payers. The government is of course more efficient than the private sector in HC and so would probably drive out much of the private sector. I wouldn't shed a tear for the insurance companies. Incentivise doctors via the payment structure to provide more high-value services (eg, aggressive management of hypertension) and fewer low-value services (eg, ICU management of elderly cancer patients). Set up national medical guidelines on what will and what will not be covered.

[Icarus]

Robertfeinman...

I think the disconnect is that me, and my fellow travelers, perceive great benefit from a system which has market incentives.
You produce on the market, and based on your productivity, your rewards are measured. It's not done by govt decree and dispersal, but, instead, the impersonal and unlimited logic of the market.
You may end up homeless, as the system is merciless, and, you may end up a billionaire, as the ceiling is undefined. Some of us really like that...

[Lafayette]

Icky: It's not done by govt decree and dispersal, but, instead, the impersonal and unlimited logic of the market.

Said like a true ideologue.

The Market System, master of us all. We willing bend to its immutable law, the lowest equilibrium price at the highest profit possible. No moral nonsense, just the ineluctable and immutable law of the market.

Dismal nonsense. Back to your cave.

[BJ Feng]

Any system must mandate that EVERYONE buy insurance, as with auto insurance. The penalties for non-compliance must be harsh and enforcement unyielding. Base plans should have a minimum deductible of several thousand dollars, though people could pay for a plan with lower deductibles. This mandated insurance would likely cost a family at least a thousand dollars a year, this should be viewed as a tax, money paid to the government before all other expenses and no different from favored programs like Social Security. After all, someone has to pay.

The goal should be to

1)decouple health insurance from employment so that people do not have to rely on companies for health care and so they can keep their coverage between jobs.

2)guarantee that people will be able to buy coverage regardless of their current health status, or pre-existing conditions. Health care providers will have to offer a single rate for a health plan regardless of who that person is. Healthy, young people would likely see their premiums rise, perhaps substantially, while sick and old folks would likely see a decrease. This system is designed so that the young and healthy subsidize the sick and elderly, again, someone has to pay.

3)Whether by deductibles or co-pays, every use of the medical system must cost the user something to limit demand and costs to the overall system.

4)Some amount of the premium would be subsidized by the government for poor people through either tax credits, or having the government pay directly for the coverage, or a combination of both. It is essential that the definition of "poor" not be set too low, THE POOR MUST FACE A REDUCTION IN THEIR NON-HEALTH STANDARD OF LIVING, or else the costs to government would become too burdensome. Liberals always argue that overall standard of living will increase since health care is an important aspect of well being, that is how they justify the superiority of Europe anyway so they should have no problem accepting the above condition.

I could be wrong, but none of the current plans floating satisfy the above. I have no confidence that any of the plans floated by the Democratic candidates, especially Obama's, would reduce health care costs or even keep costs in the ballpark. SOMEONE has to pay. Under my proposals, the rich would pay substantially more as the poor would be subsidized. But everyone would have to pay something.

The fantasy that we can give everyone free, unlimited access without high costs is madness, and like RobertFeinman says, pure ideological BS bereft of logic and known facts. When you reduce the cost of a good, the amount demanded rises. Free health care would increase the amount of health care demanded by a huge margin. Some way to ration health care has to be part of any system, even mine might not do an adequate job. I expect the amount of health care services provided to increase under my proposals, though co-pays or deductibles would keep demand in check while providing coverage for catastrophic illnesses.

[Icarus]

Lafayette...

While I kind of admire your trust in the central govts to disperse goods/services, in the name of "morality"...I just don't agree with it. Central govts scare the shit out of me, and I'd rather have a system where they do as little as possible.

I know I know...this is where you bring up all sorts of statisitics about your France, as if it's the end-all of governing.
Let us also keep in mind that your France is a former imperialist state, which begrudgingly left its colonies, and still has a penchant for imagining itself as globally relevant. And, this is still a nation where immigrants torch cars, and the elderly can die in heatwaves.

There are alternative models...and the cold logic of the market may just be better for some people.

[Lafayette]

Your hero

Icky: While I kind of admire your trust in the central govts to disperse goods/services, in the name of "morality"..

Don't trust me, Icky, trust the Gini-curve. It is as implacable as your faith in the Market Solution to "do the right thing".

Have the courage to inform yourself regarding the Gini-coefficient. How it is constructed and take a look at its historical evolution (here, for instance).

Note that the historical evolution, since WW2, of America's coefficient has been one of Income Inequity -- the highest of any western nation. Note how the coefficient suddenly exacerbated around 1980. (Who was President? Reckless Ronny, the Trickle-Down Magician. Your hero.)

Thinkaboudid. Think about it.

Or, perhaps, in fact, you have no sense whatsoever of moral values? It's a bad virus that infects economic systems ... characterized by the subliminal suspension of ethical beliefs and typical of Affluent Societies. [The Victorians were also afflicted, obsessed by the riches obtainable from British colonies (Africa, India, China). Decolonization cured that particular outbreak.]

[anne]

http://www.pnhp.org/news/2008/july/meanstesting_medica.php

July 21, 2008

On Means-testing Medicare Benefits
By Don McCanne, MD

Everyone agrees that health care is now so expensive that those of modest means cannot be expected to contribute as much to the financing of health care as those who are more affluent. Traditionally, the Medicare program has been financed primarily through a common risk pool with contributions paid based on income levels. Now, instead of establishing equity through the revenue side of the balance sheet, efforts are being made to shift equity, or the appearance of equity, over to the benefit/expenditure side.

(For this discussion, revenues are considered to be Part A payroll taxes, and Part B general revenue taxes plus Part B premiums; supplemental premiums, deductibles and coinsurance are considered to be adjustments to the benefits.)

The Medicare Modernization Act, which established the Party D drug benefit, was an effort not only to privatize Medicare but to shift more of the responsibility of paying for care to the individual beneficiaries. The first step towards shifting the funding to the benefit side was the establishment of a means-tested premium for the Part D program. Those with higher incomes pay larger premiums. What could be wrong with that?

Professor Cowen doesn’t really hide the potential impact of means-tested benefits, including means-tested premiums and cost sharing. He suggests that those of limited means (now the majority) should be placed in a Medicaid-like welfare program, while the wealthy pay for more of their care with private funds. This is an explicit endorsement of two-tiered health care: the finest care money can buy for the wealthy, and under-funded mediocre care for the rest of us.

Professor Cowen states, “This policy reflects an ethic of individual responsibility.” That is precisely the problem. It rejects the concept of social solidarity: the glue that holds together the people of all other societies that have universal, comprehensive health care systems.

Financing health care through revenues paid into a single, universal risk pool establishes equity by using progressive tax policies, while providing broad political support for a program from which we would all benefit equally. Providing benefit levels inversely related to life-time income might create the appearance of equity, but, in fact, it destroys equity by forcing many of us into a welfare program, impairing access to the health care that we need.

Instead of means-testing our people, maybe we need to start mean-testing the economists and reject those who really are mean.

[anne]

http://krugman.blogs.nytimes.com/2008/02/02/healthcare-numbers/

February 2, 2008

Healthcare Numbers
By Paul Krugman

Jonathan Gruber, one of the country's leading health care economists — and someone not affiliated with any of the campaigns — has a new paper * on covering the uninsured. He makes use of a detailed simulation model that he's been developing for several years to assess alternative strategies.

One conclusion is that trying to cover the uninsured with tax credits, Bush-style, is — surprise, surprise — a very inefficient strategy: lots of revenue loss, while most of the people who get the benefits would have been insured anyway.

But the big conclusion, relevant to current debates, is on the role of mandates. Gruber compares a program of mandate-less subsidies to help people pay for insurance — broadly similar to the Obama plan — with a program that combines subsidies with mandates — broadly similar to the Edwards and Clinton plans.

The table below summarizes the key results. The mandate-less plan covers only about half the uninsured. The plan with mandates gets almost everyone, at an additional cost of $22 billion — about $1,000 per additional person covered.

Next time you hear someone telling you that the dispute over mandates is unimportant, remember this table:

Without Mandate With Mandate

Reduction in number of uninsured
23 million 45 million

Total cost
$102 billion $124 billion

Cost per newly insured
$4,400 $2,700

Yes, mandates matter.

* http://www.nber.org/papers/w13758

[Lafayette]

Krugman: It rejects the concept of social solidarity: the glue that holds together the people of all other societies that have universal, comprehensive health care systems.

Careful, Mr. Krugman. With this kind of talk, you are liable to be labeled as a filthy, pinko communist fellow-traveler who should be shipped back to ... France! ;^)

With remarks like the above, don't you fear for your life? They are so un-american ...

[Patricia Shannon]

Ryan says...

Ah yes, the one man libertarian machine in Oregon, who is skeptical of his state paying more into a healthcare system than it gets out of it, and prefers that management be handled on a more local level.

"You can bet the libertarian complainer thinks he has a decent health care plan of his own and wants to keep it that way."

Typical ad hominem nonsense and non sequitur. For the record, I don't even have a healthcare plan; I am, by most standards, poor. Moving on.

Please explain why transeferring money from Oregon to Florida is a sound use of resources, and why would an Oregonian support it? In backing Federal Healthcare, you must subscribe to some Pareto efficiency theory, what exactly does Oregon get in return?

"If libertarians think government is so bad when it interferes with the lovely world of capitalism and hard hearted markets, then we, the other tax payers without health care, should NOT bail them out. "

Make a panel of those for and agaist Corporate Welfare, and I am certain the against will be proportionally more Libertarian than any other creed. You are tilting at windmills.

Do you think that the rest of the U.S. should help Oregon if
(a) it is devastated by an earthquake or other natural disaster
(b) it is overrun by organized crime
(c) it is hit by a serious epidemic
?

Why?

[Lafayette]

Libertarian myopia

ryan: In backing Federal Healthcare, you must subscribe to some Pareto efficiency theory, what exactly does Oregon get in return?

Nothing quite so exotic. Just the simple notion that the collective is more important than the individual (state).

When Oregon is overrun by al Qaida terrorists, do let us know if you think the National Guard should intervene?

The same answer applies when we think that Oregon citizens should have a world class Health Care service, funded by Federal investments, even if it costs per capita more than the average due to lower population density.