holes in the safety net

Jonathan Cohn wades into the Baucus framework [pdf] released today and notices that families making between 300% and 400% above the poverty line ($66,000 to $88,000 for a family of four) would get stuck with pretty hefty costs on the private market:

Imagine you’re the head of a family of four, with two adults, making an income of $70,000. And since you don’t get insurance from your employer, you have to buy it on your own. If Baucus had his way, you could buy coverage through the exchange. And you’d have to spend no more than 13 percent of your gross income–or around $9,000–on your insurance premiums. But your insurance wouldn’t cover everything. There’d be deductibles, co-payments, and so on. If you bought the minimum level plan, you’d be on the hook for as much as $12,000 in out-of-pocket expenses–a level you could hit pretty easily if you had a seirous illness or injury. Add it all up, and you could be paying as much as $21,000–a third of your income–on medical expenses.  I believe the appropriate reaction is “oy.”

Ezra Klein meanwhile, first summarizes and then tepidly endorses the proposed framework:

The early reaction to Baucus’s bill has been overly negative. It’s an imperfect improvement to the current system, but an improvement nevertheless. Where it really falls short — even in comparison to the rudimentary framework released by HELP and especially when compared to the more complete package offered by the House — is in imagining a system that is different and better and fairer than our own, and working to make it a reality. Baucus talks often of building a “uniquely American” system, but this proposal largely plugs some holes in the one we already have. As such, the failure is not so much in the bill as in its unwillingness to lay the groundwork for the bills that may need to succeed it.

I have only skimmed the Baucus proposal, so I’ll go off of Klein’s summary for now.  From what I can tell it offers up a few good reforms that really will help cover more of the uninsured, but does very little to contain costs or to make insurance more portable or costs more transparent.  It does almost nothing to untangle us from the status quo (one of the main reasons I like Wyden-Bennett as an alternative).  It doesn’t do enough to make health insurance national – not nationalized, but part of a national market – and while in 2015 insurance companies would be allowed to sell across state lines, they would only need to follow the regulations of the state where the “compact” is formed, something many people have worried will look similar to the credit card industry.  Even the exchanges set up under this plan would be state-by-state, which makes almost no sense at all.

The plan expands Medicaid, offers cost sharing and tax credits to low-income individuals and families, and establishes state health care co-ops that can band together to offer more competitive prices.

It’s not all bad, but there is plenty to be worried about – and I’ve only linked so far to liberals critiquing this plan.  I’ll read it over more carefully, but at the moment it looks pretty motley – short on imagination, not comprehensive, and quite possibly far, far more expensive than it’s worth.  Sure, the pricetag is only $900 billion rather than $1.1 trillion – but if it doesn’t do a good job, what’s the point?

Okay – more on this later.  For now, I’ve got mixed feelings, but mostly I feel very dubious.

Also – Reihan Salam breaks down the proposal very nicely – and isn’t too pleased.  In other words, what we’re likely to see is something very like this bill pass, because no policy types on the right or left like it at all.  The worst of all worlds!  And to think, Salam and Klein both like Wyden-Bennett!

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34 thoughts on “holes in the safety net

  1. This is the fundamental problem with any given plan: someone will take it in the shorts.

    People love the idea of helping the less fortunate. They love it… until they find out that they, themselves, will take it in the shorts.

    “Surely there must be a way to keep everything the status quo for me and still help the less fortunate” is a thought that they will entertain for one, maybe two, bills from Congress. After that point, the thought will evolve/devolve into “I sure as hell don’t want to take it in the shorts.”

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  2. One small correction to the Cohn statement and he’s got just about right — look closely near (well, at) the end:

    Imagine you’re the head of a family of four, with two adults, making an income of $70,000. And since you don’t get insurance from your employer, you have to buy it on your own. If Baucus had his way, you could buy coverage through the exchange. And you’d have to spend no more than 13 percent of your gross income–or around $9,000–on your insurance premiums. But your insurance wouldn’t cover everything. There’d be deductibles, co-payments, and so on. If you bought the minimum level plan, you’d be on the hook for as much as $12,000 in out-of-pocket expenses–a level you could hit pretty easily if you had a seirous illness or injury. Add it all up, and you could be paying as much as $21,000–a third of your income–on medical expenses. I believe the appropriate reaction is, “And?”

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  3. …the pricetag is only $900 billion rather than $1.1 trillion… – edk

    FWIW – The cost is my line in the sand. Nobody knows what it will really cost to the level of pretended precision represented by the estimated difference in these two plans (20-30%). The most likely scenario is that either plan will cost 2x – 3x what is being represented by its supporters, as has every health care entitlement from medicare to the prescription drug benefit.

    I support Wyden-Bennett because it at least tries to be deficit neutral. That should be considered a “table stakes” criteria for any reform. Given where we are now with health care, if you cannot identify and eliminate the costs needed to pay for the reform, it is not reform – by definition. Even if they turn out to be wrong about Wyden Bennett, the damage will not be as great, because of the starting point.

    As far as I am concerned, anything with a starting point price tag like this has to be stopped by any means necessary. I’d like it to be stopped for rational reasons. But if Glenn Beck and his ilk can stop it by calling the supporters godless, communist, grandma killers – I’m good with that.

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  4. “From what I can tell it offers up a few good reforms that really will help cover more of the uninsured, but does very little to contain costs or to make insurance more portable or costs more transparent.”
    Which is why those fiscal conservative a**hats (both Reps and Dems) should have supported the Public Option which at least had the promise of bringing down costs. But the ones with power weren’t actually interested in a good bill or cutting costs, but in protecting their campaign contributions.

    “As far as I am concerned, anything with a starting point price tag like this has to be stopped by any means necessary.”
    Even if, ya know, the costs are worth it? Social Security, Medicare and our glorious war machine all cost more over the next 10 years. Should we stop those programs by any means necessary and let our grandparents die and maybe the rest of us since we wont have an armed forces?

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        • Gee, thanks.

          I’ll remember that when I lose patience the next time I read something like “libertarians don’t support X so they support their grandma’s dying”.

          You’d think a blog with as intelligent a readership this one has (myself excluded) would not be bothered with this kind of horseshit but I guess I’m wrong.

          Oh well.

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          • Here’s the problem:
            Liberals and conservatives in the mainstream debate are usually focused on moving the ball 10 yards in either direction. Libertarianism is by definition a more extreme alternative. The state is an impediment to freedom it must small and weak in order to protect individual liberty.

            So lets take Medicare for an example. As a society we’ve decided providing health care to the elderly is a moral obligation of society and we provide that care through the government. Medicare doesn’t fit in with the libertarian ideology.

            So if libertarians were swept into power wouldn’t they get rid of Medicare? If they got rid of Medicare, how would they get Grandma her pills without involving state resources?

            See the problem?

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      • Yes, of course the libertarian position is to sacrifice old people and the rest of us just so we can be free of government — duh! I thought everyone knew this. Are you people real, or is this a gag set-up? And Friedersdorf, Frum, Brooks and others say the conservative base is loony and illogical? They don’t hold a candle to these guys.

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        • To be fair, I’m not actually accusing libertarians of wanting to kill grandma. I’m accusing libertarians of wanting to end Social Security and Medicare. Is that false?

          Note: I’m also going to accuse libertarians of being exceptionally thin-skinned. You people cannot take any criticism at all without flying off the handle.

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          • There are two kinds of criticism here…

            Criticism based on stuff that libertarians actually believe.
            Criticism based on stuff that you believe that libertarians actually believe with a healthy assumption of stuff you believe spackled in there.

            For example: “Even if, ya know, the costs are worth it? Social Security, Medicare and our glorious war machine all cost more over the next 10 years. Should we stop those programs by any means necessary and let our grandparents die and maybe the rest of us since we wont have an armed forces?”

            For my part, I don’t, FOR A SECOND, believe that the “rest of us” would die if we did not have an armed forces. I do not, FOR A SECOND, believe that terrorists, or Russians, or Mexicans, or undefined people-of-pigment, will descend on us the second we drop a standing army. No, not even for a moment.

            So when someone says “you’d be okay with getting rid of the armed forces” and I shrug, and then they wave and say “YOU WANT ALL OF US TO DIE???”, they are then running from the thing that I believe (get rid of the standing army) and running to the thing that they believe (terrorists will kill “the rest of us”).

            Most libertarians have no problem with being criticized for stuff that they believe (“I can’t believe that you support gay marriage”) but when the criticism moves from there to the libertarian being criticized for what the criticizer actually believes (“I can’t believe you want society to crumble into dust and return us to the stone age!!!!”) that the libertarians get all “what the fuck?”

            Which is, in turn, interpreted as being “thin-skinned”.

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            • We all get accused of wanting things we don’t want because our interlocutors project their own ideas onto us. I have been accused of wanting the terrorists to win and of wanting to ruin marriage and of God knows what else. Correct me if I’m wrong, but I don’t think I’ve ever resorted to the kind of hostility I regularly get from libertarians on, say, tax issues (I have been told on several occasions to “keep your hands off my f***ing money” by many a libertarian, as if I am personally coming to their house to take it). That’s what I mean by “thin-skinned”.

              (Obviously, anecdote is the not the singular of data. You, Jaybird, are generally a pretty genial guy.)

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              • Personally, I see “crocodile tears” as an accusation of insincerity on the part of the other person… and, as such, it’s hostile in the absence of an obvious display of insincerity. On top of that, I see telling people that their opinions aren’t welcome is exceptionally hostile.

                As a libertarian, however, I’m sensitive to certain things that other folks don’t even notice. (And vice-versa, I’m sure.)

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                • Next time I see a libertarian say “I want to see Obama and the Democrats succeed in their agenda, and here’s how they can do it”, I will be more than happy to take the advice they’re offering to Obama as sincere. Until then, telling Democrats that they should abandon their agenda if they want to win elections will be taken as the oddly self-serving “advice” it is.

                  This is distinct from just opposing the Democrats. Feel free to do that. But let’s not pretend you’re on their side.

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                  • Next time you see a libertarian say “I want to see Obama and the Democrats succeed in their agenda, and here’s how they can do it”, you should have klaxons going off in your head.

                    Put one hand on your wallet and your other hand on your gun because someone is hoping your guard will go down long enough to rip you off.

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                    • This is my point. If you want to oppose, then please do so. But don’t go on about how Obama should do this or that to preserve his electoral strength or keep independents on his side or please rural Democrats or whatever. Because you don’t honestly care if he does any of that. Obama’s electoral viability is not a subject that matters a whit to you; your preferred policy goals are.

                      Correct me if any of that is wrong.

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                    • Eh. I can watch a football game dispassionately when I don’t care which side wins.

                      I can watch Obama do his thing dispassionately enough to say “he’s going to mess up if he keeps doing that”… like I did when Bush was in charge and, believe it or not, I said the same thing.

                      And now I hear you say the things about how unhelpful I am and I hear the echoes of the Republicans in your accusations. I’m sure you feel that it’s different when you do it.

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      • Well, insofar as more competition leads to lower costs (which is what we’re always told around these parts), it would have to. Give it Medicare bargaining rates and you get even more bang for your buck.

        Cost control and the public option are not the *same* thing, and there are plenty of other ways to control costs, but the public option would almost certainly lead to lower costs than we’ll get without one.

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        • What Ryan said.

          Also the Public Option can provide insurance without the need to worry about profits.

          But most of the cost saving measures would only really be effective if the Public Option grew into a single payer system which could bargain with all the doctors and drug companies, and provide a single standard method for reimbursement.

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