What's Wrong With Hillarycare
From the September Reason, Ron Bailey has a great piece on all the economic ridiculousness of it. I've blogged it before, but people seem to forget the nuts and bolts of why it's so awful, so I'm doing a rare rerun. Bailey writes:
At the center of Sen. Clinton's plan is a requirement that every American get and keep a health insurance policy. The good news is that such an individual mandate could be the cornerstone for a thorough-going reform of health care into a private consumer-driven system. The bad news is this is not the direction that Sen. Clinton's plan takes. The senator is right when she declares, "Part of our health care system is the best in the world, and we should build on it; part of the system is broken, and we should fix it." Sadly, she's misdiagnosed what part is broken and what part is best.The chief broken part of health insurance in the United States is the faltering system of employer-based health insurance. Since 2000, firms offering their employees health insurance have dropped from 69 percent to 60 percent. Clinton's plan maintains the employer-based insurance system by mandating that large employers continue to buy health insurance for their workers.
As Harvard business school professor Regina Herzlinger notes, such a mandate is indistinguishable from a payroll tax. Currently, the big companies that don't offer health insurance to their employees tend to be retailers and banks. Herzlinger points out that if they are required to pay an additional $5,000 for health insurance for a clerk earning $22,000, the companies will immediately start substituting capital for labor. In other words, economically vulnerable clerks would be fired and replaced by automated systems or by offshore workers. Instead of just lacking health insurance they would now be out of a job.
Sen. Clinton's plan would also allow Americans to purchase their health insurance through the Federal Employee Health Benefit Program (FEHBP) or through another government program modeled on Medicare. "Under Clinton's plan if you're uninsured you're going to go to one store, the Federal Employee Health Benefit Program," says Herzlinger. The problem, as Herzlinger sees it, is that this one store offers products designed by federal bureaucrats. She likens FEHBP insurance policies to going to buy a car and finding that only two-door subcompacts by various manufacturers are available. The cars offer different colors and hubcaps, but they are all two-door subcompacts. In other words, there is little consumer choice. The situation is even worse for the Medicare option.
Stretching the car analogy a bit further, Sen. Clinton compares her health care plan to the mandate that all drivers carry car insurance. But it's a bad comparison. Employers don't buy their workers' car insurance or home insurance. Why should they buy their employees health insurance? When someone leaves his or her job, they don't have to change or lose their car insurance. It's portable. A modern health insurance system would really make insurance the personal responsibility of each American.
Another worrying feature of Sen. Clinton's health insurance plan is that she would mandate "fair prices" for pharmaceuticals. This implies the imposition of limits on drug company profits. It is true that the drug companies have given themselves a black eye by abusing the patent system in some cases to prevent competition and keep prices temporarily high. That should be stopped. However, imposing price controls on drugs would dramatically slow the development of new and more effective drugs which is certainly not in the best interests of patients.
In addition, the outline of Sen. Clinton's plan is decorated with a number of vague promises such as reducing costs by stressing prevention and a focus on efficiency and modernization, asking providers to work collaboratively with patients and businesses to deliver high-quality, affordable care, and reducing wasteful health spending. Who could be against any of those good things? Clinton says that the $110 billion needed to pay for her plan would come from raising taxes on people with incomes over $250,000 and from $56 billion in costs savings. "Claiming that she can save $56 billion through the marvelous efficiency of the U.S. government is just absurd," retorts Herzlinger.
I'm especially against workplace-offered healthcare, which discriminates against the growing number of self-employed like me, whose healthcare dollars get taxed first. And then there are barren bitches like me, too, and men who don't have kids. If your workplace offers subsidized healthcare, and you're an unmarried, childless employee, you're subsidizing the guy with a wife and five children.
Let's just say no to socialism, 'kay? We've seen that it doesn't work -- well, except, maybe, for all the people sucking free or subsidized off the hog.
If your workplace offers subsidized healthcare, and you're an unmarried, childless employee, you're subsidizing the guy with a wife and five children
Amy, I don't see how. Here's a breakdown of the insurance plan my company offers:
Employee only: Base plan $48.00/month, Premium plan $82/month
Employee & Child: Base plan $84/month, Premium plan $142/month
Employee & Spouse: Base plan $88/month, Premium plan $164/month
Family: Base plan $138/month, Premium plan $234/month
Included in these plans are medical, dental, and vision, with an office visit copay of $15/visit medical, and $5/visit dental for the base plans.
So my earlier post of ~$60/month was a little off, but I was going by last year's pay stubs. This year it went up by $24 for me and my girls. If I were to put BF on my insurance, I'd be paying considerably more.
In addition, my company covers %100 of our life insurance coverage, and 100% of short and long term disability insurance. I don't contribute to a Flexible Spending Account, but I do contribute to my 401(k) on a monthly basis. I don't know how other companies do their coverages, but I think we're pretty typical for a biotech company. YMMV
Flynne
at February 29, 2008 9:12 AM
As Flynne illustrates above, premiums are higher when more people are added to the coverage. I don't see how this means that single employees are subsidizing families.
deja pseu at February 29, 2008 9:49 AM
First off, those employee premium contributions are the tip of the iceberg. Your employer is paying much more than $48/ month for each employee. That extra subsidy multiplies with each additional insured.
Second off, notice how the employee contribution stops increasing at the family level. Married with one kid or married with 5, same price. So where's the incentive to spawn rationaly?
The good news for the employers is that they are getting something for that investment: retention. The further you get from being able to actually fund your own family's health care, the more you need that damn job.
smurfy
at February 29, 2008 10:22 AM
Yeah, you're right Smurfy, I didn't look at it that way. But wouldn't my employer get the best bargain from the insurance company based on how many hires, and then calculate the difference between how many singles, and how many married/with children/without children? I mean, the premiums I pay are for me and both of my daughters, but we fall under "Employee & child" not "Family", so I'm not paying the big premium. But if I were to add my BF into the mix, then I would be. He's got his own insurance, through his employer, and I believe his daughter is still on it because she's still in school.
Flynne
at February 29, 2008 10:32 AM
As a leach on the public dole (school teacher) I pay zero in my district, for full medical, dental and vision. The cost goes up to $650/month for a family. My wife and kids get vision on my policy and we pay $220/month, for the same coverage as I get, through a private provider. My paycheck lists the district contribution as a total of $640/month. I look at it as a right thing, I, the employee am insured, but if I want to add more people, I subsidize the district, or do the research and find a better solution. Btw, there is a step of Employee, Spouse and 1 child, then the whole family price kicks in.
Piper
at February 29, 2008 11:07 AM
Kids are actually dirt cheap to insure. Kids get an ear infection and need amoxicillin. They don't go in an get told "oh, whoops. Time for a triple bi pass!" or fall and need a new hip. An x-ray, cast and then no bike riding for a few months. Older folks are the least healthy. And for good reason - we're not necessarily built to last 100 years and be in great shape the whole time.
The most expensive people in our health care systems are also the ones who probably contribute the least...I, a single childless person am subsidizing your elderly parents, too, and more so than (for example!) Flynne's girls (if she's got Blue Cross).
Gretchen
at February 29, 2008 11:42 AM
...both my dad's parents had hip replacement surgery. They've been incredibly unhealthy and plagued with problems over the past 10-15 years or so, since they hit 70. They're constantly getting expensive procedures done.
Should we not keep old people alive? ...clearly that isn't what I'm suggesting. Just pointing out that as retired people on a small, fixed income the state is paying for a lot of their nursing home and medical expenses (my dad can't pay those bills - and should it work that way, anyway?). I guarantee that my grandparents' care costs more, for one day, than a child's entire year of health care needs.
Gretchen
at February 29, 2008 11:48 AM
Last post for a while, sorry...they DID save a great deal of money. Around $400,000 in the bank for retirement. This seemed like enough to live off of, in addition to their pensions and SS b/c they're so frugal and had their mortgage paid off. And it's all gone. They also didn't put the house in a trust and that, too, will soon be gone. That's what the assets were for - to keep them going, but WOW, is it expensive.
And no, universal health care is NOT the answer.
Gretchen
at February 29, 2008 11:51 AM
Warning! Read only in case of excessive boredom.
The system will go down in this generation of sick & fat McDumbasses regardless - because they keep buying cheap food and the rest of the money goes toward the expensive pharmaceuticals for the "cure". The fast food and pharma industries might as well team up to maximize profits by offering pills with a value meal. We'll soon be seeing coupons for a discount on gastro-bypass surgery in the greasy bag of crap, just in time for those with will power the size of a mcnugget.
kbling
at February 29, 2008 1:56 PM
Employer-provided health care could be banned. Then, each employee gets paid more and can choose an individual health plan. I'd choose one that covers really bad and/or chronic stuff, and pay for the rest myself.
JohnAnnArbor at February 29, 2008 4:38 PM
This might be repetitive, but I say again: "Time for the Medical VISA card!"
You get one of your own when you turn 18, and/or maybe when you register for Selective Service. It gets used for doctor's offices and OTC medication as identified by SKU. When you show any clinic you have one, you can get treatment. You can make payments. You can get your wages garnished if you don't make them. You - nobody else - dicker with the doctor to see what treatment is necessary.
No insurance is mandatory. No list of doctors is mandated by the plan (Hillarycare actually proposed criminal penalties to keep people on the list of doctors specified by Hillarycare). Best of all, you pay. Not some "other people" scammed or taxed out of their earnings.
Radwaste at February 29, 2008 6:06 PM
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