Leavitt in the WSJ -- "Health 'Reform' Is Income Redistribution"

mkrishnan

Moderator emeritus
Original poster
Jan 9, 2004
29,641
12
Grand Rapids, MI, USA
The WSJ is really establishing itself as not caring about public welfare in the healthcare arena... (This is from today's opinion)

MICHAEL O. LEAVITT said:
While many Americans are upset by ObamaCare’s $1 trillion price tag, Congress is contemplating other changes with little analysis or debate. These changes would create a massively unfair form of income redistribution and create incentives for many not to buy health insurance at all.

Let's start with basics: Insurance protects against the risk of something bad happening. When your house is on fire you no longer need protection against risk. You need a fireman and cash to rebuild your home. But suppose the government requires insurers to sell you fire "insurance" while your house is on fire and says you can pay the same premium as people whose houses are not on fire. The result would be that few homeowners would buy insurance until their houses were on fire.

The same could happen under health insurance reform. Here's how: President Obama proposes to require insurers to sell policies to everyone no matter what their health status. By itself this requirement, called "guaranteed issue," would just mean that insurers would charge predictably sick people the extremely high insurance premiums that reflect their future expected costs. But if Congress adds another requirement, called "community rating," insurers' ability to charge higher premiums for higher risks will be sharply limited.

Thus a healthy 25-year-old and a 55-year-old with cancer would pay nearly the same premium for a health policy. Mr. Obama and his allies emphasize the benefits for the 55-year old. But the 25-year-old, who may also have a lower income, would pay significantly more than needed to cover his expected costs.

Like the homeowner who waits until his house is on fire to buy insurance, younger, poorer, healthier workers will rationally choose to avoid paying high premiums now to subsidize insurance for someone else. After all, they can always get a policy if they get sick.

To avoid this outcome, most congressional Democrats and some Republicans would combine guaranteed issue and community rating with the requirement that all workers buy health insurance—that is, an "individual mandate." This solves the incentive problem, and guarantees that both the healthy poor 25-year-old and the sick higher-income 55-year-old have heath insurance.

But the combination of a guaranteed issue, community rating and an individual mandate means that younger, healthier, lower-income earners would be forced to subsidize older, sicker, higher-income earners. And because these subsidies are buried within health-insurance premiums, the massive income redistribution is hidden from public view and not debated.

If Congress goes down this road, health insurance premiums will increase dramatically for the overwhelming majority of people. Even if Congress mandates that everyone have health insurance, many will choose to go without and pay the tax penalty. If you think people are dissatisfied with health care now, wait until they understand that Congress voted to mandate hidden premium increases and lower wages.

There are wiser and more equitable ways to ensure that every American has access to affordable health insurance. Policy experts and state policy makers have experimented with different solutions, including high risk pools and taxpayer-funded vouchers subsidized for those who are both poor and sick. Medicaid, charity care, and uncompensated care provided by hospitals cover some of these costs today.

These solutions are imperfect, but so are the reforms being proposed in Congress. Congress should be explicit about who will pay more under its plans.

—Mr. Leavitt, former secretary of Health and Human Services (2005-2009), has served as the administrator of the Environmental Protection Agency and a governor of Utah (1993-2003). Mr. Hubbard (2005-2007) and Mr. Hennessey (2008) served as directors of the White House National Economic Council.

Printed in The Wall Street Journal, page A21
It's not that I'm such an idealogue on this issue that I'm unwilling to hear debate, but this strikes me as much like the case of the Mackey editorial they previously published that pans to centricism by claiming to be interested in discussion about real options but in actuality is advocating doing nothing at all because there's no actual concern for the welfare of sick Americans.

The comparison to home insurance is particularly galling. It may be true that we do not try to sell insurance to people while their homes are on fire, but we also do not deny them the services of the fire department because they were unable to purchase insurance before the fire. :rolleyes:

I like the WSJ but apologize, because I'm mostly ranting here....
 

Eraserhead

macrumors G4
Nov 3, 2005
10,300
10,384
UK
Sadly the WSJ is owned by Murdoch along with Fox News, so its not a great source anymore :(.
 

nbs2

macrumors 68030
Mar 31, 2004
2,713
485
A geographical oddity
The comparison to home insurance is particularly galling. It may be true that we do not try to sell insurance to people while their homes are on fire, but we also do not deny them the services of the fire department because they were unable to purchase insurance before the fire. :rolleyes:
I don't know why that one isn't trotted out more often (or maybe it is, and I just don't notice). It certainly frames the issue very well. I suppose the counter is that we don't deny people the right to seek emergency treatment because they don't have health insurance either. And, in either case, it can leave the individual with a serious debt to pay. But, then again, the solutions to protecting the individual from fire (smoke detectors and suppression systems) are made to protect the most at risk (free distributions by the fire department, mandates for sprinklers in every apartment and new home). For health, the protections (well visits, preventative care) are set up to leave the most at risk exposed (high costs, no mandate for providing preventative care).

Anyway, we can ignore this opinion piece. Leavitt is forgettable in that way. The only former Utah governor that woth paying attention to is Huntsman.
 

mkrishnan

Moderator emeritus
Original poster
Jan 9, 2004
29,641
12
Grand Rapids, MI, USA
I don't know why that one isn't trotted out more often (or maybe it is, and I just don't notice).
What you say is true -- in the end, the fire analogy is just not a good analogy. It's true that we do offer emergency services and some urgent care services to the un- or under-insured. It's also true that the state doesn't pay for a person who has a home fire to get back up to their standard of living before the fire (instead enacting measures to encourage people to be insured, if not force them to do so).

I also don't disagree that, conceptually, there exists a line where things of most kinds can be considered luxuries. When someone's house burns down, no one is saying we should buy them a new mansion and Subzero appliances. Getting a nice new home is understandably above and beyond what every American should expect as part of human dignity (having a roof over one's head is not). No one is saying that it's sad we live in a country where all Americans do not have access to Mercedes Benz's and that we should enact a public program to buy a C-class for everyone.

But if you get right down to it, I think very few Americans would say that surviving leukemia or receiving cardiovascular care that would prevent one from having a heart attack or stroke really falls into the realm of luxury services. Many Americans might call elective cosmetic surgery a luxury service, but would not think a burn victim or breast cancer survivor is pursuing a wholly cosmetic service. Sports fitness assessments might be an extravagance but rehabilitation for people in car accidents is not.

Very few Americans, that is, aside from Leavitt, Mackey, and the editors of the Journal. I think, in honesty, it's shocking to me because this a view that is about as much out of tune with the American sense of decency as birthers are. And the Journal, which says many sensible things (many more than Fox News, certainly), has become its mouthpiece.
 

abijnk

macrumors 68040
Oct 15, 2007
3,286
4
Los Angeles, CA
This looks like its right up there with the Washington Time's editorial "Death Panels by Proxy" (referring to part of the Baucus bill).

Let's just face it, there is no good media out there anymore, not in this country. Reporters have turned into pontificaters, and it doesn't matter if an editorial is fact based or not, as long as it is flashy they'll print it.
 

Eraserhead

macrumors G4
Nov 3, 2005
10,300
10,384
UK
Let's just face it, there is no good media out there anymore, not in this country. Reporters have turned into pontificaters, and it doesn't matter if an editorial is fact based or not, as long as it is flashy they'll print it.
So no American media to be used as a PRSI source? Is that where we should go with this?
 

Zombie Acorn

macrumors 65816
Feb 2, 2009
1,301
9,062
Toronto, Ontario
I don't see issue with the reasoning in the article. I thought thats why dems were pushing for a public option. In reality dictating to private businesses to provide insurance without assessing risk or tieing their hands to assessing risk is going to cripple them.

The whole rationale behind a public option (in my mind) is to create a safety net for those who fall through the cracks when private industry will not be able to cover them.
 

tofagerl

macrumors 6502a
May 16, 2006
952
389
Income Redistribution... Snicker... You americans with your fancy synonyms and allegories and stuff.

Here in Europe, we call a tax a tax, and then people vote on wether to tax or not.
 

nbs2

macrumors 68030
Mar 31, 2004
2,713
485
A geographical oddity
But if you get right down to it, I think very few Americans would say that surviving leukemia or receiving cardiovascular care that would prevent one from having a heart attack or stroke really falls into the realm of luxury services. Many Americans might call elective cosmetic surgery a luxury service, but would not think a burn victim or breast cancer survivor is pursuing a wholly cosmetic service. Sports fitness assessments might be an extravagance but rehabilitation for people in car accidents is not.
I agree with most of what you wrote, execpt for one small, possible exception in the above. But, I'll get back to that in a moment.

I don't disagree with what you state here, but at the same time, I think the problem that has developed in this process is that we (both sides) have dehumanized those who disagree with us. Instead of seeing logic as you present it here, one side will villify you for wanting the government to take over the world while the other will mourn over the fact that every day half of America dies from the lack of health services because the insurance industry has never paid out a claim.

So, the disagreement. Somethign like sports fitness assessments are the type of thing that not only should be covered, it should be provided as a government service. Not a full scale review, but I imagine that we could reduce the numebr of deaths and injuries that we see in the US from exertion if people were evaluated proir to starting fitness efforts. Even it is a superficial evaluation, knowing that you are at high risk for a heart attack could reduce the number of old folks that die shovelling snow, etc.

The most essential services to get running are those reduce costs beyond the cost of deployment (i.e. the profitable ones).
 

abijnk

macrumors 68040
Oct 15, 2007
3,286
4
Los Angeles, CA
So no American media to be used as a PRSI source? Is that where we should go with this?
Did I Say that? I sure didn't mean to... I think everybody here in PRSI knows that every source has to be taken with a grain of salt, there are legitimate articles out there, but finding them is harder than it ever should be.
 

Eraserhead

macrumors G4
Nov 3, 2005
10,300
10,384
UK
Did I Say that? I sure didn't mean to... I think everybody here in PRSI knows that every source has to be taken with a grain of salt, there are legitimate articles out there, but finding them is harder than it ever should be.
I thought:

Let's just face it, there is no good media out there anymore, not in this country.
Said it pretty well :eek:.

After replying to yet another post saying Fox News was a "legitimate" source I got a bit pissed off.
 

Shivetya

macrumors 68000
Jan 16, 2008
1,543
223
The comparison to home insurance is particularly galling. It may be true that we do not try to sell insurance to people while their homes are on fire, but we also do not deny them the services of the fire department because they were unable to purchase insurance before the fire. :rolleyes:

I like the WSJ but apologize, because I'm mostly ranting here....
Uh, we pay taxes for the fire department.

Want the simple beef I have. We are going to take money from people who do produce and many of whom who do pay their way to give to those who REFUSE to prioritize their spending appropriately.

As in, they will not pay for health care or try under the lament that its too expensive or they don't have the money yet...

many will have a large car payment, if not more than one.
many will have stupid cell phone plans
many will have credit card debt; already showing they don't prioritize properly
many will have many monthlies (read: all those "its just 19.95 a month"


I am not against protecting people from losing it all to catastrophic issues, but you should be required to commit your money to daily and weekly needs before asking your neighbor to pay for it. Sorry, but if you have enough for the fancy cell phone, fancy APPLE computer, the nice car, you don't have reason to ask someone else to pay except selfishness.
 

Gelfin

macrumors 68020
Sep 18, 2001
2,166
4
Denver, CO
I am not against protecting people from losing it all to catastrophic issues, but you should be required to commit your money to daily and weekly needs before asking your neighbor to pay for it. Sorry, but if you have enough for the fancy cell phone, fancy APPLE computer, the nice car, you don't have reason to ask someone else to pay except selfishness.
People who can afford fancy cell phones, Apple computers and nice cars will be taxed commensurate with someone who makes enough money to buy fancy cell phones, Apple computers and nice cars. If they are overextending themselves to afford these things, such taxation may reduce their ability to afford them somewhat, and the financial consequences of such poor budgeting will sort themselves out naturally.

Contrast with the present situation, where poor money management combined with an unforeseen medical crisis leads to irrecoverable financial ruin for the individual, but heavy costs to society as well, as we must pay for the high-cost crisis care they cannot afford and did not prepare for.

Given the latter is at least as expensive, and often more so, is maximally punishing people for not choosing to be responsible really worth the premium cost over taking away the option to not help fund the health care safety net society doesn't have the option not to provide them?
 

Iscariot

macrumors 68030
Aug 16, 2007
2,624
3
Toronteazy
Somethign like sports fitness assessments are the type of thing that not only should be covered, it should be provided as a government service.
Most gyms won't allow people to become members unless they have successfully filled out a PAR-Q that assesses their risk of injury, and if that risk is anywhere above "low" a doctor's note in required to continue forward.
PAR-Q said:
1. Has your doctor ever said that you have a heart condition and that you should only do physical activity recommended by a doctor?
2. Do you feel pain in your chest when you do physical activity?
3. In the past month, have you had chest pain when you were not doing physical activity?
4. Do you lose your balance because of dizziness or do you ever lose consciousness?
5. Do you have a bone or joint problem (for example, back, knee or hip) that could be made worse by change in your physical activity?
6. Is your doctor currently prescribing drugs (for example, water pills) for your blood pressure or heart condition?
This could actually be implemented at a very low cost; some television commercials and advertising that leads to an online questionnaire that then refers people to local doctors if they don't meet the PAR-Q guidelines. Recently here there was a similar "check up from the neck up" campaign about mental health that I think would work on the subject of physical health as well.
 

mkrishnan

Moderator emeritus
Original poster
Jan 9, 2004
29,641
12
Grand Rapids, MI, USA
we (both sides) have dehumanized those who disagree with us.
This is very true. I'm guilty to some extent of it as well. Now I don't lend any credence to the viewpoint, "I don't care whether or not anyone else has healthcare as long as I can purchase the best healthcare in the world as I am rich" or really any variant that amounts to "let's do nothing" or "the market will take care of this" in the absence of any convincing data to support those views. Those views don't involve healthcare reform. I have not personally seen any of them presented with any compelling evidence to support the view that not reforming healthcare is a good idea. Honestly I don't expect to see such evidence (now someone might make a compelling argument that we should table healthcare for one year or three. I see no likelihood of a good reason to do nothing in the long term about healthcare).

But you're definitely right in that, even among all the people who are legitimately talking about health care, there is too much vilification going on. It gets in the way of legitimate discussions... for instance, we've now been hearing for months about these "cooperatives" and still there is really hardly any discussion about how they'd work. Or, while the death panel business is vile itself and needs no vilification, there is an underlying discussion about end of life (where I think the dominant viewpoint in the US, for instance, has amply been demonstrated to be very different than the dominant viewpoint in Europe or elsewhere, and there needs to be serious discussion about this). That discussion is not happening, for instance, and for shame!

So, the disagreement. Somethign like sports fitness assessments are the type of thing that not only should be covered, it should be provided as a government service.
Yeah... now that probably does fall under an annual physical, but I think one could go back to the original idea of managed care and make an argument that things like sports fitness that keep people active and reduce their risk for a whole host of cardiovascular, orthopedic, and even psychiatric diseases, should actually be at the top of any pyramid of the most important healthcare services, since they are preventative in nature. :eek:
 

abijnk

macrumors 68040
Oct 15, 2007
3,286
4
Los Angeles, CA
I thought:



Said it pretty well :eek:.

After replying to yet another post saying Fox News was a "legitimate" source I got a bit pissed off.
I guess it just comes down to the definition of a good media outlet. I don't want anyone to tell my what to make of the material they are presenting. I am perfectly capable of drawing my own conclusion and don't need some half-wit reporter to give me their take. I also happen to think that way too many people do rely on said half-wits to tell them what to think of the material presented, thus our current situation. But that's a rant for a different thread... :eek:

People who can afford fancy cell phones, Apple computers and nice cars will be taxed commensurate with someone who makes enough money to buy fancy cell phones, Apple computers and nice cars. If they are overextending themselves to afford these things, such taxation may reduce their ability to afford them somewhat, and the financial consequences of such poor budgeting will sort themselves out naturally.

Contrast with the present situation, where poor money management combined with an unforeseen medical crisis leads to irrecoverable financial ruin for the individual, but heavy costs to society as well, as we must pay for the high-cost crisis care they cannot afford and did not prepare for.

Given the latter is at least as expensive, and often more so, is maximally punishing people for not choosing to be responsible really worth the premium cost over taking away the option to not help fund the health care safety net society doesn't have the option not to provide them?
I think you have hit the nail on the head. While ideally everyone would take financial responsibility for themselves it simply isn't realistic. It's a great ideal to hold, but doesn't do anything to further progress on the issue. Furthermore, holding only this ideal in mind when looking at the issue of health care completely ignores the fact that society already does pay for the cost of those not covered by insurance, just not necessarily as directly as a public option might be. With this in mind, it is fairly easy to see that getting these people covered, and thereby minimizing (or at least reducing) the financial cost to society as a whole is beneficial to everyone.
 

mkrishnan

Moderator emeritus
Original poster
Jan 9, 2004
29,641
12
Grand Rapids, MI, USA
I don't want anyone to tell my what to make of the material they are presenting.
Now the problem here is that value judgments are everywhere. Not to go all Robert Pirsig on you, but the idea of a truly impartial press is not a memory of good old times but a fabrication. It's just not really even possible. Now that's quite the tangent, but actually, the CSM did an interesting piece on it last week...

That being said, this was an op-ed. Even still, it draws conclusions that seem particularly poorly related to reality.
 

abijnk

macrumors 68040
Oct 15, 2007
3,286
4
Los Angeles, CA
Now the problem here is that value judgments are everywhere. Not to go all Robert Pirsig on you, but the idea of a truly impartial press is not a memory of good old times but a fabrication. It's just not really even possible. Now that's quite the tangent, but actually, the CSM did an interesting piece on it last week...
I'm well aware of that, but what we have in the U.S. has gotten a bit out of hand.
 

Eraserhead

macrumors G4
Nov 3, 2005
10,300
10,384
UK
Yeah, more liberal socialism. We should privatize fire protection services. Then after that, we should privatize police services, too. You know, like in Robo Cop?
What about schools and roads? Both of them should be privatised too.
 

skunk

macrumors G4
Jun 29, 2002
11,745
3,997
Republic of Ukistan
There is a de facto private option in all these areas already. You can choose private healthcare, private education, private security, private transport, even a well-regulated private militia. What's the problem?
 

Cave Man

macrumors 604
Private schools do perform better in standardized testing. Parents tend to be more involved when they are paying straight from the pocket book.
Don't forget that private schools can dismiss students for any reason, as long as it's not based upon race. When such a selection process in place, they tend to get students who perform better or dismiss those who do not. Public schools have no such luxury - they have to take all.