June 29, 2005
Romney's new health care proposal
The governor of Massachusetts has some new ideas for health care that, if nothing else, may help stimulate public discussion of the problem and our options for dealing with it.
The U.S. Census Bureau reports that 15% of U.S. residents lack health insurance, not being old enough to qualify for Medicare, poor enough to qualify for Medicaid, fortunate enough to have employer-provided coverage, or willing or able enough to pay for it on their own. Some, like Tyler Cowen at Marginal Revolution, are not terribly alarmed by this, arguing that many of these uninsured are undocumented immigrants (more recent evidence on which here), college students, or people whose true status has been miscounted in the Census Bureau's surveys. Others, like Econlog, appear unconvinced that the situation has resulted in significant untreated health problems.
Whatever your interpretation of the Census Bureau statistics, there is no denying how the system works in practice when the uninsured need urgent health care. They show up in the nation's hospital emergency rooms and trauma centers, where, if they can't be turned away, the hospital or the state ends up stuck with the bill. California Physician reported last fall that California emergency rooms lost $325 million in 1999-2000, $390 million in 2000-2001, and $460 million in 2001-2002. And California Healthline claimed that 70 emergency departments and trauma centers in California have closed since 1990, a period during which the state's population was growing dramatically.
It is hard to see how this arrangement for footing the bill for the uninsured could represent an optimal policy. Governor Mitt Romney (R-MA) has some new suggestions for how to approach this problem that in my opinion warrant a careful look. The governor's plan would require those with no insurance who use medical care to pay their own way, or, if not, risk having the state recoup any medical costs through state income taxes or payroll deductions. The plan includes a "safety net" feature to provide state assistance to purchase health insurance for those with limited incomes but not poor enough to qualify for Medicaid.
The plan is not without its critics. Pinko Feminist Hellcat lets rip with
I have an even bigger problem with the tired rhetoric that gosh, these lazy poor people just don't want health care, and we will have to beat them with a stick to get it....I don't know of any folks who would prefer to forgo health insurance and hit the ER, and the rhetoric that would suggest otherwise is breathtakingly ignorant.
FullosseousFlap's Dental Blog has a no less full-throated condemnation from what appears to be more of a right-wing perspective:
In an era where citizens demand less governmental intrusion in their lives here comes a child-support - alimony type government coercion plan to make sure you pay your medical bills....This is not a conservative healthcare plan at all. It is government intrusion.
And yet there are a number of others, certainly themselves hardly at the center of the political spectrum either, who are prepared to take Romney more seriously. The Boston Globe quotes Sen. Edward Kennedy (D-MA) as describing Romney's plan as "a healthy step forward", though adding "details of the benefits offered and the level of cost-sharing individuals will face are crucial to understanding this proposal." And the Boston Herald claims that Romney's plan was developed in consultation with the conservative Heritage Foundation.
What sort of a plan could end up getting Senator Kennedy to agree with the Heritage Foundation? The proposal would have a considerably different character as you consider varying the cutoff specifying who qualifies for the safety net and how much government assistance is provided for them. If you set those limits so that all but the richest households qualify for substantial assistance, the plan becomes in effect a universal health care coverage which Senator Kennedy has long championed. On the other hand, if you reduce the safety net to virtually nothing, the plan has a sort of Charles Dickens, throw the poor in jail when they get sick flair to it that even Ebeneezer Scrooge might come to admire.
As .08 acres (and a Donkey) observes, the devil is most assuredly in the details here, and once one specifies particular dollar values for these critical parameters, the battle lines will again no doubt be drawn across familiar ground, with Senator Kennedy and the Heritage Foundation eyeing each other from opposite sides of the issue.
Even so, I count it as progress of sorts if we might in this fashion find ourselves at least able to agree on what we want to buy, leaving just the little matter of haggling over the price. A proposal like Romney's strikes me as a constructive way to frame a public discussion of exactly where America stands on who should pay the medical costs of the uninsured.
Posted by econbrowser at June 29, 2005 09:54 PMdigg this | reddit
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Via economist James Hamilton's new blog comes word of yet another new health care plan, this one from Massachusetts Governor Mitt Romney. Romney's plan would require everyone to purchase health insurance, and would provide financial assistance to those... [Read More]
Tracked on June 30, 2005 07:26 PM
A couple points:
First, like many others (including Paul Krugman, alas), you imply ("not being...poor enough to qualify for Medicaid") that all Americans whose household income falls below a certain amount have or can get Medicaid coverage. This is just not so.
Each state sets Medicaid eligibility rules, and poverty is no guarantee that you will be covered. For example, in my state of California, no one qualifies for Medicaid who is not either disabled, or the parent of dependent minor children, regardless of income (or lack thereof).
Many poor Californians who do not qualify for Medicaid may be covered under other programs (mostly run by the counties); but again there is no guarantee that anyone will be covered, or, if covered now, will not be dropped when next year's state or local budget axe falls.
A couple states (I believe Wyoming is one) have announced that they plan to phase out their Medicaid programs entirely over the next few years, so that nobody in those states will then have Medicaid coverage.
The idea that the poorest Americans necessarily have access to care under the Medicaid program is thus a myth, though one widely credited among the insured middle-class. There is in fact no income-based Medicaid entitlement.
Second, your characterization of who pays for emergency care of the uninsured is incomplete. ("...when the uninsured need urgent health care...[t]hey show up in the nation's hospital emergency rooms and trauma centers, where, if they can't be turned away, the hospital or the state ends up stuck with the bill.")
Sometimes, yes; but first, the hospital (even the non-profits) will aggressively attempt collection of unpaid bills, and will place liens on wages and on homes, cars or any other assets owned by the patient-debtor. Inability to pay medical expenses not covered by insurance are one of the leading causes of bankruptcy in America. The idea that hospitals and other service-providers simply roll over and eat these charges is another myth, also widely-held.
Also, the notion (which you took no position on) that the problem of the uninsured primarily affects illegal immigrants is ludicrous. Every year, as premiums rise, more businesses either drop their employee coverage entirely, or raise premiums to levels which many workers can no longer afford. Anyone who believes that native-born Americans are not affected by this crisis are willfully deceiving themselves.
Posted by: Nancy Irving at July 1, 2005 02:10 AM
http://roadmaptocoverage.org/pubs/main.html ... RoadmapToCoverage ... I am not endorsing that site; however, it is the website of the BCBS Foundation of Massachusetts mentioned in the article you linked. There is also a huge PDF describing the uninsureds in MA, and a PDF alternative proposal, from what I can gather. I thought it might be useful to readers and provide richer context for Romney's proposal; I'm putting it on my reading list. They also promise to follow the debate into the future.
As for now, I will mainly read, listen, think and hopefully learn. Thanks for bringing this to my attention.
Posted by: Victor at July 1, 2005 05:39 AM
In your reference to the census report, you say: "The U.S. Census Bureau reports that 15% of U.S. residents lack health insurance, not being old enough to qualify for Medicare, poor enough to qualify for Medicaid, fortunate enough to have employer-provided coverage, or WILLING or able enough to pay for it on their own."
The emphasis on WILLING is mine. It is completely absurd for them to include people who are merely unwilling to pay for it on their own.
What % of the uninsured does this represent and how do they even determine that? What kind of consumption tradeoffs are people making when they willingly decide not to purchase insurance? What kind of car do they drive? Do they own cable tv and a dvd player? How much to they spend per week on beer and cigarettes?
All of these externalities are very hard to measure, but I'm pretty alarmed by the inclusion of those who are "unwilling" to pay for health insurance.
If you're unwilling to pay for something, that is a completely issue from being unable to get it.
Posted by: nmg at July 8, 2005 09:15 AM
Perhaps the solution would be for gov't to simply purchase a blanket catastrophic policy covering any medical 'incident' in excess of $10,000 or so for those who are not on Medicare or Medicaid. Those with private insurance will see their premiums decrease (since the state insurance would cover catastrophic incidents) & hospitals will be paid for big ticket items.
For bills below $10,000 hospitals...like any other business...can continue to do their own collection efforts including lawsuits and wage garnishments if necessary.
Of course this would have to be funded with additional taxes but on the benefit side hospitals would be able to cut back on passing the cost of write offs onto those with coverage. That would at least provide reduced premiums which is really needed by business and individuals.
Posted by: Boonton at July 14, 2005 11:14 AM
One next step I'd like to see is for the government to buy insurance for the poor at flat rates.
Basically, the government would say "we'll pay any company $4,000 to insure Joe Blow," with the following provisions:
1. If the company accepts -any- Joe Blow and his $4000, it must accept -all- Joe Blows with their $4000's.
2. The policy must cover some minimum set of things (that can be written in less than 10 pages).
3. Except for where strictly necessary (the billing department) the company is not allowed to maintain records of which customers get their insurance paid by the government.
If no company accepts the vouchers (is that a politically loaded word?) then the state knows that they aren't paying enough.
That, and we need better mechanisms for individuals to buy their own insurance.
Posted by: Dan at July 20, 2005 12:56 PM
In my view your health care proposal is very nice because health care so expensive today I think health insurance one thing which requires this major aspect.
Posted by: Susan R at February 2, 2006 10:08 PM
In my view the health care system of a nation reflect its socio-economics and cultural standards.
Posted by: Susan R at February 7, 2006 01:57 AM