America Is Purple

There’s been a lot of debate for months now on the health-care reform bill in congress.  A lot of groups on both sides absolutely hate it.  Those on the right call it “Socialist” despite it not coming anywhere close to actual socialized medicine.  Those on the left call it a gift to the health insurance corporations.  What it is really is a gutted compromise that will be better than nothing, but certainly won’t solve the problem long-term.  In order to better understand the debate, let’s look at some health care options.

The basic idea behind health insurance is that you take a large group of people and pool their resources so that if one of the group gets sick, the others pay for their treatments.  It’s a bad deal for the healthy people but pays off once it’s their turn to get sick or injured.  A simple example would be 10 people who pool together and each one pays $100 a month.  One of them gets sick, there is $1000 per month available to pay for their treatment.  If two of them get sick, there’s $500 for each of them.  As long as the number of sick people do not overwhelm the pool all at once, there’s plenty of money for their treatment, and in the long term the pool gains in value.  If more are sick than are well, it becomes necessary to either have each individual put more into the pool (raise rates) or increase the size of the pool to include more healthy people who contribute more than they take out of the system.  By increasing the pool from 10 to 100 people each paying the same $100, you then have $10,000 to work with for covering those 100 people.  If a low enough percentage of the people need actual care, the pool makes money.  If one person is taking up too much of the resources of the pool, it may be necessary to kick them out of the pool or risk taking the entire pool down or forcing the pool to raise the rate people are contributing.

What we have seen recently is people leaving the pool.  Due to unemployment and loss of income many more people are without healthcare, many of which are the relatively healthy who pay into the pool more than they take out.  This requires those that remain to pay more.  Hence the rate hikes we’re seeing across the board.  So how do we solve this problem?  There are a number of different ways to do it.

1) Single payer.  The actually socialist option.  Not that socialism is necessarily a bad thing.  In this model, everyone in the country is in the same massive pool.  Because it requires healthy people to join the pool as well as the sick, individual costs go down.  Since everyone has the same health coverage, you can go to any doctor in town and it will cost the same.  Instead of the current medicare and medicaid payments being removed from your check each month, you’d have the government taking out your healthcare payment from your wages.  Canada, England, and Germany all do healthcare this way and are quite happy with it overall. This is perhaps the most fair plan, but requires government management of the system and will cause hurt to the current health care companies.

2) Public Option.  The not quite socialist option.  In this plan, if the privately owned pools are not able to keep prices low enough to be affordable to the general populace, the government steps in sets up their own pool but without taking anything out for profits.  The corporations hate this because many people will chose the public option, and they will lose customers.  The Public Option must thread the needle of pools however because if they just admit the sick people, their pool will become unsustainable.  By requiring the healthy to join they can make it more solvent but that requires a mandate that will be a bad deal for the healthy, forcing them to pay into a system and not getting any real benefit.

3) The current bill in congress.  This does NOT (as of this writing) contain a public option, however it does require everyone to get health insurance in a similar way to the way we require all cars to be insured, with the exception that people can chose not to drive a car.  This will force the young, healthy people who currently forgo health coverage into the pool in the hopes that this will lower costs overall.  In the case of the poor who cannot afford the health coverage, it provides subsidies.  It’s pretty much the same system as we have no except that nearly everyone will be required to buy health coverage or pay a fine.  (Many people may opt for the fine since it may cost less than the health coverage they would be forced to get.)  On the plus side, health insurance companies would no longer be able to kick people out of the pool.

4) The current system.  The current system allows insurers to kick people out of the pool if they are too much of a drag on the system, costs more than other options, and leaves many people locked out in the cold.  Insurers will not invite someone already sick to swim in their pool.  Despite being quite unfair, it is an option.  It just requires that we ignore the suffering of those who aren’t allowed in.  It seems heartless (okay, it IS heartless) but the world is not fair and the have-nots will just have to deal.  We have a couple public-pools but being eligible for memberships is not guaranteed (medicare and medicaid.)

5) The libertarian plan.  Basically this involves getting rid of the public pools, medicare and medicaid, and letting everyone fend for themselves.  While the left may call this akin to throwing the wounded to the sharks, it would save a lot of money and reduce the deficit by a ton as spending on Medicare and Medicaid currently makes up nearly 20% of government spending.  (Factor in Social Security and it’s over 40%.)  With this plan, those who can’t afford coverage will drop out of the pool, leaving less people to spread the risk, further increasing prices, causing more people to drop out.

6) My wishful thinking plan.  Ban for-profit insurance companies and hospitals.  Cut off the need for profit from hospitals and require anything they make in profits be invested back into the hospital to improve the quality of care.  Insurance companies would be straight pools to balance risk amongst people to keep costs affordable.  This will never happen and if it actually did, there would probably be a drop in quality based on smart people no longer going into the field since they will no longer be making obscene profits.  On the other hand, maybe only those who are legitimately concerned with making people well would enter the field and it might just balance out.  Oh, and make for-profit drug companies illegal too.

So which of these actual options (1-5) is best?  That depends on the person.  I would like the socialist single-payer plan provided it could be administered efficiently.  Public option has some definite issues, although popular with progressives.  The current bill is not socialist at all, but doesn’t really go far enough in either direction to make much of a difference.  It’s better than nothing, but not anything to get excited (or worked up) over.  Despite the right calling it communism, it’s pretty much middle of the road.  The current system is broken, but still provides excellent service for those who can afford it.  I can’t in good conscience support the current system or the libertarian plan since they would leave many, many people consigned to a level of care below what wealthy people donate to third world countries.  Single-payer may be progressive totalitarianism, but I can’t see that being worse than the de facto anarchy we have now.  This is one case where the center may not be the best location, although if I’d have to pick I’d say the health care legislation currently in congress is not far from it.