The unofficial Obamacare thread...

[buzzdog]

I would add that people choosing one of the public options could have premiums deducted in their payroll tax as well. Which wouldn't be available to those choosing private insurance.

 

[buzzdog]

You're essentially describing a Medicare buy-in program...

I'm all for it!

But the Republicans (and some Democrats) would never allow it... The reason is because insurance companies cannot compete with Medicare; so, as more people buy into Medicare, the insurance industry loses more and more revenue.

While wealthier Americans might choose to buy their own insurance, that insurance will cost more and more as private pools decrease in size. Meaning only the wealthiest of Americans (by some estimates only the top 5%) would be better off in a private system than the public one.

So, essentially, as Republicans and conservative Democrats have stated; a Medicare buy-in simply means the slow death of the private health insurance industry -- since 90%+ of Americans would prefer Medicare to private/employer-based insurance.

I see your point.

BUT, if conservative thinking people truly believe free market private insurance is intrinsically superior (which they do) then why wouldn't they allow it to compete with a public option on an even playing field?

The catch would be to make the public options close to revenue neutral, sustained by premiums paid by subscribers. The accusation by conservatives opposing it would be that you can't trust government, and that it would turn into some kind of taxpayer funded give-away.

That's why I think subsidies should be separate and available to both the public and private insurance. There would need to be measures to keep self funded enrollees separate from those already receiving or due to receive Medicare for accounting purposes. But I would think they all would benefit equally by economies of scale from being the biggest "group insurance" group.

 

[gourimoko]

I would add that people choosing one of the public options could have premiums deducted in their payroll tax as well. Which wouldn't be available to those choosing private insurance.

Yes definitely... Medicare-for-All is generally a tax-based system.. so you don't actually pay premiums up front but as part of your payroll tax / income tax. Those choosing to opt-out, could get tax credits to this effect.

Again, it's all great, but, how do you convince conservatives to go along with it is the question?

 

[buzzdog]

To me the enticement for conservative support would be that they get to write their own plan, as perfectly as they can make it, to benefit private insurance in any ways possible to bring down costs.

But those same rules would apply to public insurance as well, if beneficial to lowering costs.

I just see this as the only completely free market option, with every option being available to those buying insurance. To do the Rand Paul private system only really isn't completely open competition if it doesn't compete with with a public option, is it?

 

[buzzdog]

Yes definitely... Medicare-for-All is generally a tax-based system.. so you don't actually pay premiums up front but as part of your payroll tax / income tax. Those choosing to opt-out, could get tax credits to this effect.

Again, it's all great, but, how do you convince conservatives to go along with it is the question?

At the time Q-Tip said he could endorse such a system, as long as conservatives got to write their private system to their liking, and to participate in it without having to carry those choosing the public option.

I don't think conservatives would go along with having the money deducted up front from payroll taxes then reimbursed and I wouldn't blame them. I wouldn't want anything deducted for something I'm not using. I think it would be something you'd have to "opt in" for. Then those buying from private providers would just pay out of pocket. Essentially those buying the public option would be paying out of pocket as well, but I see advantages to using the IRS to collect the premiums as with Medicaid, etc.

Once people reach retirement age I assume they all go on to Medicare. unless they went whole hog and allowed people to opt out of Medicare for private insurance but then they'd be stuck with their choice I suppose. That's getting too far out in the weeds for me though, I mainly see this as a solution to the current dilemma.

 

[gourimoko]

I see your point.

BUT, if conservative thinking people truly believe free market private insurance is intrinsically superior (which they do) then why wouldn't they allow it to compete with a public option on an even playing field?

Because they would argue that you're creating an unfair advantage by introducing Medicare as a private market competitor. They would stipulate that Medicare is a government subsidized program that cannot innovate at the pace and rapidity of private market solutions; and therefore, allowing Medicare to displace the private insurance industry would led to a stagnation of sorts within the insurance market.

Liberals would retort that the insurance market shouldn't exist in the first place; and then there you are...

I do not think conservatives actually believe the private market is the cheaper or more efficient solution; but instead, that there is an intrinsic value to small government -- thus, there is value in people paying for their own care at a micro- , individualistic level; rather than that money and power being vested with the government.

This argument is not one of expenditure, efficiency, cost, or savings; but of ideological principles. That is to say, the conservative argument essentially boils down to the question: what is the role of government, and what powers should it have?

The catch would be to make the public options close to revenue neutral, sustained by premiums paid by subscribers. The accusation by conservatives opposing it would be that you can't trust government, and that it would turn into some kind of taxpayer funded give-away.

Medicare is an extremely efficient program compared to private insurance, with much lower costs. Buying into Medicare would be undoubtedly substantially cheaper than buying a comparable private insurance package. Also, the rate of increase of Medicare spending has actually declined over the past 15 years, with the actual cost per capita decreasing over the past 5 years.

That's why I think subsidies should be separate and available to both the public and private insurance. There would need to be measures to keep self funded enrollees separate from those already receiving or due to receive Medicare for accounting purposes. But I would think they all would benefit equally by economies of scale from being the biggest "group insurance" group.

Totally fine with all of this...

But again, the conservative argument here is that you'd drive the insurance industry into the ground?

 

[gourimoko]

To me the enticement for conservative support would be that they get to write their own plan, as perfectly as they can make it, to benefit private insurance in any ways possible to bring down costs.

But those same rules would apply to public insurance as well, if beneficial to lowering costs.

I just see this as the only completely free market option, with every option being available to those buying insurance. To do the Rand Paul private system only really isn't completely open competition if it doesn't compete with with a public option, is it?

I totally agree with you, especially the bolded.

But again, what happens when 90% of people opt-in to Medicare?

 

[buzzdog]

Thinking about it I would assume you pay your Medicare tax as we do now, then there would be an additional "public option" tax deducted for those who choose it. But it would definitely have to be an "opt in", and not an "opt out" on the payroll tax deductions.

 

[gourimoko]

At the time Q-Tip said he could endorse such a system, as long as conservatives got to write their private system to their liking, and to participate in it without having to carry those choosing the public option.

I don't think conservatives would go along with having the money deducted up front from payroll taxes then reimbursed and I wouldn't blame them. I wouldn't want anything deducted for something I'm not using. I think it would be something you'd have to "opt in" for. Then those buying from private providers would just pay out of pocket. Essentially those buying the public option would be paying out of pocket as well, but I see advantages to using the IRS to collect the premiums as with Medicaid, etc.

Once people reach retirement age I assume they all go on to Medicare. unless they went whole hog and allowed people to opt out of Medicare for private insurance but then they'd be stuck with their choice I suppose. That's getting too far out in the weeds for me though, I mainly see this as a solution to the current dilemma.

It's totally fine if they declare on their W-4 a deduction so that it doesn't come out of their payroll tax...

But I don't know of many people who would actually choose a lesser plan, that's 25% more expensive, just because they're conservative. Conservatives use Medicare, Medicaid, and Social Security just as much as liberals do; actually they use those programs even more than liberals do on average.

So.. I'm not sure who is left, besides the absolute wealthiest Americans (top 5%) as well as some folks who simply need premium care who won't choose to use Medicare? I suppose some young people will choose to roll with a cheap option; but if Medicaid still exists, that's still part of the public pool.. so, again, there's no one left for the private insurance industry...

 

[gourimoko]

Thinking about it I would assume you pay your Medicare tax as we do now, then there would be an additional "public option" tax deducted for those who choose it. But it would definitely have to be an "opt in", and not an "opt out" on the payroll tax deductions.

I think opting in should be done outside of your W-4, personally... I don't think Medicare-for-All should really be an employer-based system. That's kind of why I think it should happen on your 1040, rather than your W-4...

Otherwise, the IRS should setup another means of opting in, so that people can have the tax withheld from their returns, or pay it up front.

 

[Cavatt]

Buzzdog, I think you have really hit the nail on the head. No reason they couldn't do that. I think Gouri is right as well. Private insurance exists in England, but almost no one gets it. It would be relegated to a sort of Aflac type of thing.

 

[buzzdog]

Because they would argue that you're creating an unfair advantage by introducing Medicare as a private market competitor. They would stipulate that Medicare is a government subsidized program that cannot innovate at the pace and rapidity of private market solutions; and therefore, allowing Medicare to displace the private insurance industry would led to a stagnation of sorts within the insurance market.

This is why it would be critical that the true costs of the insurance must be reflected in the premiums. The public option must be self supporting, revenue neutral. Not subsidized. Hell, the premiums should include their share of administrative overhead. This revenue neutrality would have to be iron clad.

I don't understand why conservatives would oppose this as long as they don't pay anything out of their pocket, they get to opt out and buy into a private plan of their choosing.

As to your other points, I agree that a public option is more efficient therefore cheaper than private insurance. But conservatives don't. They believe free market competition is the only way to drive down costs. If anything the existence of a Medicare buy-in competing for services under the same rules should create even more competition and drive down costs even more than if it didn't exist, as long as it is an even playing field.

As far as the proper role of government and such? That argument is based on the supposition that everything government touches gets fucked up, and taxpayers end up footing the bill. If conservatives truly believe this then they also believe the private free market will end up winning by providing superior care for less.

As long as it doesn't cost them any money, and is completely self funded I just don't see how anyone could argue against it with one iota of credibility. The trouble would come from them assuming the government will steal their tax dollars to fund other people's health care.

For me the safety net should be somewhat of a separate issue. It could be tied in but it also must stand alone economically for accounting purposes and to prevent those fears from those opting out of a public option.

 

[buzzdog]

I think opting in should be done outside of your W-4, personally... I don't think Medicare-for-All should really be an employer-based system. That's kind of why I think it should happen on your 1040, rather than your W-4...

Otherwise, the IRS should setup another means of opting in, so that people can have the tax withheld from their returns, or pay it up front.

I can agree with this. But I like the idea of these kinds of things being deducted up front from the paycheck, and it ensures the revenue stream coming into the system to some degree.

 

[buzzdog]

Buzzdog, I think you have really hit the nail on the head. No reason they couldn't do that. I think Gouri is right as well. Private insurance exists in England, but almost no one gets it. It would be relegated to a sort of Aflac type of thing.

As long as conservatives get to buy the kind of insurance they want for the price they want then why wouldn't they want to do this? I assume in their minds they would assume the public option route would eventually go to hell in a handbasket.

Their insecurity would be that they would eventually get stuck with the bill. The public option would have to be written in a fiscally secure way and the people enrolled would have to be responsible for making up any shortfalls with increased premiums.

I honestly don't know what would happen to private insurance. The playing field would have to be completely even with no hidden advantage given to the public option beyond inherent superiority of the system. The private insurance advocates believe private insurance in inherently superior as long as there is free market competition.

This could and should be a real life laboratory to let public and private systems duke it out, let the best system win. It would be intellectually dishonest to deny this as long as it was done properly, honestly and with complete transparency. That's hard with something so large but it shouldn't be impossible.

Hell, if conservatives think private is so superior I would let them opt out of Medicare with credits for what they've paid in, to use it for their own private retirement health care. I would think Paul Ryan would cream himself at that thought.

It just seems like the best of both worlds, where both sides get exactly what they want. Seems to me like the vote would be unanimous except to the extreme fringes of both sides.

I'd like to see this sent to Bernie Sanders and Rand Paul, and let them roll it out together. I don't know the best way to do this but it's kind of pissing me off that there's all this turmoil over this and nobody seems to be seeing this solution.

 

[buzzdog]

Now that I've seen Gouri's responses I'd like to get the Q-Tip in here for his $.02 and to let him shoot holes in it.