Why Medicare works and Obamacare might not

Picked this up at Andrew Sullivan’s site. More at the link.

Mike Konczal blames Obamacare’s technical problems on the law’s design. He contrasts Obamacare’s form of social insurance, which he labels “Category A,” with previous forms of social insurance, such as Medicare and Social Security, which he labels “Category B”

http://sullydish.files.wordpress.com/2013/10/social_insurance_category.png

32 responses to “Why Medicare works and Obamacare might not

  1. Would single payer be B?

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  2. It’s a damn socialist program. Sucks that it works so well and costs so little. Very uncapitalistic! Can’t do that again.

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  3. Issues 1. through 4. in Konczal’s article are central to any informed discussion on the healthcare problem. I’m glad you posted this, Moe.

    I am a little unclear about what he means by “adverse selection” in issue 3. where he says,

    A third issue, and a major reason this is freaking people out, is that the first two problems could introduce adverse selection, as only the most needy will wait, and wait, to take advantage of the programs.

    Who are the “most needy”? I guess he’s talking about the poorest being reluctant to commit to paying insurance, even though their’s is subsidized, whereas a category B program bypasses the individual’s decision-making by extracting through the withholding process. Strange he doesn’t mention the youngest and healthiest people, those who think they’re 10 feet tall and bullet-proof and will never get sick. I think those are the biggest potential problem.

    He is certainly right to point out the conundrum presented to the GOP by these problems, since Ryan’s plan was also category A. As you and I, and many others, have pointed out, Category B, as in a single-payer system like Canada’s, would have been a better way to go. What a mess. A train wreck in slow and painful motion.

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    • Jim, I think ‘adverse selection’ means that the program is almost designed to discourage the young and healthy who are essential to a sustainable risk pool, so the program ends up self-selecting those most likely to use the insurance – older, sicker people.

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      • Only partially, assuming the term is being used in a normative fashion. If it is, adverse selection would also have to include the issues with insurance companies not being able to adjust rates upwards for high-risk policyholders and/or not being able to even ask questions that would identify such risk factors, e.g., race, gender, ethnic origin, and/or genetic test results.

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  4. Medicare doesn’t really work, at least not well at all now and would work even less so if more people were on it. Even with the yearly “off budget” Doc Fix, few doctors will accept Medicare patients because the reimbursement schedule and paperwork involved is so poor – and that’s both an objective opinion of the doctors and a comparative one vs. private sector insurance plans.

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    • I have Medicare and it works just fine, both at the hospital and the doctor’s. Some doctors aren’t accepting new Medicare patients, but others are. It’s not a problem in Joplin. Many like Medicare because payment is faster than with private insurance.

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    • Jim knows and so do I, jonolan: Medicare works just fine. It works just as it was designed to work and it is terrific. I’ve never ever been denied my choice of doctor or any treatment. I’ve never run into a paperwork screw up. It works very well indeed.

      The issue here of A vs B is about the insurance program and how it’s designed, administered and how that influences the costs of running it; not the costs of the medical care they pay for which would be the same for both. Because THAT’s where the future problems with Medicare come into play – it’s the costs of the health care itself, not the cost of the insurance. And in that regard, we really need to move away from the current ‘fee for service’ model. And Medicare does work – it needs reforms in many ways, but for almost 50 years it’s done exactly what it was designed to do. But the world has changed and so must it. I think it just makes sense to look to programs that work when designing new programs. Plus, Medicare is a tough price negotiator, which we desperately need more of.

      For my tax dollars to work most efficiently, give me “Medicare for all”. A universally mandated insurance program with young and old paying in like they are now but with the cost entirely restructured would expand the risk pool and could be completely sustainable.

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  5. Pingback: Why Medicare works and Obamacare might not… | Politicaldog101.Com

  6. I know this argument is useless , but I must point out as I always do the error you are making. Medicare like all socialist dreams is based on cost shifting. Those on it are not paying the true cost of their benefits. Like that other New Deal wonder program SS, only a select group can be on it while the cost is shifted to the rest of us who are not on it, , , Yet. When all of us get on it, it will collapse as ObamaCare is doing.

    You guys love science. Well you know what, demographics and mathematics are sciences too. The demographics and therefore the math are against your arguments. Now that the baby boom time bomb is going off all of these schemes are doomed to failure. The builders of these entitlements knew they would work well until they didn’t, like maybe now.

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    • Alan sadly has the right of it. Individuals may like the service they receive but system itself doesn’t work. It started failing many years ago due to changes in medical science and technology and that’s only being exacerbated by the changes in America’s economy.

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      • @jonolan,

        When I get older, losing my hair, many years from now
        Will you still be sending me a valentine, birthday greetings, bottle of wine?
        If I’d been out ’til quarter to three, would you lock the door?
        Will you still need me, will you still feed me when I’m sixty-four?

        Er, apparently not. 😢

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        • The Beatles? Really, Jim?!?!

          That Medicare doesn’t work as advertised and will just get worse economically doesn’t equate to a lack of care. It’s just a simple fact.

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    • You and jonolan just amaze me, Alan. Who do you guys think you are, Daniel Boone, alone on the prairie? Or maybe Robert Malthus? You should try living on an island by yourselves for a while.

      Every day you and the rest of us depend on one another for a vast network of social benefits. Police, firemen, courts, health and safety inspectors, municipal planning, safe roads and bridges, park rangers, military defense, and yes, Social Security and Medicare, just to name a few. You are living in deep socialism now, and I haven’t heard you say you intend to move away from it.

      The economic reality is that the collective labor of the broad middle class is what makes this country work for everybody, and that includes radicals like yourselves who seem to think, for example, that wall street financiers who get rich by cleverly manipulating the rules are somehow superior beings because of it. If the present trend of wealth inequality continues however, you and the 1% will find they are living in a depressing country with increasingly limited ways to spend all that lucre.

      Take Social Security, since you mention distrusting it, Alan. Even as it is, the fund is projected to be solvent for several more decades. Mandatory savings? You bet, a lot in that regard like that other shibboleth, ObamaCare, and its a blessing. If it had been privatized as you and George W. wanted a few years ago, everybody on it would have had their retirement crash with the market in 2008, but as it was, it provided just what its name says, real security for millions. And speaking from experience I can tell you what else it is for them: the salvation of dignity in old age.

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      • Thank you for that excellent point, Jim. I often wish that the people who constantly complain about having “a gun held to their head” to pay taxes didn’t use the services we all pay towards, like roads, police etc.

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        • Actually, it was a largely worthless point in the context that you’re applying to it. Few seem to complain about state level taxes and almost every one of the of those services are provided at the state or local level.

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          • Thanks, Eurobrat. Actually, many are federal benefits, jonolan. Apparently I need to be more specific. Just off the top of my head, for example: federal courts, the FBI, the Park Service, the Public Health Service, the CDC, the Coast Guard (not just oceans but inland waterways), the NTSB, the FAA, including air controllers, and not least, FEMA. Even the IRS, an under-appreciated, necessary agency without which government could not function. Doesn’t seem worthless to me.

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            • Jim – your comment above is terrific; it’s the counter argument in its entirely and should end any conversation about the pending socialist doom of the nation if everyone gets healthcare. And SS? I cannot imagine what my llfe would be like without SS and Medicare, even after working for 45 years and owning my house and having no debt. Without them . . . doesn’t bear thinking about.

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          • Actually, the conservatives I know complain about the state level taxes, too…so the point wasn’t worthless. Whether they’re federal or state services, the conservatives don’t seem to want to pay for them.

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    • [ Medicare like all socialist dreams is based on cost shifting. Those on it are not paying the true cost of their benefits]

      Alan, change the word Medicare to ‘health insurance” – same thing. Because the well pay for the sick, and we ALL pay for the uninsured.

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      • Ms. Holland,

        Those are very elegant thoughts. If you care care to do a reality check real Americans are losing their health insurance. If they get through the website they are experiencing sticker shock. They can’t afford to pay for the uninsured and the sick. It’s much worse than you can imagine.

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        • They can’t afford to pay for the uninsured and the sick.

          ‘Scuse me for butting in, Alan, but what you said needs to be addressed. Implicit in your statement is that healthcare is properly priced. Not in this country, it isn’t. We pay two to three times what it costs in other countries for the same or better outcomes.

          I am old enough to remember when most people didn’t have any kind of insurance and paid as needed, out of pocket. That system worked pretty well. The problem is that healthcare has now become not a practice but an industry, and it’s being managed for profit. It is a commodity for which the consumer does not shop and the only logical solution is for it to be regulated by government. The ACA is a step in the right direction, as Moe says. We must afford it, and we can, simply by budgeting more sensibly. We can start, as indeed we beginning to, by stopping nation-building, trying to be the world’s policeman, and ceasing to arm ourselves as though the Cold War were still on. The $24 Billion the shutdown cost the economy would have helped, also.

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          • Jim,

            Bare bones, does ObamaCare actually work? I say it does not. I say it does not because it cannot. Young people will not let themselves be used the way ObamaCare requires. Us old folks cannot abuse them forever.

            You will have to come up with an even longer list of things to sacrifice to make UCA work. The shutdown cost, nation building, defense. Go ahead, cut them to zero. You still will not have enough cha ching$ .

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            • No, you are wrong, Alan. It is more than possible.

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            • “does ObamaCare actually work? I say it does not.” Would that be the Obamacare that begins next year and isn’t in place yet? Boy, you’re some smart guy, Alan.

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              • Ms. Holland,

                Please, please you are giving me a swelled head. ObamaCare begins next year, hmmm? So how come so many folks are losing their health care now? Wait, wait, they are not losing it until January 1. That’s when their suddenly substandard health care is not renewed. You’re right it makes all the difference.

                Okay, do words matter? When a slick salesman promises you the moon and his words turn out to be false, does it matter? I mean all that matters is he made the sale, right?

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  7. Jim,

    You totally misread what I said. I agree that we are dependent on the rest of our fellow earthlings. I agree that old age should be lived in dignity. Do you think I don’t have elderly loved ones living on SS and Medicare? I am not blinded by ideology. SS and Medicare are merely structures invented to solve human problems. They are now beset with structural problems that will turn the young against the old. Denial of those problems, as has been done for decades is not constructive.

    I also do not hate ObamaCare just because it is named after my favorite President and I do not want the poor to die for lack of a doctor. I read up on how ACA was constructed. I just believe it is a terrible way to deliver health care.

    Since you brought up wealth inequality. May I point out that my favorite President has made that worse. You also totally misstated the privatization that my boy Georgie was pushing. First of all, those of us who did not panic in 2008 are doing just fine. Second of all the restrictions of who could do privatization and how much of their contributions they could put into the Wall Street casino were quite severe. They were not permitted to risk very much. Look it up.

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