Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
In his column in today's New York Times, Paul Krugman frames what I take to be one of the two central questions before the high court. (I'm hoping to get to the second in a post this weekend.) Could the masters of close reasoning around here take a look, then let the rest of us know a good, succinct, and proper
answer?
Here goes:
[W]hen people don’t buy health insurance until they get sick — which is what happens in the absence of a mandate — the resulting worsening of the risk pool makes insurance more expensive, and often unaffordable, for those who remain....
There are at least two ways to address this reality — which is, by the way, very much an issue involving interstate commerce, and hence a valid federal concern. One is to tax everyone — healthy and sick alike — and use the money raised to provide health coverage. That’s what Medicare and Medicaid do. The other is to require that everyone buy insurance, while aiding those for whom this is a financial hardship.
Are these fundamentally different approaches? Is requiring that people pay a tax that finances health coverage O.K., while requiring that they purchase insurance is unconstitutional? It’s hard to see why — and it’s not just those of us without legal training who find the distinction strange. Here’s what Charles Fried — who was Ronald Reagan’s solicitor general — said in a recent interview with The Washington Post: “I’ve never understood why regulating by making people go buy something is somehow more intrusive than regulating by making them pay taxes and then giving it to them.”
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Comments:
Feb '12
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
OK, at the risk of appearing dense, I'm going to ask this, because I really need a simple answer.
Medicare is funded by a "tax", therefore is constitutional.
Obamacare is funded by a "mandate", therefore is unconstitutional.
Is that the distinction?
Oct '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
maureen dirienzo:
Medicare is funded by a "tax", therefore is constitutional.
Obamacare is funded by a "mandate", therefore is unconstitutional.
Is that the distinction?
I think that is the distinction-which Krugman seems not to understand. Economically it's a pointless distinction. Legally it is a significant distinction because of the Constitution.
Interestingly, I've heard that there's no punishment in Obamacare for not buying insurance or paying the mandate. Maybe that's a question that should be looked at because then you still have a free-rider problem and adverse selection. Those who are young and healthy with no benefit to gain from insurance won't buy it.
Oct '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
"W]hen people don’t buy health insurance until they get sick — which is what happens in the absence of a mandate..."
I'm not a master of close reasoning, but the quote above seems to be a patently false premise. Do healthy people have health insurance today? And have they for years and years? Yes and yes.
Thus, plenty of people exercise personal responsibility by buying health insurance BEFORE they get sick. Plenty. Like millions and millions. The uninsured in America is a fraction of our population.
We don't need a mandate in order for us to buy health insurance, because most of us already do, and have for years, absent a mandate. And the relative few who don't do not appreciably increase the cost for the rest of us.
Oct '11
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
In logic, Krugman is using what is called the fallacy of the false dilemma that is often used by politicians and parents. Parents might say "Do you want to go to bed or get a spanking?" There are other choices such as staying up and getting ice-cream.
Politicians might say we have to give women free contraceptives, sterilization, et. al. or we are denying women these services. There are other options than the two given.
To break out of Krugman's false dilemma a third option is needed. I tend to favor the Heritage Foundation plan. It takes a holistic approach that brings market forces to bear and leaves decision making with the individual citizens. Check it out at:
http://www.savingthedream.org/about-the-plan/plan-details/
Jun '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
dittoheadadt:"W]hen people don’t buy health insurance until they get sick — which is what happens in the absence of a mandate..."
I'm not a master of close reasoning, but the quote above seems to be a patently false premise. Do healthy people have health insurance today? And have they for years and years? Yes and yes.
True, but that might all change under Obamacare. One of the central pillars of the law is that it prohibits insurance companies from "discriminating" against people with pre-existing medical conditions.
Prior to Obamacare, if you went to your doctor, found out you had cancer, and then decided to buy an insurance policy, the insurance company could either charge you a higher rate, or turn you down altogether. Under Obamacare, they must sell you a policy at the same rate they charge all their other healthy customers.
The mandate attempts to solve a new problem created by Obamacare, not an existing problem. Even the government's lawyers said this to the Supreme Court this week.
Oct '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
Midget Faded Rattlesnake
He is using logical sleight of hand here, acknowledging that there are "at least two ways to address this reality" and then describing only two, when a third way should be obvious to anyone (even a snake) with a rudimentary understanding of insurance:
Insurance buyers with pre-existing conditions pay more into the pool (to cover their greater risk), get less out of the pool (because they're uninsurable for certain conditions), or some combination of both. In the extreme case, they're totally uninsurable.
We park on streets narrow enough that passing cars routinely whack off people's sideview mirrors. It's our auto-insurance's business to charge us accordingly. · 4 hours ago
Edited 2 hours ago
Except this argument doesn't work in practice. People do find ways to insure the sick: they ask their employers to put all of their coworkers into the same pool, which will have a much better risk profile. That's how the vast majority of Americans get their healthcare, through their employer.
Jun '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
bereket kelile
Interestingly, I've heard that there's no punishment in Obamacare for not buying insurance or paying the mandate.
The penalty or fee or whatever they call it for not buying insurance is collected by the IRS along with your income taxes. It's basically a tax, they just don't call it that for political reasons.
So I would imagine if you don't pay it, the same thing would happen as if you don't pay your income taxes. Namely, the IRS will add on interest and penalty payments and eventually start garnishing your wages.
Oct '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
Fastflyer:
To break out of Krugman's false dilemma a third option is needed. I tend to favor the Heritage Foundation plan.
Remember Heritage invented the mandate. Their new, preferred approach is:
Let me translate. Economically, this is nearly identical to the mandate, but avoids the unpleasantness of the government telling people what to do. Instead, citizens will be "guided" to make the right choices by benevolent government-made incentives.
Heritage's "alternative" is more Wilsonian and technocratic than the mandate is. The mandate isn't bad policy; it's the other 1,999 pages of ObamaCare that is.
Edited on March 31, 2012 at 2:32amJun '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
maureen dirienzo:
Medicare is funded by a "tax", therefore is constitutional.
Obamacare is funded by a "mandate", therefore is unconstitutional.
Is that the distinction?
No.
Congress has enumerated powers. It can only do things the Constitution authorizes it to do. Even the liberal justices agree, they just define those powers very broadly.
Congress has the power to tax incomes, and collect other specific types of taxes.
Congress also has the power to regulate interstate commerce.
Obamacare mandates that everyone must buy a health insurance plan that meets minimum requirements set by HHS (including contraception coverage etc.). The administration claims that forcing you to buy insurance is a regulation of interstate commerce. They also claim it is an exercise of the taxing power (even though they also claim it's "not a tax increase"). If the Court accepts either of those claims, the mandate is Constitutional.
Make sense?
Nov '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
Because as someone with an annual income of -$25,000 (yay, school!) my tax burden is rather less than what it would cost me to go out and buy insurance.
Aug '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
Joseph Eagar
Midget Faded Rattlesnake
Insurance buyers with pre-existing conditions pay more into the pool (to cover their greater risk), get less out of the pool (because they're uninsurable for certain conditions), or some combination of both. In the extreme case, they're totally uninsurable.
Except this argument doesn't work in practice. People do find ways to insure the sick: they ask their employers to put all of their coworkers into the same pool, which will have a much better risk profile.
First, my description never said there aren't ways to insure most sick people.
Secondly, I described how insurance works in the abstract -- as insurance (as opposed to something else). I framed it in the present-tense, rather than some counterfactual mood, for brevity.
What we get through work isn't real insurance, but health care plans with much included that isn't, properly speaking, insurance at all.
Also, when a workplace adopts a new health plan, everyone is thoroughly interviewed about health issues. The health plan may treat all workplace employees as an aggregate individual, but the information gathered about us must relate to a risk pool somehow. Else why would it be collected?
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
Peter, to answer this required a full-length post. See above.
Oct '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
Midget Faded Rattlesnake
First, my description never said there aren't ways to insure most sick people.
Secondly, I described how insurance works in the abstract -- as insurance (as opposed to something else). I framed it in the present-tense, rather than some counterfactual mood, for brevity.
What we get through work isn't real insurance, but health care plans with much included that isn't, properly speaking, insurance at all.
You are correct that health insurance isn't real insurance; it's a tax-privileged savings vehicle with an insurance component. This is the problem: the public demands health insurance be provided as a public good.
Luckily for us, they also demand that the administration of it be provided in a competitive market. But it's important to understand that the public--through both market and political mechanisms--are demanding healthcare as something more than insurance. This is driven as much by the market as by politics, which is why going back to a traditional insurance model is impossible. It's not the free market thing to do.
Jul '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
Professor Rahe rocks.
Aug '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
Joseph Eagar
But it's important to understand that the public--through both market and political mechanisms--are demanding healthcare as something more than insurance. This is driven as much by the market as by politics, which is why going back to a traditional insurance model is impossible. It's not the free market thing to do.
Well, of course health care is way more than health insurance. In fact, health "insurance" (or health plans, as I'd rather call them) is simply an option for financing health care, albeit an option that many people are afraid to do without.
I'm not yet convinced that if the market were allowed to be more competitive (if your plan followed you, not your job; if people didn't have mandates forcing them to purchase coverage that they didn't want; if you could buy across state lines...) that more traditional health insurance products would fail to re-emerge.
At any rate, HSAs paired with high-deductible policies that more closely resemble catastrophic coverage have been gaining in popularity. The Healthy Indiana plan, which subsidizes HSAs for the poor instead of Medicaid, seems to be doing pretty well.
May '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
Paul Rahe can do it eloquently in unlimited words. I can do it simply, in less than 100:
Yes; they are fundamentally different. The answer is not economic, it is political.
The federal government is empowered to do only what we the people empower it to do. The federal government is empowered by us to tax us to pay for those things we determine ought to be done. We did not give the government permission to do what Obamacare does; the hoops that had to be gone through to get passage are proof of this. The government does not have the power to force us to do anything to which we have not agreed.
Aug '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
At least he said "at least" two ways. There is a third: people can pay for their own health care. This debate seems to begin with the assumption that no one can afford to pay when something really bad happens to their health, when the truth is that a lot of people actually can.
I've long thought that the way the government should deal with people who suffer extraordinary medical bills which they can't pay isn't to make hospitals treat them anyway, and let them try to pass the cost on to others (a surreptitious insurance function), but to have the government pay the bills, and then treat that as a debt that the IRS can collect via a signficant tax increase on that person's family, perhaps 20%. Call it "post-insurance".
Feb '12
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
Reply to #49 Mr Stanko--Thank you, I see the distinctions you make.
So regarding Medicare, Congress taxes income and takes that revenue to create a medical payer system for people 65+. If I understand that correctly, then that means Congress also has the authority under the constitution to create a medical payer system. True? If so, from where does that authority come?
So Obama could have just created Medicare for everyone, but that would have meant a huge tax increase and a single payer system. But that would have been too big of a step at once, although that is probably his ultimate goal. Do I have this right? Thanks.
May '10
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
Maureen: Yup.
Dec '11
Re: Calling Mssrs. Epstein, Yoo and Rahe, Or, Paul Krugman Asks a Good Question
John Murdoch:
1. People do not buy health insurance when they are sick. They go to doctors, or to the emergency room.If they have to go to the doctor, they'll pay the bill.
2. If/when somebody buys health insurance, they buy a plan. Very few single men buy health insurance plans that provide maternity coverage. Lots of people don't buy plans that provide unlimited psychiatric care.
The reality is that when uninsured people go to the ER, it costs taxpayers tens of thousands of dollars. Recent personal example: somebody in my community had to undergo a minor emergency procedure and incurred a $55,000 dollar bill. Uninsured and undaunted, she crowed, "The hospital told me I could apply for Medicaid." This individual is a 30-something with no pre-existing conditions and can afford health insurance; the pure audacity of her assumption unnerved me.
John McCain and Jon Kyl have endorsed interstate insurance plans that will allow buyers to personalize their coverage. But I doubt that will help if all people in all age-groups don't start looking upon healthcare as a personal responsibility as opposed to a "right."