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Links With Your Coffee - Tuesday

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Streets of St. Paul were crazy last night. I was across the river, but you could see the craziness on the other bank. Reportedly they were arresting people for sitting on the wrong patch of grass.

"We cannot build on or tweak the present system. Different states have tried this. The problem is the private insurance industry itself.

Cry your salt tears to France, who has the best health care in the world, and which consists of a mixture of publicly funded and privately offered plans (although, to be fair, health care is mandated). I know that sounds like capitulation to the oh-so-evil "corporations", but...The left needs to acknowledge that there are serious trade-offs with the kind of socialized medicine available in Britain, particular for things like cancer treatment and extension of life issues. (N.B.: I am not claiming that current U.S. healthcare is better than in other countries, I'm saying we need to recognize the short-comings and trade-offs in all the available alternatives). On that note, it is completely misleading to appeal to what states have done in estimating costs and scope of coverage without qualification: individual states do not have anywhere near the same purchasing, bargaining, and regulatory power that the Federal government does, and that is not a trivial difference when we estimate costs and coverage. That is why it matters that the Federal government create a comprehensive program, not simply isolated states. Indeed, there is even a tacit acknowledgment of this fact in the following statement:

We see this on a smaller scale in the United States, where the Department of Defense is able to negotiate pharmaceutical prices that are 40 percent lower."

Well, gee whiz Wally, now why would that be? Surely it's not because the pharma industry generously lowed prices out of the goodness of their hearts, and decided to ignore their own profit margin. Also Obama's plan does regulate private providers by ensuring that they cannot deny coverage to those with pre-existing conditions. Then there's this little bit:

Obama's plan would also not cover all Americans. Unlike in Canada, citizens would not be enrolled in a plan automatically. Americans would have to go looking for one they could afford. And if they could not find one they would remain uninsured. Dr. Woolhandler, who is also a professor at Harvard Medical School, estimates that "tens of millions" of Americans would remain uninsured under Obama's plan. These numbers would swell as employers, who provide plans for 59 percent of those who are employed, continue to reduce coverage.

This ignore the fact that, with the exemption of small business with, say, under 20 employees, employers must provide insurance themselves under Obama's plan, or pay much higher taxes to fund the government plan (which will likely be the cheapest on the market because it is not being run for profit). Conversely, a tax credit is available to employers who do provide insurance. That, in my view, is the genius of the plan--it distributes cost across the government and private sector, and gives private employers a strong incentive in continuing to pay their part.

Obama's plan is, I admit, imperfect, as was Clinton's, which it quite closely resembles, and it will not cover everyone right away. But again, we get the typical I-hate-economics liberal argument, with the starry eyed idealism that somehow it's unworthy of us, for starters, to cut the number of uninsured from 47 M to, say, 10 - 20 million in the short term, while putting in place a good transitional program for the long-term (Unsurprisingly, the author also insists on "immediate and total" withdrawal from Iraq AND Afghanistan). There is at present none of the complicated infrastructure that would be required to institute a full-blown government-only plan, due in part to health care being ignored for so long. But Obama's plan gives us a first step toward putting that in place. It does not immediately institute a government monopoly on health care, because that is not now a serious short-term option, but it does try to motivate one by forcing the market itself to compete against a government-backed, not-for-profit program under much stricter regulation.

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