Thursday, March 4, 2010

Opting out of healthcare?

Today's NY Times has an interesting column by sociologist Paul Starr on trying to buy conservative/libertarian votes on healthcare by giving people the choice of opting out if they sign a 5-year waiver on buying into the the plan. You can read it HERE. In other words, if you sign this waiver you don't need to purchase insurance, but if you get sick within 5 years you can't buy in and expect your illness to be covered. Starr himself thinks that taking this option would be foolish, but he acknowledges that there is widespread opposition to making health insurance mandatory.

I'm not going to pick a fight with a sociologist on why citizens oppose the Democratic healthcare bill. Some of the opposition may be based on not liking to be coerced, or a distrust of a complicated and poorly understood bill, or some distrust of "big government" based on decades of PTR propaganda. I don't know exactly; maybe Prof. Starr does.

However, he is totally wrong if he thinks that any change in the bill short of removing 90% of its provisions would create bipartisan support. Opposition to the bill from the PTR is based on the desire to kill any legislation by the Obama administration, or Democrats in general, that might be popular and be viewed as a [political] success. That is why the PTR is opposing nearly every bill that they don't originate (and many appointments). The Republican leadership threatens to fillibuster nearly everything. If they can't get the required 41 votes to do so, and the bill might be popular, they eventually sign on so as not to be perceived as being merely obstructionist. We just saw that in the last jobs bill where more Republicans voted to fillibuster it than eventually voted against it. As Obama pointed out, they oppose a bill, then, later, show up at ribbon-cutting ceremonies for projects that the bill established.

I would like to discuss Starr's idea of an opt-out provision. Please send comments to the blog, and we'll get back to it later. Once again, here's the LINK.

1 comment:

  1. I agree with you 100% that Starr's proposal isn't going to yield any bipartisan support (to be honest, I think Snowe would actually vote for the bill but fears being destroyed by her own party).

    I'm actually opposed to an individual mandate philosophically because I don't like government coercion (my Hayekian side is coming out I guess). But, the econ student in me says that unless we do single payer or universal health care, we have to have a mandate if we are going to force guaranteed issue. Since I think reform is more important than my Hayekian liberty philosophy (given the experience my family had to go through when I got cancer as a kid), I have to support a mandate.

    Now, whether Starr's plan would even be feasible depends on what assumption you make.

    If you believe that the young and healthy want insurance, but simply can't afford it then his plan would be identical to the current plan since they have the tax subsidies to afford it now and they wouldn't want to risk not being able to access healthcare.

    If you believe the young and the healthy don't buy insurance because they don't think they need it, then his plan backfires. Nobody likes discrimination against preexisting conditions, so we need guaranteed issue. That means we need an individual mandate to spread risk around, otherwise only sick people will sign up when they get sick. If you believe the first sentence of this paragraph then Starr's proposal pretty much eliminates the spreading of risk. Who's going to opt out? The young and the healthy. Who's not? The older and the sick. Risk isn't going to be spread about and insurance companies will be unable to finance themselves.

    Now, I believe the first assumption is more correct. However, the second assumption is certainly partially true. So, why even risk that the second assumption is more correct than I think it is and just go for the individual mandate entirely? In my view, it's far too risky that the second assumption might be right and the plan would backfire so better safe than sorry - plus, we aren't getting bipartisan support even with Starr's plan in place.