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One Flowchart to Rule Them All

Excellent work from Nick Beaudrot, who boils health-care reform down to a single flowchart:

hayes_flowchart.PNG

One of the stranger wrinkles of this debate has been that the things people are scared of are not things that the bill is doing. Death panels? Nope. Stupid in the most obvious ways. "A government program that determines if you're going to pull the plug on grandma," as Sen. Chuck Grassley warned? Nope. Particularly given that Chuck Grassley is one of the people writing the bill. Government takeover? Nope. Most of us can't even buy into the public plan. If there even is a public plan. The reason insurers support the bill is it does much more to strengthen them than it does to weaken them. Rationing? Nope. The reason the plan doesn't save much money is that it contains literally no provisions that will change the way a doctor prescribes care.

You could imagine opposition to this bill because a small slice of the rich doesn't want to pay new taxes, or because it doesn't save enough money, or because it isn't a single-payer proposal. All those things are true. But instead, you've had an argument between people who support the bills being considered by Congress and people who oppose the bills that they have made up.

Update: It looks like the bottom has it reversed; if you don't make more than three times the poverty line, you get subsidies. If your income exceeds that, you don't get subsidies. But you get the point. This stuff is simple, and people are complicating it needlessly.

By Ezra Klein  |  August 17, 2009; 1:07 PM ET
Categories:  Charts and Graphs , Health Reform  
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Comments

Setting aside the non-surprising conclusion that most people are stupid, you seem to ignore the rather major point that this reform won't save us all that much money unless we include something like a Medicare Panel in charge of negotiating better prices for drugs or various standard medical procedures. It's very important to lower health care costs now, as this graph amply demonstrates. http://www.calculatedriskblog.com/2009/08/health-care-spending-and-pce.html

Posted by: besmit02 | August 17, 2009 1:19 PM | Report abuse

The chart is incomplete and dishonest. In the event one has employer-provided insurance she may find herself dumped into the pulic option plan if her employer determies it would be financially advantageous to do so.

Also, this chart only shows how the alleged benefits will be apportioned, it doesn't show how and by whom the added expense will be borne.

Posted by: tbass1 | August 17, 2009 1:23 PM | Report abuse

Is that last diamond incorrect? Shouldn't it be "Income below 3x poverty line" or shouldn't the "yes" and "no" be switched?

Posted by: rpy1 | August 17, 2009 1:23 PM | Report abuse

ezra,

employer sponsored insurance with only 122 million? his numbers are off. I thought it was 170 million??

either way he doesn't take into account employee dumping into a public plan if one is to exist. I'm in the Northeast and you can't tell me that owners of companies won't dump employees if allowed to (haha 8% tax)

an employee making $50,000 a year. Pay $4,000 tax.

an employer contribution to family coverage at 70%. Family rate is $13,000 per year. Total cost to employer: $9,100.

Let's see would i rather pay a $4000 tax or $9,100 and have to manage a healthplan and deal with my employees griping to me about it.

HELLO PUBLIC OPTION.

Yes in lower income states this won't happen but you'll have to adjust that 8% for regional variances in income. What's 8% in the Northeast isn't 8% in the South.

Posted by: visionbrkr | August 17, 2009 1:27 PM | Report abuse

this chart isn't quite right. Almost...

No one is forced onto the public option. No one. It is merely one option in the health insurance exchange where individuals would choose their coverage. Employers don't pick, people without insurance or those in small businesses that want to offer insurance through the exchange.

Subsidies would go to buy insurance for any option, not just the public option.

Posted by: gonzosnose | August 17, 2009 1:33 PM | Report abuse

visionbrkr and tbass1:

Employers can drop employer coverage today with a 0% tax. Why would dropping coverage would be a better deal for companies under this plan than it is today?

Posted by: rpy1 | August 17, 2009 1:35 PM | Report abuse

rpy1:

"Employers can drop employer coverage today with a 0% tax. Why would dropping coverage would be a better deal for companies under this plan than it is today?"

Because the employer can credibly claim to have traded like-for-like and then either pocket the difference or use the proceeds to pay for some other employee benefit that would advantage him/her in the market for employees. The important bit is that, ultimately, the choice is the employer's, not the individual employees'. So Obama is wrong to claim, as he repeatedly has, that everyone who is happy with their current employer-provided insurance could keep it. Of course, if we were to apply Ezra's definition we would say that he is "lying" but I prefer to reserve judgement. Perhaps he just misunderstands how the plan would work in practice. Certainly many Dems who support the public option are counting on it crowding out private insurance over time.

Posted by: tbass1 | August 17, 2009 1:51 PM | Report abuse

The last diamond is wrong. The labels for the subsidized and unsubsidized blocks should be switching around.

Posted by: fkooyman | August 17, 2009 2:18 PM | Report abuse

"In the event one has employer-provided insurance she may find herself dumped into the pulic option plan if her employer determies it would be financially advantageous to do so."

Again, you're talking about a bill that doesn't exist. And in any case, employers are already free to force a cheaper plan on you or dump their contribution to your coverage altogether. If the free marketeers got their way, the ability of employers to dump people from insurance coverage would only be enhanced, not weakened.

Posted by: bluegrass1 | August 17, 2009 2:20 PM | Report abuse

Yeah, Ezra, fetch the new version of Nick's chart, it corrects the last diamond like fkooyman said.

Posted by: bluegrass1 | August 17, 2009 2:21 PM | Report abuse

"So Obama is wrong to claim, as he repeatedly has, that everyone who is happy with their current employer-provided insurance could keep it."

There's no guarantee they can keep it right now. Everyone who tries to make your argument seems to miss that fact. The free market is the surest way to get millions of people dumped form employer coverage over the next ten years.

Posted by: bluegrass1 | August 17, 2009 2:24 PM | Report abuse

tbass, I just don't see it this way. If we were looking at Wyden, where the tax benefits for companies to provide health care went away, then I'd agree, but as it is health benefits are a way for companies to provide additional compensation tax-free.

Posted by: rpy1 | August 17, 2009 2:31 PM | Report abuse

"This stuff is simple"

No, it's not. Just because Grassley lies doesn't mean you have to.

Posted by: ostap666 | August 17, 2009 3:09 PM | Report abuse

ostap666, how about, "This isn't nearly as complicated as detractors make it seem?" or "The specifics of any large piece of legislation are complicated, but the general policies being proposed are pretty easy to understand."?

Posted by: MosBen | August 17, 2009 3:27 PM | Report abuse

What about Obama's plan to cut funding for Medicare Advantage and HSAs?

I have a question on Medicare Advantage. Isn't the care better than Medicare? Does it really cost more, given that Part D is enmeshed in Part C?

Posted by: Dellis2 | August 17, 2009 4:02 PM | Report abuse

Assuming the bottom pair is reversed: no wonder the insurance companies are okay with reform. They get 25 million new customers, paying for unsubsidized insurance as mandated by the government. Nice deal.

Posted by: Ulium | August 17, 2009 5:01 PM | Report abuse

visionbrkr and tbass1:

Employers can drop employer coverage today with a 0% tax. Why would dropping coverage would be a better deal for companies under this plan than it is today?

Posted by: rpy1 | August 17, 2009 1:35 PM | Report abuse

well let's see, an employer can't drop coverage if the EMPLOYER wants coverage.

Lets say Tom is the employer and Mary and Kim are his employees. Tom can't get small group coverage (much preferable to individual in every state) if Mary and Kim aren't covered either under his plan or another qualified plan. So in effect he DOES HAVE TO COVER THEM if he wants coverage himself.

If under a public option that's structured like it seems it will be an employer can drop coverage for some. I know the details haven't totally come out yet but what's to stop a large employer from dropping his sickest employees into the public option thus keeping his costs down and increasing the public option? There should be safeguards to that I would expect but most of these legislators are honestly kind of dumb or old or both.

Posted by: visionbrkr | August 17, 2009 5:01 PM | Report abuse

************
I know the details haven't totally come out yet but what's to stop a large employer from dropping his sickest employees into the public option thus keeping his costs down and increasing the public option?
************

visionbrkr, I agree that any bill needs to make sure that the same restrictions apply as seem to today to keep employers from dumping the sickest folks into the exchange.

Posted by: rpy1 | August 17, 2009 5:06 PM | Report abuse

Dellis2,

your question on HSA's is particularly concerning to me as I've had an HSA for years and they're talking about doing away with them. I had been doing well and building my HSA fund by staying healthy, eating well, and I have about $14,000 in my HSA for either healthcare costs in the future up to my maximum cost or as a supplemental retirement plan.

I'm guessing Obama is against HSA's and those of us that stay healthy with them. I haven't seen this talked about nearly enough but that had better get stripped out of the bill come September. Its one thing to try to reduce cost but when you're adding things in that are proven to increase cost?? Why can't those of us that are smart to understand how HSA's work have them? Do we have to be dumbed down to American average levels??

Posted by: visionbrkr | August 17, 2009 5:06 PM | Report abuse

rpy1,

agreed. I have large clients of mine that have asked me for the names of the 3-5 largest claimants if we could provide them (we can't by HIPAA law and won't.) so that he could fire them. You don't think those same employers wouldn't dump them onto the public option?? At some point these people that live in theory have to come out and see how the real world lives.

Posted by: visionbrkr | August 17, 2009 5:08 PM | Report abuse

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