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Little Better, But No Worse

"The [health care] debate needs to be framed in terms of how it will help the typical household," writes Brad DeLong. Recall that during the campaign, the Obama administration did exactly that: Obama was constantly saying that his plan would “bring down premiums by $2,500 for the typical family.” But after he became president, he stopped saying that, largely because it doesn't seem to be true.

The problem is that his plan won't help the typical household unless something awful happens to that household. That's not a bug. It's a feature, at least of sorts. The White House has been very clear that health-care reform will not change the coverage that insured families currently receive. That was designed to assure Americans that reform wouldn't make their situation worse. But if you can't change what people have, it's hard to make it better, either.

By Ezra Klein  |  September 8, 2009; 12:32 PM ET
Categories:  Health Reform  
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Politico ( reports a comment that “Yes, some horror movies are doing well,” he says, “but not as well as ‘Star Trek’ or ‘Transformers,’ movies about truth, justice and the American way — with robots.”

Gene Roddenberry would be proud... his concept was a "wagon train to the stars" and he managed to get folks to watch morality plays wrapped up in futuristic excitement.

Likewise, the President has to overcome the fact that some people simply will not listen to the same-old-message... while still delivering (at least in part) that same-old-message.

Posted by: rmgregory | September 8, 2009 1:10 PM | Report abuse

"But if you can't change what people have, it's hard to make it better, either." But eliminating the caps, and the ability of insurers to drop or deny coverage, IS making is better. It also taps directly into many peoples greatest fears about insurance.

I have long thought that the only people who should be allowed to say if they like their insurance or not are those who have tested it in extremity. Heck, I like my insurance fine - but then I barely use it. I don't know how it would perform if I had a major claim. But I'll bet the 80% of the 750,000 people who go bankrupt from medical bills who also had insurance probably don't rate their coverage very highly.

Posted by: wvng | September 8, 2009 1:28 PM | Report abuse

The White House has been very clear that health-care reform will not change the coverage that insured families currently receive. IT WILL JUST COST YOU ALOT MORE! I can't imagine why their having all this trouble selling this.

Posted by: obrier2 | September 8, 2009 1:33 PM | Report abuse

I really think one of the big selling points is devastating risk, and I especially see this teaching one of the largest personal finance education courses in the country at the University of Arizona and as president of one of the largest personal finance education companies, National Personal Finance Education.

Here's a key statistic that should be mentioned much more:

1 in 3 Americans under 65 were without health insurance during some period in the last two years, in the period most recently measured, 2007-8.

Source: Families USA commissioned The Lewin Group to analyze data from the Census Bureau and the Agency for Healthcare Research and Quality, details at:

Why is the official figure 18%?

Because the official figure is only of people who have not had health insurance for all of the last 12 months. But that just doesn't fully capture the great risk that's pervasive in the U.S. as a result of our current health care system. Having no health insurance for any period over the last 12 months is very risky to both your financial security and your health. With the figure as high as 1/3, people who currently have health insurance should still be very concerned, even if not for themselves, for their children and other loved ones. And, of course, even with health insurance it's common to still be bankrupted by deductibles, lifetime limits, or the illness causing inability to work, then job loss, and with that insurance loss (COBRA, a big government requirement, only lasts 18 months and requires paying the full company insurance costs, even while unemployed)

So risk, insecurity, is huge, and that's what Obama's plan so improves, by making it so much harder to lose health insurance and not be able to get it again without lapse, by making it so that people can't become uninsurable due to pre-existing conditions, and so the cost can't be any higher due to pre-existing conditions.

Posted by: RichardHSerlin | September 8, 2009 1:47 PM | Report abuse

Right now a goodly portion of the healthcare premium that insured families pay is the cost shift from the uninsured. Hospitals, etc do not treat the uninsured "for free" any business, to the extent revenues are not covering expenses they have to raise revenues. Since they can not raise them on the uninsured, they raise them on those of us with insurance (mainly by not negotiating a better discount with the insurers). So we get everyone insured, we eliminate the cost shift, we reduce the pressure on our premiums. Is this $2500? No, that always seemed a stretch. But for those think reform will cost existing insureds more, you do not understand the mechanics of the 'system'

Posted by: scott1959 | September 8, 2009 1:50 PM | Report abuse

Obrier2, you're either an idiot or a shill for profit-mongers. What about 9% - 20% annual increases in healthcare premiums over the last decade do you not understand?

Ezra, that's the bottom line on reform for those of us with coverage; something awful has been and will continue to happen to the 'typical household'. If no reform takes place, the health-related personal bankruptcies will go up, employee-related premiums will skyrocket, and coverage will become more and more restricted to protect that 30% insurance-industry overhead cost on actual healthcare.

A friend from Britian shook his head at the whole 'no new taxes' mantra for universal coverage. "I'd rather pay my government than an insurance company executive" was his comment.

Posted by: Jaycal | September 8, 2009 1:53 PM | Report abuse

its interesting to note that hospitals in the past several years have looked to "break contracts" with insurance companies because of dwindling bottom lines in an effort to stay in business and increase their margins. I wonder if that will flip now with insurers looking to go after that uninsured money that isn't being paid to hospitals with a stronger contract so as to increase theirs that will be tightened with an 85% loss ratio.

Posted by: visionbrkr | September 8, 2009 2:12 PM | Report abuse

Unfortunately, a lot of the currently uninsured are going to feel like they are worse off under reform, since they are going to have to start paying for insurance out of pocket,probably with after tax dollars and a fair percentage will not be eligible for much in the way of subsidy. In addition, I suspect guaranteed issue and community rating are going to lead to an overall increase in premiums in the individual market, since the outrageous premiums the insureres charge now are based on screening out anyone who they believe might actually need a payout. I think there is a real risk of a backlash of the type that led to the repeal of Medicare catastrophic insurance.

There is going to be a big difference in what the government considers 'affordable' insurance (I have seen estimates that it would be up to 15% of your income) and what the average currently uninsured persons considers affordable. What most Americans really want is 'Lake Wobegon' insurance, where all the premiums are tiny, all the coverage is comprehensive, and all the payouts are above average.

Posted by: exgovgirl | September 8, 2009 2:18 PM | Report abuse

WVNG: You really need to read up on your statistics. The idea that 75% of US bankruptcies are caused by "medical bills" is total B. S. How do we know? Well, aside from the totally made-up Elizabeth Warren stats, here is some interesting info to chew on. The US had roughly 1 Million BR on an annualized basis in 2008-2009, or rounghly 1 for every 300 people (1/309.97 to be precise). Canada, that socialized medicine paradise, had roughly 131,000 BR on an annualized basis in 2009, or 1/244.1/ So Canada's BR rate is higher than ours. If 75% are related to medical expenses, and our trustworthy northern neighbors have $0.00 in medical expenses (not quite, but close enough) and 100% insurance rates, how can their BR rate be higher than ours?

The truth is Warren used social science fiction, counting as "medically related" any BR with any unpaid med bill included, no matter how small. Of course, these people had unpaid bills of all kinds, since they were BR! If truly 75% of our BR are caused by medical bills, you would expect our BR to be substantially higher (by the order of 4:1) than Canada's. Of course it is not, which means your claim is wrong.

Posted by: sgaliger | September 8, 2009 2:49 PM | Report abuse

Obrier2, you're either an idiot or a shill for profit-mongers. What about 9% - 20% annual increases in healthcare premiums over the last decade do you not understand?
My preimums haven't gone up that much and I doubt yours have either. Your just a shill for Obama, you just want a win. Get off the dope!

Posted by: obrier2 | September 8, 2009 3:03 PM | Report abuse


each individual's rates are going to be affected by how the rules and regulations are set forth in their specific state. Myself for example in NJ already have a loss ratio at 80% (and insurers this most recent year were at 85%) so they're not making egregious profits. We already basically have guaranteed issue for most people so the only thing we're missing is the fact that everyone needs to be covered to spread the risk around.

The mandate for us will make costs come down. Also people dont' realize that even in the most expensive states like mine you can get individual coverage for as low as $120 a month for a single person. NJ has basic and essential coverage that is catastrophic coverages that cover things first dollar too just not everything that a comprehensive plan covers. I'm sure your state does too if you look on their Dept of Insurance website.

Posted by: visionbrkr | September 8, 2009 3:30 PM | Report abuse

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