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Posted at 9:00 AM ET, 02/ 3/2011

The case for Wyden/Brown gets stronger

By Ezra Klein

As Dahlia Lithwick argues at Slate, I don't think anyone really knows where the Supreme Court will end up. But that's a point in favor of making contingency plans, not against. And it seems to me that the uncertainty over whether the individual mandate will survive into the final bill vastly strengthens the argument for the Wyden/Brown state waiver program.

If the Affordable Care Act isn't as stable as it could be, every state will want the power to modify the plan so it'll work better for them. Some will take advantage of that power by adding an individual mandate. Some will try out various conservative theories of how best to structure the bill. Some, like Vermont, will try to push towards single payer. And those that do nothing will act as a control group to a grand health-care policy experiment -- though not, I think, to the benefit of their residents.

In a world where Wyden/Brown passes and the Court changes the bill such that states have a strong incentive to take a waiver and make their insurance markets work better, the practical effect will be of making the legislation very similar to the federalist ideas I mentioned earlier in the week. I'm not sure that's a better world than the one the Affordable Care Act envisions, but it's not an obviously terrible idea. Conversely, in a world where the Court changes the bill but there's no waiver program, the law will just work much more poorly than would otherwise be the case, at least until the waiver program it already includes kicks in in 2017. Given that Wyden/Brown is a good idea anyway, this would seem to make passing it a no-brainer.

By Ezra Klein  | February 3, 2011; 9:00 AM ET
Categories:  Health Reform  
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Comments

What's the status of Wyden/Brown? Is there a head count of Senators willing to support it? Is it going before any committees? Now that full repeal has failed in the Senate, maybe the Republicans would be willing to consider a bill with targeted reforms. I know, I'm so skeptical of that that I had trouble typing it, but one can hope. Nobody ever said the PPACA was perfect, and a bill with some fixes and tweaks would be something I think most Dems could get behind, depending on what the Republicans demanded be included.

Posted by: MosBen | February 3, 2011 9:35 AM | Report abuse

"Given that Wyden/Brown is a good idea anyway, this would seem to make passing it a no-brainer."

Sorry to sound so cynical, but that generally makes something unpassable.

Posted by: Fishpeddler | February 3, 2011 9:44 AM | Report abuse

And those that do nothing will act as a control group to a grand health-care policy experiment -- though not, I think, to the benefit of their residents.

And why is that? Why would the status quo of PPACA (not the status quo of pre-PPACA) be considered a detriment?

Posted by: visionbrkr | February 3, 2011 9:46 AM | Report abuse

Slightly off topic, but I'm really surprised the Maine twins voted for full repeal, especially Snowe, who's up for re-election in '12. Do they want to allow insurance companies to discriminate based on pre-existing conditions? Do they want ollege graduates struggling to find jobs in a difficult market to not be covered by their parents' plans? If Snowe thinks a rightward turn will help her in a primary, she's sorely mistaken. She needs every independent and moderate vote she can get, plus some Democratic ones.

Posted by: scarlota | February 3, 2011 9:49 AM | Report abuse

Buy your own insurance, or pay for your own care.

Make affordable care legal by relaxing the regulations that guarantee unsustainable levels of diminishing returns in healthcare quality.

Posted by: whoisjohngaltcom | February 3, 2011 10:13 AM | Report abuse

I wouldn't want to work in an HR department coordinating 50 different sets of health plans.

Posted by: RZ100 | February 3, 2011 10:13 AM | Report abuse

"Do they want to allow insurance companies to discriminate based on pre-existing conditions? Do they want ollege graduates struggling to find jobs in a difficult market to not be covered by their parents' plans?"

No, they want the market to be permitted to function again.

We'll all be much happier trying your utopian socialist approach after we've tried the free market. And with medicine regulated the way it is, along with government paying for more than half of all current care, don't even pretend that this is a free market.

Posted by: whoisjohngaltcom | February 3, 2011 10:15 AM | Report abuse

I wouldn't want to work in an HR department coordinating 50 different sets of health plans.

Posted by: RZ100 | February 3, 2011 10:13 AM | Report abuse


You wouldn't have to. As an HR representative healthcare is based upon the rules and laws of the state where the employer is headquartered. Its not (and never has been) 50 sets of rules for employees that live in 50 different states.

Posted by: visionbrkr | February 3, 2011 10:21 AM | Report abuse

Sorry, dudes, I have a child with a neuromuscular disease, on life-support machines, and my private insurance pays virtually nothing for his care. They've even cut coverage of some of the basic medications he needs to live. Why? Because he's one of the expensive cases, and private insurers only want to insure healthy people.

Fortunately, I live in an affluent state with a strong commitment to children like my son, willing to step in when the free market fails our children. As it does, again and again.

Posted by: scarlota | February 3, 2011 10:35 AM | Report abuse

Wonderful. So a state like Texas will continue to have a huge percentage of its citizens without access to health care. At some point such a state will have to be dragged to the trough. They'll never do it themselves, mortality rates be damned.

Posted by: leoklein | February 3, 2011 11:26 AM | Report abuse

@whoisjohngaltcom:

"No, they want the market to be permitted to function again."

We have a large free market healthcare system; the individual market. Its catastrophic failure is the foremost reason that the vast majority of Americans wanted healthcare reform in the first place.

"Free market" healthcare systems don't work, at least not in a way that more than 3-4% of Americans would prefer.

Posted by: eggnogfool | February 3, 2011 12:01 PM | Report abuse

eggnofool,

while that's true i don't know that I'd call the individual market large. As per Wikipedia it states that the individual market is 9% of the overall healthcare market.


http://en.wikipedia.org/wiki/Health_care_in_the_United_States

Its failures are due to many issues one of which is the adverse selection and the lack of a mandate.

I'd love to know where you get that statement that "Free market" healthcare systems don't work, at least not in a way that more than 3-4% of Americans would prefer.


Everything I remember hearing around the beginning of the healthcare debate was that 80-85% of people liked their coverage they just wished it cost less.


Below is a link that shows a JD Power survey that shows the average around 70% satisfaction rate, not nearly the 3-4% you claim.

http://www.jdpower.com/healthcare/articles/2009-Health-Insurance-Plan-Satisfaction-Study/

Posted by: visionbrkr | February 3, 2011 12:35 PM | Report abuse

This plan merely moves the freeloader option from the individual to the state level. We'll all end up subsidizing Texas and Mississippi, more than we do already.

Posted by: Frank43 | February 3, 2011 12:53 PM | Report abuse

@visionbrkr:

"Everything I remember hearing around the beginning of the healthcare debate was that 80-85% of people liked their coverage they just wished it cost less.

Below is a link that shows a JD Power survey that shows the average around 70% satisfaction rate, not nearly the 3-4% you claim.

http://www.jdpower.com/healthcare/articles/2009-Health-Insurance-Plan-Satisfaction-Study/"

People are generally satisfied with the health insurance they get through their employer. People are generally staisfied with their Medicare. People are, in fact, fairly happy with Medicaid, when they qualify. None of these are "free market" portions of our system; they are the specific portions of the system that are distorted by government intervention, which is exactly my point.

My "3-4%" refers to the % of people who would like/prefer the new "free market" system, after government pulled out of employer coverage subsidies (which would result in near universal dumps of employer sponsor coverage), medicare, and medicaid. In the free market system, we'd all be in the individual market. Which would operate as usefully as it does now.

You note that less than 10% of Americans purchase individual insurance; but the full "individual market" should include all those who cover their own individual health care costs. Which amounts to 25% of Americans; 60% of whom have said "F that" to the insurance options available in the "free market".

Posted by: eggnogfool | February 3, 2011 1:13 PM | Report abuse

visionbrkr, the status quo of the PPACA is not a detriment to people based on what came before, but nobody ever said it was perfect. States that stuck with the PPACA status quo would be doing a good thing for their residents compared to where we were in 2005, say, but wouldn't be doing them any favors if there are ideas out there that can provide universal, or near-universal, coverage with a higher quality of care and lower costs. The PPACA was a step forward, but it wasn't the last step forward.

Posted by: MosBen | February 3, 2011 1:29 PM | Report abuse

"No, they want the market to be permitted to function again.

We'll all be much happier trying your utopian socialist approach after we've tried the free market. "

Yeah, yeah, everything will be peachy keen once we manage to create perfectly free markets, just like how many physics problems will be a piece of cake when everything occurs in a frictionless vacuum. But physicists and engineers have to operate in the real world. Free market utopians and libertarians need to learn to operate in the real world as well.


Posted by: Fishpeddler | February 3, 2011 2:01 PM | Report abuse

@Fishpeddler:
"Free market utopians and libertarians need to learn to operate in the real world as well."

Actually, not so much. "Free market health insurance" doesn't work even in some abstract ideal case; the considered libertarian position is that health insurance in fact requires government to work, and is therefore evil and shouldn't exist in a functional way.

http://mises.org/freemarket_detail.aspx?control=279

Basically, deregulate a bunch of things, give up on insurance, and make sure you don't get sick.

I agree with them that this would reduce national health care spending, but I maintain my position that only a very small minority would prefer such a system over our current one, clunky as it is.

Posted by: eggnogfool | February 3, 2011 2:54 PM | Report abuse

"the considered libertarian position is that health insurance in fact requires government to work, and is therefore evil and shouldn't exist in a functional way."

eggnogfool,

I don't see you how you reach that conclusion from the linked article. Insurance works just fine, provided you understand insurance to be a hedge against unpredictable risks.

Posted by: justin84 | February 3, 2011 4:57 PM | Report abuse

@Justin84:

"many, if not most health risks, are actually uninsurable [in libertarian utopia]"

Insurance is a hedge against "unpredictable risk", but healthcare costs are almost universally predictable to some extent, and therefore 'health insurance' is an oxymoron to libertarianism.

Posted by: eggnogfool | February 3, 2011 5:23 PM | Report abuse

"Insurance is a hedge against "unpredictable risk", but healthcare costs are almost universally predictable to some extent"

For a single individual? I disagree. Not for most diseases. You can estimate a probability of occurrence given risk factors but that doesn't mean you can accurately predict the claims of that individual. Claims are only universally predictable for a group of individuals. As long as the probability of a claim for a given disease is reasonably low over the coverage period, the risk is insurable.

If you are cancer free today, you really have no idea whether or not you'll have cancer tomorrow, a year from now or 10 years from now. Neither you or the insurance company knows whether or not you'll get a certain form of cancer, nor how much your claims will cost if you do. If you spend all your time smoking and in tanning beds, your probability of developing cancer goes up, but it's still insurable - you just have to pay higher premiums.

Some people have preexisting conditions or extremely high risks for certain conditions and obviously they won't be able to get insurance in a free market - at best they'd be buying something akin to a prepaid health plan (though they could insure themselves against some other conditions). Insurance doesn't work for them. But the government can't make insurance work for them either. The government might pay or force others to pay their bills (which under a system of taxation is the same thing), but then that is income redistribution, not insurance.

Posted by: justin84 | February 3, 2011 11:07 PM | Report abuse

but healthcare costs are almost universally predictable to some extent, and therefore 'health insurance' is an oxymoron to libertarianism.

Posted by: eggnogfool | February 3, 2011 5:23 PM | Report abuse

about 75% false here. data shows that 75% of healthcare costs come from chronic diseases such as diabetes, heart disease which are preventable with diet in a good number of cases. But again if everything is covered in full by insurance (or government) in a liberal utopia then a large financial incentive is taken away. That's why the Safeway model works.

Posted by: visionbrkr | February 4, 2011 8:14 AM | Report abuse

"Insurance is a hedge against "unpredictable risk", but healthcare costs are almost universally predictable to some extent"

Which is why what you want is not insurance at all, but rather socialism.

Posted by: whoisjohngaltcom | February 4, 2011 9:20 AM | Report abuse

@whoisjohngaltcom:
"Which is why what you want is not insurance at all, but rather socialism."

What I want is a functional health insurance system that provides insurance meeting the definition you might find in a dictionary,
"coverage by contract in which one party agrees to indemnify or reimburse another for loss that occurs under the terms of the contract."
as opposed to insurance meeting the definition you would get from a libertarian, which isn't viable.

Also, socialism is defined as:
"an economic and political theory advocating public or common ownership and cooperative management of the means of production"
which cannot reasonably be construed to include the establishment of federal guidelines for private health insurance implementation.

What I am advocating is federal "establishment" of "standards", "regulation" of the "commerce" "among the several states", and making all "necessary and proper" laws for the execution of this, all with the intent of benefiting pragmatic utilitarian ends, or, if you prefer, "the general welfare."

Posted by: eggnogfool | February 4, 2011 11:50 AM | Report abuse

"Also, socialism is defined as:
"an economic and political theory advocating public or common ownership and cooperative management of the means of production"
which cannot reasonably be construed to include the establishment of federal guidelines for private health insurance implementation."

In other words, instead of legally owning private companies, the government strutures the market, tells individual firms how they may operate, claims entitlement to a portion of all current and future profits via taxation and, if the firm is big enough, will step in the way of losses to keep the firm operating.

Those are all things owners tend to do. I say the public ownership requirement is sleight of hand. If my use of an object is restricted by another man, and I must pay him simply to continue claiming ownership (one might describe such payments as rent), then I say I don't really own that object.

Direct ownership isn't always the goal of those who claim the socialist mantle.

Consider Fabian Socialism. Many policy preferences of modern liberals appear similar to the activities of the Fabian socialists in the early 1900s:

"The first Fabian Society pamphlets advocating tenets of social justice coincided with the zeitgeist of Liberal reforms during the early 1900s. The Fabian proposals however were considerably more progressive than those that were enacted in the Liberal reform legislation. The Fabians lobbied for the introduction of a minimum wage in 1906, for the creation of a universal health care system in 1911"

http://en.wikipedia.org/wiki/Fabian_Society

A book in the UK entitled "Future of Socialism" written by a member of the Fabians half a century ago argued that public ownership is but a means, not an end, of socialism.

"A central argument in the book is Crosland's distinction between 'means' and 'ends'. Crosland demonstrates the variety of socialist thought over time, and argues that a definition of socialism founded on nationalisation and public ownership is mistaken, since these are simply one possible means to an end. For Crosland, the defining goal of the left should be more social equality. Crosland argued that ."

http://en.wikipedia.org/wiki/The_Future_of_Socialism

Posted by: justin84 | February 5, 2011 11:39 AM | Report abuse

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