Health Care Stuff

by publius

Both Von and Mark Thompson have raised some substantive critiques of the Democratic health care plans. So let’s address them.

First, Von argues that small businesses will be hurt by the employer penalty – basically the fee companies must pay if they don’t provide coverage. If your payroll is $400,000, you have to pay 8%. Von says this will snag too many small businesses.

My response – he could be right! The bill does include some small business tax credits, and many of these employers already provide coverage. But still, it’s a legitimate concern. And I have a couple of responses.

First, everything goes back to the fundamental question of whether you really want health coverage reform. That’s the million dollar question. If you do, then this type of dispute is precisely what negotiations are for. Maybe you bump up the exemption – maybe you add a different revenue source. The point is that these aren’t insurmountable difficulties, assuming you truly want to achieve reform. If you don't, cost is just a smokescreen.

Second, Von’s critique relates back to the larger tax policy questions we’ve been discussing. Our country needs revenues. At some point, those revenues are going to have to come from a sympathetic party. The mere fact that certain small businesses will pay more isn’t necessarily evidence that it’s a bad bill. After all, if we’re going to shut off every other revenue source, then something’s gotta give. I’d prefer higher income rates at the wealthier end, but that’s just me.

Moving on to Mark’s post… There’s a lot to chew on, but Mark (like Von) sharply criticizes maintaining the employer-based health care system. He prefers Wyden’s approach, which takes steps toward ending this system. My response – me too!

Here’s the problem though – we’re not acting on a blank slate. Choices made in the past have limited our political maneuvering space. Clinton’s plan was demagogued and defeated because it was seen as forcing people to abandon their existing coverage. Throwing people out of their current plans has been a favored political attack for years – one used, unfortunately, by both parties at various times. So we’re sort reaping we’ve sown on that front.

In addition, Mark seems to draw a sharp dichotomy between the “Wyden Plan” and the “public option.” He portrays these as competing alternatives, and is unhappy that liberals have embraced the latter.

Isn’t this a bit of a false dichotomy though? The real divide seems to be between keeping the employer-based system (current bills) or not keeping it (old Wyden bill). The public option isn’t really the fundamental divide. Heck, even if the public option is dropped, the contrast with Wyden would be just as sharp.

In addition, I don’t see the Wyden approach as fundamentally inconsistent with the public option. Wyden wants to end the tax exclusion and give that money to the individual employee (sort of like McCain, except that Wyden would drop people onto a regulated cushion rather than into an alligator pit).

But even under Wyden’s approach, there’s no reason employees couldn’t take their money and buy into the public option too, right? I mean, my understanding of his new bill – the Free Choice Act – is that it contemplates a world with a public option. Let me know, though, if I’m wrong about that.

Comments

[jonnybutter]

Isn’t this a bit of a false dichotomy though?

Yes, except for the 'a bit' part.

[Mark Thompson]

Publius:

Thanks for the link - that's a good catch on the false dichotomy. It was a very poor choice of words on my part to use the "public option" language as if it were exclusively synonymous with the House legislation. I'll have to update my post accordingly.

To the extent the public option is included in Wyden's new legislation, I'm somewhat ambivalent about it. I'd rather it not be in there, because I think his legislation would be better without it, but I can't say that it's something I'd lose sleep over. If it is necessary to include a public option to get Wyden's legislation passed, then I'll still support because it still attempts to deal with the central problem of our system.

That said, I think that even with the public option, the Wyden legislation doesn't have the faintest chance of making it into law, which means we still wind up with a public option that maintains and, in effect doubles down on, employer based health care. This to me is at least arguably worse than the status quo, which is prett bad.

[publius]

We're not that far apart on the last point. I would have preferred Wyden's approach from the get-go, which never happened.

I think I've used my quota of Wire references for 2009. But I think Wyden's approach failed for roughly the same reason that Lt. Daniels got screwed over by his superiors. The people in charge aren't exactly inspiring figures (particularly with Kennedy sidelined)

[Mark Thompson]

I don't know - I've been finding over the last few years that the annual quota of Wire references is rapidly approaching infinity. In fact, I'm not sure it's even possible to discuss despair over the state of government without invoking the Wire in some fashion.

[J. Michael Neal]

I don't understand this argument that it doubles down on employer provided health care. Yes, it ties revenues to businesses, and promises people that they can keep their current plan. I'd rather do away with the linkage altogether, but I don't buy that this makes the ties tighter. Quite the opposite, actually.

First off, it ends one of the worst problems of the current employer based system. Probably the worst. With the other options in place, you don't need to be afraid that, if you leave your current job, you'll lose your access to health insurance.

This very clearly has some direct effects. For starters, it removes a gross inefficiency in the labor market, allowing for people to move around within the economy much more easily. It also removes the anxiety that goes along with the problem. If you hate your job, you can quit.

This has an indirect effect as well, which I think addresses the point. While it increases the revenue production through employment, it's going to reduce the overall dependence upon the employer system. When someone does change jobs, I predict that a lot of them won't get their new insurance through their new employer. They'll join some other part of the system.

Over time, the reforms needed to decouple health insurance and your employer will become much easier to implement.

[jrudkis]

It sounds like a recipe for outsourcing more employees, and gaming as many as possible into "independent contractor" status.

[D'd'd'dave]

You have convinced me that it is fair, moral and just for the nation to provide this proposed healthcare reform for its citizens. I also agree that it would be better for 98% of us if the other 2% paid for it. And since we're all in this together it really would be immoral for the 2% to withhold it from the rest of us.

So, I was thinking, what we really need to do is find a group who represents 2% of the population and which responds to pleas for help based on morality and patriotism. Finally, it would help if that group is generally healthy because then we could say that their surtax is in place of the money that they have not been spending on healthcare. We can say that the nation is in a crisis because they have not been spending enough. Finally, it would help if the majority of them were in a few isolated congressional districts.

The Mormons match all of these criteria. And besides that, we saw during Romney's campaign that many right wing groups don't like Mormons. I think we could get bipartisan support for this and pass healthcare reform. It doesn't matter how we get it right? Just as long as we get it.

What do you think?

[mightygodking]

What do you think?

I'm pretty sure the consensus is "your satire is getting weaker with experience."

[Gary Farber]

"It doesn't matter how we get it right? Just as long as we get it."

I think that this is trolling.

[Tony P.]

Nah. The correct indictment is "impersonating a troll".

--TP

[Diesel Kitty]

In most businesses that don't pay for health coverage, that decision is due to a 'race to the bottom' - I can't afford to pay my people's insurance, because the next guy doesn't pay his people's insurance, so his costs are lower and he can undercut my prices. If EVERYBODY has to pay 8%, we all build it into our pricing, our employees are all better off, and none of us suffers a competitive disadvantage. As is true of any tax on business, the cost is ultimately paid by our customers.

In my small business, attracting and keeping good people is more important than minimizing costs, so I do pay for health coverage. Insurance for me and my employees costs me more than 20% of payroll -- and my people are pretty well paid professionals and skilled workers. If I could pay a tax of 8% of payroll in return for public health insurance for me and my employees, I would take that deal in a microsecond -- and so would any small business owner who isn't utterly deluded by the Chamber of Commerce propaganda.

[Bob Loblaw]

Both France and Germany have sizable employer contributions built into their health care systems. I believe in Germany it is 6%-8% of an employee's gross pay (the employee is taxed an equal amount). This might be seen as a move in that direction.

If I were building a system by scratch it might not be my ideal, the bismarck systems tend to be the most expensive, but it's hard to argue with their current results and it is the most similar to the current US system.

[Hartmut]

But the German system also requires strict government regulation that is actually enforced (in reality it's even a bit overdone).
Whatever reform comes, it must be constructed in a way that does not allow the next GOP administration to kill it instantly. Look at the GOP plan for Social Security privatization (or better: privation). That was constructed in a way that a return to the old system would have been absolutely impossible without (or even with) national bankruptcy. A health reform that is able to survive the next change of power in Washington will have to go, I fear, along those lines.
And let's not forget (says the resident pessimist cynic) that there is the SCOTUS to reckon with. If the GOP can't stop the reform in Congress, it will try to do do it through the courts (and the chances of success are high).

[Tom]

I think J. Michael Neal makes a great point that the type of plan that will likely/hopefully pass will probably undermine the employer-based health care system over time.

Moreover, it will probably do so gradually and through individual choice -- features that should appeal to many conservatives, and that also seem prudent to me.

Gradually undermining the linkage between employment and health coverage should also make it easier to enact future reforms.

[rea]

The goal is not to get the best possible plan--the goal is to get something that addresses the problem through the obstructionists in Congress. It may not be perfect, it may need a lot of tinkering over the next few decades, but it will be progress.

Von makes some constructive suggestons--how I wish he were a Republican. congressperson!

[Hartmut]

rea, that may be the very reason why von is not in Congress (not your wish, him being constructive).

[D'd'd'dave]

Gary
//"It doesn't matter how we get it right? Just as long as we get it."
I think that this is trolling.//

No Gary, trolling was what you did on the other 'anti-tax' thread when you accused me of being in fantasy land and having no grasp of the facts (july 20 9:40p). And then when I offered accurate proof you essentially said it didn't matter anyway (july 20 11:55p).

[D'd'd'dave]

Gary

How is this:

"It doesn't matter how we get it right? Just as long as we get it.",

which you think is trolling, different from what rea wrote at 8:34a:

"The goal is not to get the best possible plan--the goal is to get something that addresses the problem through the obstructionists in Congress. It may not be perfect, it may need a lot of tinkering over the next few decades, but it will be progress."

What I say is so against your ideology that you can't recognize that it is true.

[Eric Martin]

dddave is right. The top 1-2% of the wealthiest in America are struggling so hard, and the past decade of Bush's punitive measures have been so onerous, that they deserve a break.

Therefore, I propose that we tax the Mormons, and the freeloading working poor, and not only pay for health care but give the top 1-2% what they deserve and have been waiting for for oh so long: a massive tax cut!

[D'd'd'dave]

Gary

and again, in your own words, just a few hours ago on the 'anti-tax thread in support of SOV:

//"Being annoying" does not equal "trolling."//

[Eric Martin]

I didn't think dddave was trolling fwiw.

[someotherdude]

That 2%, probably made a killing off of the war on terror, they should be able to give back.

(Trolling?)

[jdkbrown]

"How is this:

'It doesn't matter how we get it right? Just as long as we get it.',

which you think is trolling, different from what rea wrote at 8:34a:

'The goal is not to get the best possible plan--the goal is to get something that addresses the problem through the obstructionists in Congress. It may not be perfect, it may need a lot of tinkering over the next few decades, but it will be progress.'"

Because what you said is "The ends justifies the means," and what rea said is "Don't let the perfect be the enemy of the good."

[Rob in CT]

I would prefer a new system that decouples health coverage from employment, because I think that's generally good for mobility in the workforce, and because it seems to me (and my understanding may be simplistic or outright wrong on this, since I'm not an expert) that small businesses in particular would benifit from not having to deal with employee healthcare coverage anymore.

Having said that... politics is the art of the possible and all that. I'd LOVE it if the GOP (or the "Blue Dog" Dems, or both) stood up and made THAT their critique of the current plan, offering an alternative (or backing Wyden). That would be supercool. Unfortunately, they won't, and the rest of the Dems have gone down the other road. So, as is always the case in politics (even in life in general, perhaps?) we're left trying to grab the lesser of two evils (flawed reform vs. no reform).

[urban legend]

The correct dichotomy is between costs than can destroy you and costs that are ordinary or at most tough to handle but not financially devastating. Once we understand that, everything will fall into place, and employer mandates, which are self-defeating when we want employers to feel fee to hire again without exploding benefits, will become unnecessary.

[Gary Farber]

"No Gary, trolling was what you did on the other 'anti-tax' thread when you accused me of being in fantasy land and having no grasp of the facts (july 20 9:40p)."

No, that was insulting you on the basis of how wrong your claims were. You really have no idea what "trolling" means. "Trolling:

In Internet slang, a troll is someone who posts controversial, inflammatory, irrelevant or off-topic messages in an online community, such as an online discussion forum, chat room or collaborative content community with the primary intent of provoking other users into an emotional or disciplinary response[1] or to generally disrupt normal on-topic discussion.

Making up sh*t and falsely attributing it as what other people believe is trolling. Pointing out they have their facts entirely wrong is not. Neither is simply being annoying.

The point of trolling is simply purposely trying to infuriate people by poking them in a way that you hope to get enraged responses, because you regard it as fun to generate such responses from people whom you do not respect . You do exactly that, a lot. You think you're justified; that's irrelevant.

If you don't want to be accused of being a troll, don't make up what you regard as satiric versions of what you think people believe, because whatever you think, you get wrong what people believe, and you wind up doing what constitutes trolling. Argue on substance. Don't make up straw man arguments. It's that simple.

How is this:

"It doesn't matter how we get it right? Just as long as we get it.",

which you think is trolling, different from what rea wrote at 8:34a:

"The goal is not to get the best possible plan--the goal is to get something that addresses the problem through the obstructionists in Congress. It may not be perfect, it may need a lot of tinkering over the next few decades, but it will be progress."

Very simple: the difference is that the second is a straightforward opinion, whereas the first is an attempt to claim that that's what someone else thinks or believes.

Do the latter, and you won't be accused of trolling. Do the former, and you will. Just quit falsely attributing opinions to other people, no matter that you think you have it right. If you think you have it right, just ask, and do it without attempting to ask about obviously straw man exaggerations that you are, either explicitly or implicitly, claiming represent what people you disagree with believe.

HTH. HAND.

[Gary Farber]

Specifically: "The Mormons match all of these criteria. And besides that, we saw during Romney's campaign that many right wing groups don't like Mormons. I think we could get bipartisan support for this and pass healthcare reform. It doesn't matter how we get it right? Just as long as we get it."

This is not something you actually believe. It is not something you actually believe anyone here believes. It's a deliberate attempt to be annoying by pretending that it somehow resembles what people here believe. No matter how sincerely you may believe that this is satire that accurately reflects the beliefs of the people you are disagreeing with, it is still a troll: an attempt to deliberately generate annoyed or outraged responses.

[Gary Farber]

Compare this: "The goal is not to get the best possible plan--the goal is to get something that addresses the problem through the obstructionists in Congress. It may not be perfect, it may need a lot of tinkering over the next few decades, but it will be progress."

That's simply an anodyne sincere opinion. You're free to disagree with it, but there's no attempt in it to deliberately falsify anyone's opinion, or deliberately annoy.

[Gary Farber]

"//"Being annoying" does not equal "trolling."//"

That's correct: simply being annoying while making a fair argument is not trolling. Posting simply to attempt to annoy and infuriate by making up false claims is trolling.

Ideology has nothing to do with it.

[The Crafty Trilobite]

Gary, I have a great deal of respect for your intellectual abilities, but you're wrong on this one. By your definitions, d'd'd'ave was not trolling. He employed sarcastic hyperbole to make the points that sometimes it IS worse to have a bad plan than no plan, and that it is unfair to balance the budget on the backs of the rich.

I disagree with his implicit description of the revenue sourcing, and with his disdain for progressive taxation generally. I'm also not sure this is so bad a plan that it is worse than no plan. But his opinions were precisely on point, and his sarcasm was both effective and impersonal. This is not trolling, this is energetic disagreement.

[Gary Farber]

"This is not trolling, this is energetic disagreement."

You could be right. I'd find it easier to be convinced if d'd'd'dave didn't do so much posting of nonsensical straw versions of what he seems to believe Stoopid Libruls Think, and stuck to simply trying to disagree with what people actually say.

It's not as if there isn't endless room for simply refuting arguments with convincing logic and facts, rather than making up straw that nobody believes in, and refuting that instead.

[Gary Farber]

I realize the former requires more work than the latter, but I'm unsympathetic to the problem that it requires effort to actually research facts, and it requires articulateness and brains to make a logical argument.

[Greg Zwick]

I totally agree with Mark's opinion that the employer based healthcare system must go. It could be done much easier than you think by allowing tax free contributions to an employee's personal healthcare account.

I pay $350/mo for 39 employees toward health insurance. If I pay this to their personal healthcare account it has no net impact to me. If I cancel insurance and increase their pay by $350/mo, it becomes taxable to me and the employee.

Just make all current employer contributions be paid out to one or the other and end employer based healthcare for good.

[Tony P.]

I pay $350/mo for 39 employees toward health insurance. If I pay this to their personal healthcare account it has no net impact to me. If I cancel insurance and increase their pay by $350/mo, it becomes taxable to me and the employee.

I would like to understand this. How is the money you pay to your employees taxable to YOU?

--TP

[JanieM]

I would like to understand this. How is the money you pay to your employees taxable to YOU?

Not that Greg Zwick can't answer for himself, but given the way he worded the example ($350 to health ins. vs a $350 pay increase), I assumed he meant FICA.

[Tony P.]

Janie,

You're probably right. But if so, George Zwick sets up a false dichotomy. After all, he can keep himself even by giving the emloyee a $320 raise and using the remaining $30 or so to pay the employer share of FICA. Doing that, versus paying the $350 for his employee's health insurance plan, makes zero difference to the business's taxable bottom line.

But perhaps George meant something else. If so, I'd like to know what.

--TP