Monday, June 29, 2009

Trying to have an opinion

Seems we're going to solve health care in the US, now. Or at least the federal government is about to pass a whole bunch of laws (or at least wants to) that will impact how we collectively experience health care in this country.

And as a citizen, I'm trying to form an opinion on what, if anything, should be done.

Not easy.

The issue isn't simple. There's the market forces vs. public subsidy debate, which Nobel winning economists are fighting about. I'm normally on the side of market forces to sort things out, but recognize Krugman's point: If you leave market forces to sort this out, some people go uninsured.

In case the reasons for this aren't transparent, think of it from the insurer's point of view: Whom would you select for customers? Put another way, for whom would you volunteer to pick up the health care tab for the next year, assuming you like holding on to your money: 25 year old male triathletes, or 67 year old obese lifelong smoking women? Under what circumstances would you agree to cover the expenses of the fat smokers? If they have a 10% chance of needing $500,000 in lung cancer care, and you charge them enough to cover their expected costs, few will be able to afford $50,000 per year. And so they remain uninsured. You're not being a dick, you're just not being a chump.

So the insurance market, when left alone, is like the credit market: some people don't get any.

I'm not bothered by this in the credit market. I'm really not sure how I feel about it in the health insurance market.

Part of the current problem is the government picks up some of the worst segments of the market, the poor and the old, through Medicare and Medicaid. So if you're not poor, but you're not rich, and you're not well, you're screwed. Private firms, rightfully, do not want you as a customer at prices you can afford.

I suppose that, if we as a society decide everyone gets health care, then we all end up paying for it one way or another, either through public funding and higher taxes, or higher premiums on private insurance once government mandates all must be accepted and rates must be capped. If you can't charge Fatty McSmokerpants what she really costs, you charge Bobby O'Triathalon the difference.

Which doesn't seem to provide any market based financial incentive not to be a burden on the system. Yeah, jack the tobacco tax through the roof, and that'll start. But hard to tax couch sitting and TV watching and half-gallon-of-double-fudge-brownie-in-one-sitting eating. Hard to subsidize interval training. So I'm troubled by the lack of market-created incentives that seem to materialize once those truly burdensome to insure no longer feel the pain they create for everyone else. If you have all you can eat health care for "free" (you don't directly detect the incremental cost of your incremental consumption), why wouldn't you see the doctor every time you had a sniffle, unless you had to wait 8 weeks for an appointment?

If I think about it another way, there will always be a private option. Those with means will always have access to a higher level of service. If I have a bajillion dollars and I want to hire an endocrinologist to adjust the iodine in my table salt every morning, after giving me a full body MRI, I can do that, if I'm willing to pay for it. The question becomes, what is the public option, how is it paid for, and who is likely to have that be their only option? And there are legit concerns that a subsidized public option will cause Bobby O'Triathalon to pull out of the private pool, into the lower cost public pool (tax payer wins, private firm loses) causing private firm to have to raise rates to cover the remaining folks, forcing more into the public system, etc.

And maybe that's not bad. Or maybe it is. I don't know.

Not simple.