Thomas Langhorne has an interesting article in the Evansville Courier Press interviewing a long time Evansville doctor on his opinions about the creation of Medicare. He was opposed to the socialized medicine it represented. In fact, many of his objections to Medicare then sound similar to the objections to a public health insurance option now.
One thing the doctor thought back then was that the health program shouldn’t be based on age, rather it should be based on indigency.
“Medicare helps people who need it, but it also helps people who don’t need it,” said Nicholson, now Vanderburgh County health officer. “If you were a millionaire, you were just as eligible for Medicare as if you didn’t have a penny in your pocket. It didn’t seem fair to me. I felt anyone who became medically indigent should be covered.”
. . .
Throughout the 1950s and early 1960s, the American Medical Association repeatedly mobilized to defeat a succession of bills aimed at establishing federal Medicare programs.While early advocates proposed to address the catastrophic effects of large hospital and surgical bills for all the aged participating in the Social Security system regardless of income, opponents wanted to target aid based on need. They proposed comprehensive benefits to people for whom savings, private insurance, medical charity, or state and local aid were inadequate to meet health expenses.
My sense is that if whatever reform comes out of the health care debate is limited to the poor, it is doomed to failure. Nobody wants another entitlement for the poor. The program will come to be resented pretty quickly if it doesn’t benefit a broad swath of the population. It will then be starved for resources and, when for lack of resources it performs poorly, will be held up as an example of government not working. Rather, in my mind, the new program should use the premium dollars already being paid by the middle class to rationalize health care prices and deliver health care without the need to route those premium dollars through an insurance bureaucracy committed to denying as many claims as possible and maximizing return to insurance company shareholders.
Unfortunately, there were not enough objections to Medicare based on its costs. I forget the exact numbers, but looking forward 25 years or so, the projections of Medicare spending were off by something like 100-fold.
The poor receive health insurance; most of those in the middle class and above who want health insurance can purchase it. Most of the target audience is the working poor (lower middle class). Why not target them?
From a personal perspective, because the individual policies available to a guy like me are expensive and unreliable. I think they can be made less expensive and more reliable. But I think you’re going to need a public insurance option to keep private insurers honest.
I have my own personal story, but this account underscores what I mean about the unreliability of insurance.
Is there anything wrong with a government option that sucks enough that employers will still offer insurance?
I hear that the government won’t do health insurance very well. Fine, not doing it well is better than nothing, and it won’t run the private insurers out if it can’t compete.
Doug, govt restrictions on mandated coverage obtaining insurance across state lines make this unnecessarily painful and expensive. Why don’t those who favor a public option ALSO make private options more accessible by changing (bad) govt policy?
Jason, the devil is in the details– in particular, the size of the subsidy connected to the public option. If modest, then the impact on the private sector would be modest (to your point). If an immodest subsidy, then…
eric: under the current system, each state sets is own insurance guidelines. in order for a business to sell insurance in that state, it must be properly licensed to do so by that state. what you’re suggesting is that the federal government should strip this right away from the states… quite a surprising argument to come from a libertarian.
anyway, i’m amused by this idea that removing government restrictions will somehow solve the health care crisis. the biggest problem with the current system is that because insurance companies are for-profit, it’s in their best interest to deny care, not to administer care. removing restrictions wouldn’t solve that problem: it would only make it worse.
An interesting point, stAllio…thanks!
There are competing principles here– both economically and politically. Ideally, you go with local governance when possible. Competition is generally (quite) a good thing. Constitutionally, one can invoke interstate commerce to regulate such things.
I didn’t say “solve”; I alluded to (no-brainer) improvement. Government intervention, helping interest groups at the expense of the general public, is far from amusing.
Insurance companies have mixed motives: the short-run desire to refuse coverage and the long-run desire to maintain/build reputation and clientele. Govt provision has different (but still quite troublesome) incentives.