An Open Letter to Paul Krugman

Dear Professor Krugman,

I think you are a terrific economist and a terrific writer. Over the years, I have made hundreds of students buy your microeconomics textbook.

We have some disagreements about health policy. You have been lambasting Senator Obama for months now because he fails to propose an individual mandate. I support Senator Obama, though I in no way represent the Obama campaign.

In your view, the Obama plan will fall far short of universal coverage. In fact, both the Obama and Clinton plans will leave some millions of Americans uncovered, though both plans will cover many of the 47 million people who are now uninsured. Both plans will also address many serious failures and human tragedies that arise within our current healthcare system, and would put us miles ahead of where we are now.

No one can say how close these plans will come to universal coverage, because the devil is in the political and administrative details--details likely to be set by a future Congress negotiating with the next president.

In this morning's column, you cite a new working paper by Jonathan Gruber which supports the mandate concept. Anything that Professor Gruber writes deserves to be taken very seriously. It is, however, important to clarify that he does not specifically examine either the Obama or (especially) the Clinton plan.

In his policy simulations, Professor Gruber writes: "In particular I assume that 95% of those who would not voluntarily choose to insure are forced to insure through the mandate." This is not the Clinton plan. It is not even a "Clinton-type plan," as you prefer to say. Almost by definition, a near-perfect mandate will increase the number of people covered under any proposed health plan. Whether this nation actually would support such stringent policies is another matter. Here you presume precisely what is most in doubt.

Today's Times notes that "Massachusetts, the only state with an insurance mandate, has thus far failed to enroll nearly half of its uninsured despite imposing a modest first-year tax penalty of $219." Massachusetts will probably do better this year, because the penalties have stiffened. As I understand it, individuals are liable for half the premiums even if they are uninsured. Massachusetts provides a remarkably favorable political, economic, and administrative environment to attempt such a mandate. This is the best-case scenario, and it is not easy.

As a volunteer for the Obama campaign, I have called many primary voters. They sometimes ask about the mandate issue. Whatever health policy researchers believe, my sense from these conversations is that even core Democratic party voters don't much like mandates.

Senator Clinton's own equivocation illustrates the political dilemma. In criticizing Senator Obama, she happily takes credit for high levels of coverage. Yet she is wary in describing how she would bring this about. Today's New York Times has a story entitled "In Health Debate, Clinton Remains Vague on Penalties." It is certainly unclear that her proposed health plan comes anywhere near the near-perfect takeup and enforcement presumed by Professor Gruber, or that legislators and voters would support such policies. If Senator Clinton is nominated, Republicans will press this argument hard come November and beyond.

You are on more solid ground regarding the limitations of subsidies in achieving universal coverage. Professor Gruber notes that an important group of people--some but not all of low-income--will resist buying subsidized coverage. In the last debate, Senator Obama noted strategies to deter free-riding. This certainly merits debate, and merits comparison with what Senator Clinton actually proposes rather than a 95% perfect hypothetical plan.

More generally, you assert that Senator Obama is a less progressive candidate than Hillary Clinton because he has stopped short of imposing the individual mandate. This is a very sweeping judgment based on one political and policy calculation.

Your assessment makes an odd fit with Mr. Obama's policy view on Iraq and many other things. It runs counter to the thinking of many progressive organizations and people who have endorsed Senator Obama: MoveOn.org, Teddy Kennedy, and others. It runs counter to most tabulations of his legislative record, which often identify him as more progressive than Senator Clinton. It ignores many, many years of conscious, sometimes-justified triangulation by both Clintons regarding many social concerns.

I am puzzled by the shrillness of your columns about Obama, and your rather exclusive focus on individual mandates as the litmus test for a progressive politician.

Let's suppose, for the sake of argument, that everything you say is right. President Obama gets himself elected. He successfully enacts health reform, but he leaves out an individual mandate. Indeed, let's suppose that we later discover that too many people fail to buy insurance coverage or try to free-ride. We would have to address these problems.

In the meanwhile, all we will have accomplished would be:

1. to bar insurers from denying coverage based on preexisting conditions;
2. to provide significant financial subsidies to millions of low-income people to help them buy coverage;
3. to prevent people from losing their homes because they are diagnosed with cancer;
4. to cover all children;
5. to make safety-net providers (and the local governments that run them) more financially secure because they no longer bear the burden of treating 47 million uninsured people.

I'd be pretty darned happy with this outcome--although I (like you) would ultimately prefer "Medicare for All" or some other version of a single-payer system.

Obama and Clinton supporters disagree on tactics and policy details. Politics and human nature being what they are, each side is angry because the other has thrown some fouls.

It's a tough campaign because there are two excellent candidates with similar policy views, and there can be only one winner. I suppose Obama people should not send mailings that attack mandates. I suppose Clinton people should not send mailings that say Obama will impose a $1 trillion tax increase on working families by raising the Social Security earnings cap. I suppose Bill Clinton should be quieter and stay out of trouble.

Hopefully this fight will burnish the eventual nominee and unite the Democratic Party. The fact is: We share the same values and ultimate goals. Whoever is nominated, we will need each other to win the general election and to enact Democratic proposals into law. So let's fight now, but let's tone things down a bit, too. We'll be on the same side a few months from now, or maybe sooner.

Comments

[Herrington]

You folks are beating the horse because the wagon wheel is broken. Insurers are not the problem and no amount of mandating or not mandating funding of the escalating cost of healthcare is going to solve the problem. Look elswhere.

Look to the source of the costs. Healthcare providers hide behind the angelic label of non-profit. The non-profit business and tax model is the most easily corruptable organization in existence because it literaly encourages spending to retain non-profit status. The Federal Government has more oversight, more watchdogs and is less wasteful than your neighborhood hospital.

Think about it. Can insurers be responsible for Americans paying twice what other countrys spend on healthcare? Your hospital spends 25% to 75% of its revenue or more on executive compensation, unwarranted capital construction, inflated charges for materials and equipment and any other arguable expense including the costs of mergers.

The answer is not in a publicly funded boondoggle, it is in the tax code.

[Jaybot]

Ya know how most politicians talk about things, propose things, that they have no intention of ever accomplishing after they are elected? They may make a good show of it, they may even spend a bit of political capitol on the effort, but they know that in reality it is only a decoy to help get them elected. Such is the issue of health care reform, at least for those left in the running. So when all the talking heads get flustered over the issue and start nipping at each other over it, it really makes one suspicious. Just who do you thing you are fooling, and more to the point, why are you trying so hard?

[moodygirl]

As a regular reader of Mr. Krugman's column in the NYT I have been disappointed in his continued harsh treatment of Mr. Obama and his electoral platform. So I decided to take a breather and stop reading him.

[Zanti]

Oh, and this is a prediction coming true for me. I anticipated that we'd have a replay of "We want universal health care, just so long as it's not universal.­" And, sure enough, we are. This time around, people are all for universal health care but they don't want those pesky mandates. IN OTHER WORDS, they don't really want universal coverage.

The same ol' basic American fallacy of supporting but not supporting. Of advocating but not advocating. The American people are so easily manipulated by the press, it would be cause to cry. Would be, that is, if it weren't such a familiar story.

Yes, we want universal health care. No, we DON'T want universal health care. The Monty Python brain-surgeon sketch. In real life....

[boaz16]

You are reading selectively. It is Sen. Obama's shrill tone, not Krugman's, that is putting the possibilty of any national health care plan in jeopardy. The plain truth is that, in defending a less audacious plan, Obama has taken to using tactics that would come back to haunt him as Prsident and suggest he is not serious about getting this done. His own triangulation in the Harry et Louise redux mailer, his false warning that Clinton will impose penalties on needy people (who would receive more affordable care and better subsidies under her plan) show a callous political calculation that Clinton haters everywhere rejoice in accusing Bill and Hillary of: win at all costs, even your own values. A good negotiator doesn't give away chips before getting to the bargaining table, nor does he make commercials that the other side will be able to use against him when it comes time to make a deal. Nor would a good negotiator propose wasting political muscle trying to get everyone on tv. I would say read the fine print, but in this case all ya gotta do is read the NYT editorial column, which uses a pretty large point font.

[Zanti]

"In his policy simulations, Professor Gruber writes: 'In particular I assume that 95% of those who would not voluntarily choose to insure are forced to insure through the mandate.' This is not the Clinton plan. It is not even a 'Clinton-type plan,' as you prefer to say."

By "This is not the Clinton plan," you apparently mean that the Clinton plan will not, in your view, accomplish the needed mandate. Thus, you're falsely suggesting that her plan doesn't set out to accomplish this goal--that her plan, therefore, is no different than Obama's in that vital regard. That's more than a little bit dishonest, no?

"Here you presume precisely what is most in doubt."

("You" being Krugman, of course. No, he has presumed nothing of the kind. I quote from his piece: "While it’s easy to see how the Clinton plan could end up being eviscerate­d..."

Does that sound like Mr. Krugman is presuming much of anything? In fact, he is not. He writes that "there is, indeed, no guarantee that Mrs. Clinton would, if elected, be able to pass anything like her current health care plan."

In short, you've given me even more reason to distrust Obama's plan.

[Kane]

I have no problem with Krugman delving into proposals and policies and offering his opinions. However, it is not a stretch to say that Krugman has not been even-handed in his criticism, as he fails to hold others to the same standard that he holds Obama. Oftentimes it appears as if Krugman has a personal ax to grind with Obama, and that the criticism has nothing to do with health care policy. It's gotten to the point of late where I don't read Krugman's op-ed. I can't possibly know what Krugman has against Obama, but I'm reminded that Krugman was a defender of NAFTA back in the day.

[plutorage]

Paul Krugmans column in the New York times today concludes that he must support Hilary because Obamas Health care plan doesn't guarantee universal health coverage.

Hilary's plan doesn't either. She says that she will open the Congressional health care plan to individuals but doesn't say how much one would have to pay for it. Suppose it is $10,000 per year - how can a cleaning lady afford it? How will the Congressional plan cover pre-existing conditions? Charge more? Deny coverage for the pre-existing condition?

Krugman needs to get honest here. Hilary is dodging on most of these questions, hoping she will not be called on it before getting into the White House after which she will blame everybody else for failing to enact a plan that never really existed to begin with.

Let's face it, the only real practical solution which has a chance of political success as well, is to give everybody the choice of staying with their existing plan or pay a spepcific percentage of their income (per annual tax return) as a premium and be enrolled in a medicare type plan.

Republicans should be pleased since there would not longer be any medicaid as such. Even somebody making $10,000 per year would pay premiums just as they now pay social security taxes. That would reduce significantly what everybody else pays to make up for the uninsured, while forcing the uninsured to pay only what they can afford.

[vbond]

"I am puzzled by the shrillness of your columns about Obama, and your rather exclusive focus on individual mandates as the litmus test for a progressive politician­."

So am I.

If I had the mindset about Krugman that he seems to have about Obama, it's the kind of thing that would seriously damage my respect for him.

Come to think of it... it has.

[FolkAstronomy]

As an Obama supporter I agree with Krugman on this point -- and I do think most people are not understanding what he is actually arguing because he is not coming out and saying it.

Krugman sees achieving universal healthcare as the proving ground on which liberalism can regain favor in the US. If liberals can get universal healthcare right, it will restore faith in liberal policies and create massive goodwill among Americans in a way similar to social security, ushering in an era of a more progressive agenda.

The mandates are important not because they are going to be especially effective (I doubt anyone really believes this), but because they are powerfully symbolic. We must have mandates so that psychologically everyone gets used to the idea that in America, the law of the land is that everyone must be insured. It sends the powerful message that we take universal health coverage seriously.

Even if the mandates don't work, or the penalty is 25 cents, they are important because they set the table for universal coverage by enshrining our commitment to it in law. It's very important for these reasons and Obama is undermining the prospect for any of these events transpiring by not only advocating mandates but by harshly opposing them.

[Raven]

Couldn't agree more, Harold.

If there's an American who would be more grateful for healthcare - forget affordable, just to have it at all - I'd love the meet them.

And yet, as much as I need some form of health care coverage - any form really - I am strongly opposed to mandates.

They seem absolutely outrageous to me.

We'll never get to full coverage, no matter how much it's mandated. How many uninsured drivers are there in states that mandate coverage?

No, the way to really increase coverage is to offer options - and do away with the incentives for insurers to deny claims and coverage.

Obama's plan makes a lot of sense to me.

It's not perfect. But if perfection is our goal, we'll never get anywhere.

[skyfish]

Crazy, hysterical, stupid Americans.­.. Thank you, Dr. Krugman for your immensely insightful columns. Hang in there - Lots of love

[jbatch]

I won't pretend to speak for Dr. Krugman, but I will share what I believe he's saying and why he's saying it, because it's clear from your post you don't seem to understand.

It seems to me he's concerned that once again, progressives are being sold a bill of goods. When you strip away the rhetoric, Obama and Hillary aren't that different, even on health care. Both are DLC/centraist dems. But the differences are signifigant because Obama is passing himself off as a progressive when he is, in fact, a centrist. His health care position is emblamatic of that, and so Dr Krugman hammers away at it.

We've had decades of "bring us together" Dems, and all we got was a political discourse dragged further to the center, and a morally and economically bankrupt country as a result.

I believe Dr. Krugman shares a frustration all of us progressives have. The focus on the horse race at the expense of issues means the voters haven't a clue as to what the candidates stand for.

Allowing rhetoric to replace substance is frustrating for us. Read his column on Edwards, and I believe you'll better understand why he focuses on this. We're getting screwed, and the health insurance industry is getting what they've always got.

But I believe that's a sympton of a much larger issue that Dr. Krugman is raising.

I will support Barack, largely because of his position on the war, but not with the enthusiasm I supported Edwards.

At some point, issues matter. At some point drawing a line in the sand and standing your ground is more important than singing Kumbaya with economic and ideoplogic fascists.

[Pneumaticus]

You might want to read Mr. Krugman's column again. What don't you get? The only solution to the health care crisis in this country is universal. And so far, all Oprama and his bevy of gushing gltterati offer in this campaign is cheap talk, albeit a baritone. But that's it; nothing progressive about it. In fact, with the celebrity supporters he's getting now, his campaign is beginning to look more like an Oscar party than any political party. And when he promised not to take guns away from folks in Idaho on Saturday, he even did it in a condescending good ole boy accent that was as insulting as it was blithering.

[JakeEasy]

"It runs counter to most tabulations of his legislative record, which often identify him as more progressive than Senator Clinton. It ignores many, many years of conscious, sometimes-justified triangulation by both Clintons regarding many social concerns."

Unlike Mr. Krugman's article, you fail to notate your sources. Just which tabulations are you referring to? Most of the ones I have seen show his voting record slightly more conservative than Hillary's. And if the triangulations were justified, why is it a problem. if triangulation itself is a problem, why is it a central core of the Obama message. He doesn't call it triangulation, but the big tent, bring all sides together, increase bipartisanship lines are all the same thing. (By the way, trying to make nice to the neocons didn't work for Clinton and it won't work for Obama.)