California Health Reform and the Limits of "Left/Right" Paradigms

One of the most puzzling turns in the healthcare debate has been the insistence of some politicians and observers that mandating health coverage is a "progressive" thing to do. As Jamie Court rightly observes, it's not. Medicare-For-All is the only truly progressive approach (although it has serious problems), while mandates - whether advisable or not - are not leftist or liberal by any recognizable historical definition. They are, in fact, "regressive" in both senses of the word - as in "regressive" taxation, and as in favoring the status quo (private-sector health insurance) over dramatic change.

That's why health insurance companies stand to benefit from enactment of mandate-driven plans like those proposed by Edwards, Clinton, and the leading states (see the Wall Street Journal, "Health-Care Plans Aid Industry.")

I admire many of John Edwards' positions and find much to appreciate in his health plan, but when he introduced the slightly hectoring phrase "shared responsibility" into the discussion (later adopted by Hillary Clinton) he was appropriating a right-wing concept. Like other health policy analysts, I recognize that failure to insure all Americans will result in maldistribution of risk. That's the economic problem mandates seek to redress. But are they the right answer?

This is where "left/right" labels break down. Arnold Schwarzenegger's proposal, which passed the California Assembly last week, is more "progressive" than either the Edwards or Clinton plans. Paradoxically, that's because - like the Massachusetts plan - it finally abandoned that idea that it could use mandates to "guarantee coverage for all."

Massachusetts has exempted 20% of the uninsured from its mandate, while California lawmakers have now set their figure at 30%. Both of these states have been forced to recognize that universal coverage through mandates is impossible unless you create severe financial hardship for some people - which they were thankfully unwilling to impose. Unfortunately, the hidden flaw in these types of plans is now exposed: Mandates cannot provide universal coverage without unacceptable economic pain.

The California plan has other problems. For example, it attempts to relieve the premium burden on the middle-class through the use of tax credits, a mechanism favored by conservatives. That could fail for any number of reasons, including the fact that costs could easily exceed a family's total state taxes.

Our society already has a tool for funding our "shared responsibilities." It's called taxation, and it's designed to avoid placing catastrophic financial burdens on any one economic group. Yet Clinton, Edwards, and allies like Paul Krugman continue to push the idea that health reform plans aren't "progressive" unless they force everyone to purchase private insurance. Then they boast that their plans "cover everyone." They do, in a way - the same way that a shotgun wedding "helps you find your soul mate."

The pressure to discuss health reform as a "left/right" issue will apparently continue. So for those who are attached to that particular paradigm, here's a categorical breakdown of health reform concepts on a progressive-to-conservative spectrum (it is, of necessity, imperfect):

1. Most progressive:  Medicare-For-All, aka Single-Payer.
2. Somewhat progressive (but with a libertarian twist):  Guaranteed basic coverage for all, paid from tax revenues, with "vouchers" that can be applied to private coverage.
3. Moderate-to-progressive:  Obama-like plan to reduce costs and improve IT platforms, without mandating coverage (while retaining the option to do so later).
4. Moderate:   Schwarzenegger-like plans to mandate coverage except where impractical and/or burdensome to individuals (with plans to mitigate the problem later).
5. Somewhat conservative:  Clinton-Edwards style plans that mandate "shared responsibility," meaning every American must purchase health insurance even if that proves financially burdensome.  (Note:  Like #3 and #4, these plans provide financial assistance for lower-income individuals, but lower-middle-class families are likely to be hit hard.)
6. Conservative:  Maintaining the status quo.
7. Radically conservative: Giuliani and Bush "reform" plans that combine the eradication of employer-funded insurance with a mythical "free market" in health coverage.

I'm not a knee-jerk anything, and the most "progressive" answer isn't always the right one. (Usually - but not always!) I don't support a straight "Medicare For All" approach, for example, because I have yet to see advocates for this position acknowledge and address the many technical problems and massive dislocations that would result. (A major initiative might help address these problems.) So #2 is closest to my own position.

I was highly critical of the Massachusetts plan when it was enacted, for the same reasons I've criticized the Clinton and Edwards plans: because it was clear that it would never be able to accomplish what it promised. Neither will either of these Democrats' proposals. Although they boast that "their plans cover everyone," a President Edwards or President Clinton will almost inevitably reverse themselves on mandates just as Massachusetts and California have done. And that will be the right (or should I say the left?) thing to do.

Once we've abandoned the illusory objective of coverage-through-enforcement, hopefully we can start work on meeting a goal that is at once more idealistic and more pragmatic: to provide healthcare to everyone without creating an unfair financial burden for anyone. To do that, we will have to ensure that private sector profits aren't excessive, and that each American is guaranteed a basic level of medical care - without being forced to pay insurance premiums that are based on a private-sector model.*

Let others worry about who's the most ideologically "left." When it comes to health care, I'd rather worry about who's being left out.

___________________

*The Edwards plan would allow people to join Medicare and pay their premiums to the government. That's an excellent idea, but it leaves a premium structure in place that is based on private-sector underwriting. There are other, better models - including paying for healthcare out of general revenues, or the premium model now in use in Germany. Space limits prevent more detailed discussion.

Conflict-of-interest statement: My consulting practice occasionally involves health insurance work, although it hasn't for some time. I could therefore either be accused of being "a hard-right shill for the insurance companies" (it's been said), or of nobly jeopardizing my own income possibilities in order to advocate for the best social outcome. You're free to draw your own conclusions.

A Night Light
The Sentinel Effect: Healthcare Blog
Future-While-U-Wait
RJ Eskow at the Huffington Post

Follow RJ Eskow on Twitter: www.twitter.com/rjeskow

Comments

[plutorage]

Getting rid of employer based insurance isn't really radically conservative. For a time I was not able to get insurance, period, (in the early nineties) when I moved to Florida because I was told that I had to be employed to purchase insurance. The insurance companies make it harder on individuals to buy insurance than groups (employers).

Universal health care with premiums levied through taxation is what I favor but it is only the most progressive if government's role is proscribed, ideally to the point where the government simply uses state power to collect premiums and then hands the premiums over to a medical "board" where consumers and doctors and state regulators are equally represented. The right would trash your "medicare for all" program by, perhaps or perhaps not reasonably, maintaining that it is socialist medicine and will lead to shortages and/or poor service with doctors serving as government employees.

[iowa60]

I really wish our presidentual candidates would step back a bit from their universal health plans and maybe think about starting at the bottom of the ladder.I think that if each county in each state would do a better job at getting more people into the workforce instead of sitting around to collect their welfare checks, we would have more people covered by insurance. More employees would need to be hired of course to handle the work load but it may eliminate some of the fraud too.I am self-employed and make 12,000 a year.I pay 15% of my income for taxes and for 15 years had no insurance at all and paid my medical bills myself even if it took a long time. Just this fall I was able to get insurance for which I'm thankful. My point I guess is that people have to be more responsible and give up a few things in order to have insurance rather than have everything given to them.

[SandyDoc]

As in all policy statements during an election, John Edwards Health coverage policy is just an indication of the direction he thinks we should go. Since his also includes the option of a single-payer system, he has acknowledge a willingness to go in that direction.

"Mandates" has become the four letter word of the Democratic nomination battle. In reality, it is truly a means by which we can lower the COSTS of coverage for everybody. If it is true that the ONLY reason people do not have health insurance is because they cannot afford it, then reducing the costs will result in everyone being covered. But that is a falacy. Lots of people choose NOT to be covered. It isn't a priority for them. But their desire not to participate ends up increasing the costs for everyone else. From this perspective, mandates make sense. At least in Edwards' policy proposal, the mandate doesn't kick in until all other cost reduction steps have been taken. Those cost reduction steps include reducing the profit margin and administrative costs of private insurers...thus bringing down the cost. At the same time, exclusions are stripped. Still, if given the choice between a profit-based insurance policy and one that has no profit built into it, which would you choose? Edwards' mandates do not apply to anyone experiencing financial hardship and those who wish to be excluded due to their religious beliefs.

Finally, while I would support a true non-profit, single-payer health care system, there ARE a few negatives with that as well: Thousands of people will lose their jobs and who gets to make the decisions about what is covered and what isn't?

I like Edwards plan; it may evolve into a true single-payer, non-profit system, but in the meantime it will reduce costs of both coverage and CARE.

[UltraClassic]

Great post, you point out the fact that many aspects of Hillary Care are not progressive at all.

There are simply two directions you can go when it comes to insurance of any kind.

(1) Premium/risk based coverage where actuary stats dictate the cost and the coverage. We have that today. The problem with this is that some folks get priced out (can't afford), others don't participate and therefor do not contribute to the premium base (young healthy folks) and lastly, willing participants who can afford the premiums in many instances burdon the system with huge medical costs that are not sound from an acutary perspective.

(2)Single Pay, everyone's covered, everyone pays. I use to not agree with this method. I've since changed my mind. Premium/risk based coverage will not get any better or any more efficient unless everyone participates and that is not going to happen. Our current insurance system in many ways compares to only insuring drivers who are likely to have accidents and who can afford huge premiums while everyone else drives around uninsured waiting to cost you and me when they collide with us.

Hillary tries to marry the two, I wish it were that easy. It's time for us to realize that without full participation (I'd like to see how she does that), the numbers are not going to add up.

A single payor program funded through a payroll tax or VAT is the only long term solution. And friends, this comes from a pretty conservative guy but I know a broken system when I see it.

Friends, liberals, this is your chance to make your mark. You will likely take the white house and keep congress. Today, right now is the time to think about what you are going to do about health care and prepare to take action.

[vippy]

Why even argue what is better. Congress and Senate have a healthcare system in place now let us spread this to the rest of the US.
I think they make more money than anyone and they get to enjoy it what should be the people's as well. No more argument. Then they have the nerve to decide what is best for the country, give me a break!

[Kungfublood]

Health care for all - sounds democratic to me, and if the wealthy don't like it they can just put a lot of personal time and effort into finding a doctor that is willing to accept more money for their work.

[Nutcase]

Let's begin by acknowledging that money coming out of your pocket is money coming out of your pocket. It shouldn't matter if it is called an insurance premium or a tax.

We pay in the neighborhood of 24 cents of every healthcare dollar for administration. That is what we pay for paperwork, the cost of running insurance companies and their profits. Medicare administrative costs are, or were just a few years ago when I checked, 1.8 cents of every dollar.

If we go to a single-payer system through Medicare, there would still be some administrative costs for physicians and hospitals. It seems very doable to keep total costs to the 5-6 percent range.

The other industrialized countries' costs range from 6-11 percent. If we lowered our costs from 24 percent to 11 percent, the savings would pay for universal coverage, choice of physician and hospital, dental care, preventive care, eyeglasses - the works for everyone.

This is based upon everyone and every business paying the same as now for healthcare, by premiums and taxes. It would all be called taxes but it would not require a penny more. It actually would save some money, at least initially.

This would cause some dislocation. The health insurance industry would disappear. We should all promise to cry for two minutes. Anyone putting too much stress on the loss of jobs for those presently working in that industry needs to compare it to the good of covering 47 million more people, preventive care for everyone, etc.

This would give us the breathing space to deal with the inflation of health costs and other problems. Without this breathing space we are in deep sh*t.

[Skepticat]

On buying compulsary private health care

"Sire the peasants are starving because they can't afford to buy food!"

Rotten little king, "quick pass a law forcing them to buy food!"

[robbie]

No one here has mentioned Dennis Kucinich? Kucinich is the most progressive candidate in the race, and he's the only one who has said anything about single-payer, which I believe is the most "progressive" solution. I think one sees it as "regressive" because they're set in a capitalist framework, where Nixonian ideology gets to rule the debate. I'd rather pay taxes into health-care than into the military health-destruction complex.

[kronik]

I believe RJ has made some very solid points but it seems he has not been introduced to the most progressive model carried by California State Senator Sheila Kuehl, SB 840. It passed the state legislature in August 2006 and was vetoed by Governor Schwartzenegger within the following month as being too costly. It has been reintroduced in 2007 with an associated financing package SB 1014. It is a comprehensive model financing almost all healthcare services, including dental and vision, provided by licensed providers with governance provisions providing flexibility to cover services sometimes referred to as experimental. It has been modeled extensively by a nationally recognized specialist, The Lewin Group, and therefore sets the financing and cost control standards for any serious effort at displacing the private health insurance industry whose campaign donations have controlled the health care financing dialog for most of the past century. Employers who currently fund health care benefits could expect to see a reduction in benefit premium costs in the order of one third.

Take a serious look at the private health insurance industry and you will not be able to find any statistical data on premiums or costs or the fiduciary business practices in this industry. One can project that they are spending only 65% of their premium dollars on healthcare as one can project from their business practices that they are capitalizing deception.

[RTIII]

"Single payer" is the ONLY way.

One thing I have NEVER heard said FOR single-payer is that it would ELIMINATE insurance premiums paid for by both companies and citizens, thereby granting them a HUGE increase in income and that the tax they'd then have to pay will -guaranteed!- be LESS! (The overhead of both our for-profit system and our Medicade (sp?) has been documented elsewhere - I don't recall the exact numbers I do recall for-profit administration is a bit over double Medicade overhead.

NOTE that this will also mean our businesses are on a better footing to compete!

SINGLE PAYER!

[dmc2]

Great article. It's nice to see someone actually apply a bit of logic to this debate.

[mamacat]

Effective Jan. 1, 1975, Hawaii's Prepaid Health Care Act of 1974 went into effect.
It requires most employers to provide health insurance to employees who work 20 or more hours a week for four consecutive weeks. (Interestingly, Standard Oil sought to invalidate employer-mandated health coverage in Hawaii through the courts. Standard Oil won, but Hawaii's representatives in Congress got an exemption to the law for Hawaii.) There is a formula for determining how much each employee pays towards his health insurance, a formula that gaurantees that each employee can afford their share.
When ERISA was passed, it contained language that prohibited any more states from mandating health care coverage in the way that Hawaii had. This tactic is very similar to what happened just recently when the CAFE standards were raised modestly. The new law makes it harder for individual states like California and New York to clean-up exhaust emissions.
Hawaii has fewer than 10% uninsured. Not a perfect system, but better than what we have in the rest of the U.S.
It looks to me like Republicans and corporations are using whatever tactics they can to prevent anything that could conceivably better conditions for everyone in the U.S.

[MattCanina]

I agree with you when you say the most progressive option is not always correct. However, wouldn't a voucher system be the first step towards progression?

This isn't to say a person who makes over a certain figure, say $35,000 should be able to collect. Only, beginning by helping those who struggle to maintain health care will leave room for more growth and will ensure a system that is strong at it's base. And $35,000 is an arbitrary number. Let's face it- it's only getting harder.

If the radical conservatives want to pay insurance then they should do whatever fits their best wishes, but to stand in the way of good health and life might be a bit hypocritical...

[laurenc]

All of this interesting conversation will be for naught if we end up with a candidate who can't win a national election in our deeply divided country. I believe in John Edwards and his ability to use the "bully pulpit" to bring Americans along into progressive and positive change for its citizens. We have an incredible candidate in Edwards AND his family and I pray that they get the nomination and then the White House. Then we'll solve the healthcare crisis--never under Republican rule.