Healthcare: risk distribution, fast food, and Joe Wilson

Obamacare!

Obamacare!

Michael Pollan wrote a great op-ed on the “elephant in the room” of our food supply in the healthcare debate and the prospect that forcing insurance companies to accept those with pre-existing conditions might make them very powerful allies in the fight against obesity.


A quick glance at Joe Wilson’s Wikipedia entry reveals that “you lie! Oops, I’m sorry” is a favorite phrase of his. In response to congressman Bob Filner’s statement that the US gave nukes to Iraq in the 1980s, Wilson called him a liar and “hater of America,” for which he later apologized. Next he called Essie Mae Washington-Williams a liar when she came out in 2003 as the love child of Strom Thurmond and his black maid. He later apologized but maintained that she shouldn’t have said it because of the smear it placed on Thurman. Wow.

Again he cries “lie,” and again it’s mostly inaccurate. His frustration certainly represents the fears of millions of Conservative Americans of the disruption of the status quo, as Rush eloquently summarized, and we in favor of healthcare reform can only persist in our hope that they will be on the losing side of history. His outburst is still inexcusable, as is the bitchy video he recorded the next day, “I will not be muzzled.” The open debate and fair representation of ideas that he claims to desire is only possible with respect, or at least something closer to respect. Obama is backed into a corner and needs Republican support desperately, so he’s in a position to listen. Write an op-ed, make your own speech, but don’t do that, or pretend it was in line – it wasn’t. And it’s hard to criticize those on the left for capitalizing on your outburst – you gave them the bait! (Still, they bicker like children and it’s not conducive to debate.)


What I don’t understand about Obama’s plan is, how will it manage to spread risk across healthcare companies? If we have an open marketplace with hundreds of companies competing for the same customers, but none of them can refuse customers based on pre-existing conditions, some companies are bound to have more sick people on their rosters than others. In this economy, the single most important determinant of an insurance company’s success will be how many sick people it has, and those with too many will fail while those with not many will succeed. So while outright discrimination will be illegal, companies will use every tool they can to get more healthy people (offering incentives like free gym membership, partnering with colleges and young/healthy companies, advertising in affluent areas…)

Under that system, the companies that are successful at attracting healthier people with expensive ad campaigns and good strategy will succeed and all others will fail; I would think the natural equlibrium in that kind of economy would be a very small number (2-3) of very powerful companies–not the marketplace Obama hopes for. Any flaws in my logic?

Clarification: The above argument assumes that the plan Obama has in mind does not allow insurers to charge whatever they want based on pre-existing conditions. I don’t see Obama signing a bill that allows insurers to charge 3x higher premiums for obesity, 5x for Diabetes, and 20x for Cancer. If that somehow became the system passed, though, this wouldn’t be an issue.

Comments

comments

4 Comments to “Healthcare: risk distribution, fast food, and Joe Wilson”

  1. Maha 13 September 2009 at 12:47 am #

    More complete/wonky answer to your question than the one I gave in person earlier: there are four proposals floating in Congress right now, and then there’s the version Obama outlined. There is the Wyden bill, which I and most policy wonks love, but no one takes that seriously/Obama rejects it–it’s so awesome/radical that it’s impossible to characterize as liberal or conservative. Since Obama has rejected it, and did so again on Wednesday, let’s leave it out of this.

    What remains: There is the House Ways and Means bill, which is the most liberal bill. There is the House Health Education and Labor Committee (HELP) bill which is a center-left bill. (Note: Ted Kennedy was behind the HELP bill, not the super-liberal one, something most progressives forget). And there is the Senate Finance Committee bill, which is the most conservative bill of the three in play right now, but is really just dead center.

    Of those three, all would bar insurers from rejecting people based on preexisting conditions but only the most liberal one (House Ways and Means) would bar them from charging people more based on risk. What Obama outlined on Wednesday seemed vaguely a cross between Senate Finance and HELP, and both of those bills would allow them to price for risk.

  2. Mike 13 September 2009 at 1:20 am #

    How do they plan to legislate how much can be charged?

  3. Maha 13 September 2009 at 2:16 am #

    The Ways and Means bill plans to simply outlaw any pricing based on risk–they’d have to charge everyone the same rate and they’d have to take all comers, which means rates for everyone would go up, and most people would opt for the public plan. It would put all the insurers out of business. That bill is designed as a back door to single payer.

    The other two bills (which are a better indication of what we will get) have no restrictions, so they’d probably result in something like the scenario you outline–where someone with cancer would find it 20x more expensive than you or I. That means THOSE people might very well opt for the government plan, so the taxpayer would pay for them directly.

  4. Tom Degan 13 September 2009 at 8:56 am #

    This is all about the underlying, hideous factor of the racism that is so deeply ingrained in the American character. The attempt to portray this president (Of all people!) as a socialistic, left wing extremist doesn’t even pass the giggle test for people who have bothered to pay attention to their times and their history. Let’s face it – Franklin D. Roosevelt, he ain’t! They can’t obstruct his agenda with a manufactured scandal regarding his personal life, as they did with Bill Clinton. eleven years ago. Their only hope is for enough of the American people to become really frightened by the Big, Bad Negro Commie. An ironic description when one takes into consideration how boringly moderate Obama really is.

    Think about this: In the last presidential campaign only one of the nominees of the two major political parties was born in the United States – Barack Obama – John McCain was born in Panama. Do you find it as revealing as I do that it was the black guy had his citizenship called into question? How much more proof do we need of the overt racism that is inherent in that party – or in our own country for that matter? Honestly, this isn’t rocket science, folks!

    But wait! It gets better! Now Glenn Beck is slated to become the Martin Loony King of the Far Right thanks to his stupid “March on Washington” yesterday.

    Isn’t life interesting?

    http://www.tomdegan.blogspot.com

    Tom Degan
    Goshen, NY


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