Krugman on the health bill

[ProSense]

Krugman

1. It’s petty and silly, but after what seems like a whole adult lifetime in which Central Casting insisted that major politicians be either Southern gentlemen or Midwestern heartland types, it felt good to watch and listen to Chuck Schumer, speaking the language of my roots, at the victory press conference — even with that green tie. Noo Yawk Roolz!

2. More seriously, Jon Chait is right: this is a great achievement.

3. As expected, self-proclaimed centrists can’t bring themselves to say anything nice about a bill that delivers everything they claim to want. Many people have pointed to David Broder’s piece this morning; let me add a historical note. Back in 2006, Broder hailed the Massachusetts health reform as a “major policy success”. Now the Senate has passed a bill that is, broadly speaking, a better-funded version of the MA plan plus a major effort at cost control. Where’s the praise?

Anyway, a pretty good morning.

Broder wasn't hailing Mass' plan, he was writing a piece to hype Romney:

While he can point to a major policy success in health care, his relationship with the Democratic-controlled legislature that made it possible is in tatters.

Broder is a tool. Romney opposed Mass' health plan. He vetoed the major reforms in plan passed by the Democratic-controlled legislature, which then overrode his veto.

In fall 2005 as the House and Senate each passed health care reform bills.

The legislature made a number of changes to Governor Romney's original proposal, including expanding MassHealth (Medicaid and SCHIP) coverage to low-income children and restoring funding for public health programs. The most controversial change was the addition of a provision which requires firms with 11 or more workers that do not provide "fair and reasonable" health coverage to their workers to pay an annual penalty. This contribution, initially $295 annually per worker, is intended to equalize the free care pool charges imposed on employers who do and do not cover their workers. The legislature also rejected Governor Romney's proposal to permit even higher-deductible, lower benefit health plans.

On April 12, 2006 Governor Mitt Romney signed the health legislation.<19> He vetoed 8 sections of the health care legislation, including the controversial employer assessment.<20><21> Romney also vetoed provisions providing dental benefits to poor residents on the Medicaid program, and providing health coverage to senior and disabled legal immigrants not eligible for federal Medicaid.<22><23> The legislature promptly overrode six of the eight gubernatorial section vetoes, on May 4, 2006, and by mid-June 2006 had overridden the remaining two.<24>

link

[Oregone]

1. Ah, well gee, its just like single-payer, right Mr. Krugman?

teehee

[CreekDog]

4. he didn't say that

but if pretending he did makes you sound smarter and him dumber, well, we all have our needs. :eyes:

[Oregone]

8. "At this level of abstraction, it’s basically the same as single-payer."

Yeah, at that level of absraction...drawing arbitrary and meaningless lines on a page, sure. :)

[DJ13]

2. Krugman always likes his mandates

[Oregone]

3. Why would an economist like mandated and subsidized economic activity?

Strip away the health aspect of it, and the fundamental model being used here is a tad bit absurd to endorse so fully. Why not end homelessness like this? Hunger? Force everyone to buy products and cut the private providers sliding scale checks, if its such a solution

[DJ13]

5. It makes no sense to me either, but he DID support Hillary's HCR last year

Which is pretty much what this has become.

[ProSense]

6. Because

he's a sellout?

[CreekDog]

7. because we can cover about a 1/3 more of the uninsured with a mandate

and health care economists in particular have proposed the individual mandate, because it reduces the cost per person.

so, if your argument is to make his position seem ridiculous, it's actually yours that is the outlier.

i would prefer single payer but until it's in place and people use insurance to procure health care, there needs to be regulation of that system and assistance to people for their care and/or coverage.

[Oregone]

9. But whenever the private market fails to provide services to 100% of the population...

The government can mandate the individual purchase from the private market and subsidize the difference (Im getting abstract here). Can anyone tell me why a sane economist doesnt normally endorse this model of government intervention?

Why are we not solving homelessness with this? Can anyone imagine what may happen if everyone suddenly entered the market to buy a home, and everyone could with subsidies?

[CreekDog]

10. I don't know

but insurance and risk pools are not the same as the housing market, not by a long shot.

[Oregone]

11. You're right. Purchases are perpetual and the product doesn't last a lifetime

So both individuals and the government will be endlessly trickling money into these private companies, and some of which will be trickled to private shareholders who are not materially involved in "production". This is the price the government must pay private people for doing the job (albeit inefficiently) that the government should be doing in the first place.

But there is still a product being bought here individually with a guaranteed demand level and a government to ensure those prices are met. The market is significantly augmented, and the consequences could be as unexpected as switching to LED lights in a green fervor.

[ProSense]

12. "Why are we not solving homelessness with this? "

Obama answered that question well, first make it affordable, which includes subsidies. It's realistically possible for the government to subsidize health coverage. Some people will pay little to nothing for coverage.

Are you suggesting that the government subsidize the cost of home ownership beyond what is realistically possible?

Subsidized housing will not end homelessness unless you are suggesting that the government begins to offer free housing.

Edited to add: It's interesting to look at how other countries are dealing with homelessness.

[Oregone]

14. I'm simply asking why subsidizing and mandating economic activity is permissible/effective...

in this context, but not others, as a model of economic activity. I'm talking very abstractly here, being that Krugman is, after all, and economist. There are many other scenarios where this approach would cause a 100% distribution of goods also, but likely have disastrous effects on pricing and thus, severely drain government/personal funds.


"Subsidized housing will not end homelessness unless you are suggesting that the government begins to offer free housing."

Haha....government "offer free housing"? But thats not whats happening here. The government isn't offering health insurance. Its paying the private market to provide it. The government is essentially saying that whatever overhead, inefficiencies, profits, etc, are "worth" it to preserve capitalism. Yes, even you realize that government housing is the more logical solution to "Universal Housing". For some reason, we are stuck with a bill where mandated and private market activity is the solution to "Universal Healthcare"

[ProSense]

16. "The government isn't offering health insurance. Its paying the private market to provide it. "

Newsflash: Medicare

Since the beginning of the Medicare program, CMS has contracted with private companies to operate as intermediaries between the government and medical providers.<5> These contractors are commonly already in the insurance or health care area. Contracted processes include claims and payment processing, call center services, clinician enrollment, and fraud investigation.

[Oregone]

17. A tad different....very different

Ok, I'm looking at an economic model where millions are individually mandated to purchase a services, and the government subsidizes it.

In the instance you cite, the government is the sole purchaser/contractor of those private companies, on behalf of the people.

So, to look at the mandated/subsidized model of housing, this would dictate people would buy homes from the private market & the government cuts a check each time. But, as you cited with Medicare, that would suggest the government would hire out private contractors to build homes that they give to people (clearly more efficient).

So...I think you are mixed up here with that counter-example, which actually just further illustrates how off kilter this approach is

[ProSense]

18. It's exactly the same thing.

We were discussing subsidies, and the specific reference to paying nearly all or the full cost of coverage for some individuals.

[Oregone]

19. Then you must be in the Krugman "hackerish" plan == Single-Payer camp

But apples are not oranges.


The government providing a social services (even using sub-contractors) is very different than the government providing subsidies for individuals to buy from the private market.

[ProSense]

20. Great rebuttal. n/t

[Oregone]

21. Ditto

Though I didn't expect you to go into depth to prove that apples are the same as oranges, or that subsidized individual purchases are the same as a government social service.

[Orangepeel]

13. that analogy sounds witty but doesn't make sense to me

almost everybody does pay for housing. If they don't buy a house they have to pay rent. We try to solve homelessness by subsidizing rent and/or opening more shelters. This bill has subsidies for insurance and expands community health centers.

I don't support an individual mandate myself, even if there is a public option, although I understand the reasoning behind it. That analogy, though ...

[Oregone]

15. Cars, play-stations, food, whatever....

Whenever the private market fails to provide 100% distribution of goods, why does the government not mandate and subsidize the purchase of the goods. I'm not making an analogy. I'm talking about a specific economic model that is at play here. What are the benefits and drawbacks of this model in most cases. Briefly, and most obviously, the benefits are full distribution of goods, and a major drawback is that private market costs of doing so (that are spread among both the government and the people)