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My alternative to universal healthcare
los angeles, california, bamboo, huntington gardens
I propose that everyone who wants universal healthcare band together and create their own, supplementary, opt-in government to provide it. This new government would be entirely funded by people who opt in to it. In other words, people can choose whether to participate or not. The U.S. government should repeal any laws that make it difficult for this new government to exist.

Does that sound good?

This proposal is my alternative to the universal (e.g. government-provided) healthcare. Whenever someone says they are in favor of universal healthcare, I am going to tell them my alternative proposal and ask them which of the two they would prefer. In this light, I think that any argument they use in favor of universal healthcare will reveal something wrong with their personal morality, ethics, or values.

Don't take it too personally if you fall in to that category: lots of people have incorrect moralities. Morality is not something you are born with, it's something you have to learn. You usually learn it wrong the first time, but we can learn it properly by engaging in discussions like this.

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Ok, I'll bite. How would this government differ from an insurance company? It seems to me that if you change "government" to "company" and add "by paying a premium" to "funded", it's basically an insurance company.

Am I wrong in this regard? My understanding is that universal healthcare would function similar to road maintenance; all citizens would pay a tax based on their annual income, and doctors would either become government employees or unionized. The "Department of Health-care" would then be able to control the maintenance of tools, collection and disposal of consumables, and pay rates of the doctors.

Research of new technologies would be funded by government grants to promising third party research companies in a fashion similar to the "DARPA Challenge", rather than paying large pharmaceutical corporations. The rights to the new technologies would become property of the United States Government, thus lowering cost of reproduction due to copyright laws and arbitrary pay hikes. Need I remind you that from 2000 to 2006, inflation was 18%, wages increased by 20%, and medical bills increased by a whopping 87%. that's over 4 times the rate of pay increases.

My personal opinion, simply put: Our very LIVES are in the hands of large corporations who's sole goal is to make money, not to keep America healthy. All peoples should have equal access to treatment for disease and injury. If that is immoral in your view, then we disagree on this subject by a substantial amount.

Thanks for the thoughtful response.

Because this separate government would be founded by former universal healthcare advocates, I can imagine several ways that this separate government would differ from a regular insurance company. For example, the price you pay for coverage might depend more on your income and your age rather than just on your statistically expected healthcare costs. The new government would probably make decisions in a more democratic way than most insurance companies, by allowing its member/customers to vote. They might choose to have their own "congress" that is elected by the members, or they might decide in advance to follow all orders from the U.S. congress. In conclusion, there are many reasons why universal healthcare advocates would prefer my proposal over a traditional healthcare company.

Why did medical bills increase so much from 2000 to 2006? Your comment doesn't say the reason. In general, rising bills for goods do not necessarily imply that we are getting "cheated" by the producers: I think that American spending on portable MP3 players followed a similar trend from 2000 to 2006. Maybe healthcare costs rose because private companies invented ingenious new healthcare technologies and they are expensive because there is a huge demand and small supply. Part of the reason there is a huge demand is because our tax system encourages over-consumption of healthcare (you can pay for healthcare with pre-tax dollars).

Currently your very LIFE is in your own hands. Make your own decisions, be your own person, and search around for your best options. But don't force me to put my very LIFE in to the hands of a single large government whose sole goal is to win elections rather than keeping me healthy.

And please don't nationalize healthcare R&D: that would certainly kill innovation in that field in the United States. Innovation is best left to a competitive marketplace where the best innovators have a chance to win big, instead of being directed by a single bureaucrat. When a private innovator makes a mistake: he loses. When the head of the "Department of Health-care" makes a mistake: we ALL lose.

Ok, we'll go with non-profit rather than company, or perhaps a co-op since you would be signing an unusually wide-ranging contract to join it. What makes a government a government is the fact that the only way to opt out is to move. The plan you described does not work that way, and so the aforementioned terms describing it are all more accurate than the term "government".

So anyhow, having a non-evil insurance company is a good idea, but I imagine that the cost to enter the insurance business is a prohibitive barrier to entry. You wouldn't want to create a new insurance company that only works at one hospital and with one employer.

It makes sense that health care costs rose from 2001 to 2006. It makes less sense that they continue to rise even when we are no longer in boom times. I don't think you can argue that the quality of health care is rising in proportion with the costs; if anything, coverage is getting less comprehensive and insurance companies are coming up with ever more creative ways to exclude people whom it would be expensive to insure (that is to say, sick people). I think you have this idea that since the current system is private, it is the best possible system. Fact is, health insurance companies operate in nothing approximating a free market. One reason is that they are highly regulated, but the other reason is that there is a dearth of competition due to high entry costs and (probably) anti-competitive behavior.

Premiums are also high because healthy young people tend to abstain from purchasing health care. As is the case with most insurance choices, abstaining is a behavior with a positive expected value but a high potential downside -- in this case, getting a random expensive disease. If you want to reduce premiums, it's not necessary that you obligate everyone to buy health care from the government (this is the single-payer system favored by, say, Kucinich, and used successfully around the world), but two things are necessary:
- a universal mandate that you buy health care from somewhere
- a government-run health care plan that exists as competition to the private insurance companies. (This is more or less what you described.)

Circling around to the original post, it's easier to say that someone's ethics and morality are wrong, but it's harder to say that someone's values are wrong. We both are presumably moral and ethical people, but I value the right for sick people not to die from treatable illnesses due to unemployment more than I value your or my right to abstain from a particular government service.

Hey Jacob, thanks for contributing!

I'm okay with you calling my proposed entity a co-op.

You are right that our current health care system is not fully private (for example we have mandatory coverage laws that require health plans to provide certain health care products). That's why my proposal states that the U.S. government might need to repeal some laws.

I am not arguing for the status quo. I'd like to frame this conversation as a debate between government-provided health care of any kind and my alternative proposal. Neither of these two options is the status quo.

I'm inferring from your post that you prefer government-provided health care over my proposal for these reasons:
1) Barriers to entry.
2) High premiums.

Regarding barriers to entry: I think your point was that my proposal might not work because of barriers to entry in the health insurance market, but you did not describe what these barriers are, so I'm not convinced. If you have a comprehensive business plan that can truly help the 46 million Americans that are uninsured and earn the support of the millions who advocate universal health care, and Barack Obama mentions your organization in a speech, there's a very high chance that you are going to be successful and surpass all barriers to entry.

Regarding high premiums: I don't think premiums will be a problem. The co-op I'm proposing can pay the costs of the health care it provides by raising the price charged to higher-income members while lowering the price paid by the lower-income members. The higher-income members will tolerate this because—being former advocates of universal health care—they are happy to pay extra if it benefits those who are less fortunate.

Why do you think that requiring everyone to buy health care will make premiums go down? Whose premiums will go down? Certainly not the people who are paying zero now: their premiums would go up when they are forced to pay a positive amount. Also, if everyone were forced to buy bananas, the cost of bananas would definitely go up; why is health care different? Maybe you can point me to an economics paper that explains the important differences between the banana market and the healthcare market in this regard.

Regarding your final remarks: In this case, your current values are wrong. I'm hoping that I can convince you of that because you're my friend and if you have better values then you'll have a better life :)

I'm going to jump into this debate by addressing a few specific points you made.

I think your banana analogy (bananalogy?) is a little off. It's more like this: Suppose some people need to eat more bananas than others, so you force everyone to pay for bananas even if they don't need them; that way, the people who need lots of bananas don't have to spend an overwhelming amount of money on bananas.

I'm interested in your "opt-in" idea, but I don't know if it would work if the majority of people who opted in were "risky" people (borrowing ideas from anon and athena below). I'm interested in your response to athena's question too - "are you suggesting that we should be able to opt out of all government services"? After all, isn't the point of a government to have people sacrifice individual "freedom" for the "greater good"? This may be dangerous territory here - I'm not saying such sacrifices should be made limitlessly or unconditionally - but how do you decide where to draw the line?

Hey Kevin! Thanks for the response. I think your interpretation of Jacob's meaning is correct: his health insurance mandate might reduce the premiums for people who need lots of healthcare but increase total premiums and total underlying costs. But my bananalogy still serves to shed light on one possible misinterpretation of Jacob's words.

Since it is easy to misinterpret Jacob's words when he says his plan will "reduce premiums", I think you or Jacob should change the wording to be more clear: you should instead claim that the plan would "financially benefit the sick at the expense of the healthy" or something like that. It doesn't sound so good anymore now that I've said what it really is! After giving the correct effect of the plan, you should identify the conclusion that you want me to reach (i.e. supporting a health insurance mandate, which is actually an independent issue from my original proposal).

My original proposal states that everyone who wants universal health care would opt in to a new co-op that provides health care to them. I'm assuming that enough of the universal health care advocates are healthy (as opposed to "risky") to make the plan work, but if I see contrary statistics I might revise my arguments.

I feel like I've spent more words defending my proposal than telling you how it would be better than universal health care. Are the benefits of my proposal obvious to you? Have I assured you that the problems are small? If so, you should support my proposal over universal health care.

I think the financial discussion is mostly taking place in the thread below (see my latest post(s) there).

Could you please explain what your values and morals are that lead you to think that Jacob's are wrong? Personally, I find my morals and values to be more in line with Jacob's (the right for people with treatable illnesses not to die because they can't pay rather than my right to abstain from government services), but maybe I don't understand your values that support your conclusions. Besides, most of Jacob's arguments seem pragmatic rather than value based.

Hey Anna, that's a good question! See my response in the new Values thread which I just started, and respond there.

But my values do not support any of the conclusions in this post. My conclusions in this post are supported by logical, pragmatic arguments. Therefore, you should be convinced that my proposal is better than universal healthcare, even if you don't share my values. Have I convinced you yet?

The point of universal health care is distribution of risk over a large pool

small cooperatives do not distribute risk over a large enough pool.

I'm not sure that I understand how your system would work. If a person has a pre-existing condition, would they be allowed to join your "government?" As far as I can tell, one of the main points of universal health care is that those who have expensive, pre-existing conditions would be able to get coverage because the cost would be distributed over a larger number of people. So basically, I don't see how your proposal is any different from the insurance companies that exist now, unless they are not allowed to exclude people with pre-exisiting conditions, in which case, it seems that your proposal would not be financially feasible. Perhaps you could explain the logistics of your proposal in greater detail?

Also, if we take your reasoning to its logical conclusion, we should be able to opt out of all government sponsored services. For example, we should not have to pay property taxes that support public schools if we do not have children in public schools. However, I think it is good that people are required to support public education because it makes a decent basic education affordable to the general population, so that we have, at least in theory, an educated workforce. (Whether public schools do their job is another debate all together that I'm not going to get into here). Those who have no children, or choose to homeschool or send their children to private schools may complain about the property taxes, but I think that it is beneficial to society that the cost of education is distributed over the community.

So are you suggesting that we should be able to opt out of all government services or is it just health care?

Hey Anna!

Because this new government would be founded by former universal healthcare advocates, I don't think it would discriminate against people with expensive pre-existing conditions. If you want to see some other ways my proposed new government might be different from insurance companies that exist now, you should read the second paragraph of my first comment above. The new government would be financially feasible because everyone who wants universal health care would support it (as I said in my original proposal). I'm assuming that there are millions of people who favor universal healthcare and enough of them are employed to make the plan feasible, but if I see contrary statistics I might revise my arguments.

I'm not suggesting that we should be able to opt out of all government services. The second paragraph of your answer manifests a straw man fallacy, but I think you know this and that's why you added the question at the end.

Re: health insurance

But it wouldn't be as financially feasible because not everyone would be required to contribute to health care costs.

You are required to pay taxes to support the police department even if you never require the services of the police. If only the people who called the police had to pay them, it would cost more for each of those people. Similarly, not requiring everyone to pay for universal healthcare presumably raises the costs of healthcare for people who need it. We could theoretically lower the burden on each individual by requiring everyone to contribute.

Re: health insurance

That was me, forgot to log in.

Also, athena = Anna D? Hi Anna, this is Kevin.

Kevin, there is a gap in your argument at the word "presumably". Why do you presume that requiring everyone to pay for universal healthcare could theoretically lower the burden on each individual?

This presumption contradicts the implication in your first comment where you said that a mandate would lower costs for those who need to buy the most healthcare, but you didn't talk about what it would do to the rest of us. When you made that omission, I thought you understood that the price of health care would go up for the rest of us.

This presumption also contradicts the bananalogy I made after Jacob's first comment.

Let's re-explore the banana analogy. It's all Econ 101. If the government forces everyone to buy "banana insurance", then the marginal price of a banana to you (the price of buying one additional banana) would go down because the insurance would pay for part of your banana. So let's say that instead of paying $.50 per pound for each additional banana you consume, your copay is only $.25 per pound. If you are behave rationally, this will make you purchase more bananas than you did before. Even if you behave irationally, the 300 million other Americans will, on average, purchase more bananas. As grocery store owners realize that the bananas are flying off the shelves faster than they can be restocked, they will start ordering more bananas. As farmers start selling their bananas faster than they can be grown and having to turn away buyers because they ran out of bananas, the farmers will raise prices. In turn, the grocery stores will raise their prices. Basically, higher demand causes higher prices.

Prices (the amount the consumer pays) and costs (the amount of labor/material it takes to grow, ship, and sell the banana) are different things. But rising prices will cause rising costs. It's easy to see why this is true. Let's say the price of bananas rises from $.50 to $.75 per pound. There are marginal orchards in the world which are not great for growing bananas. Imagine some land where it costs $.60 per pound to grow bananas because you have to maintain an expensive irrigation system. Before the banana insurance mandate, it was not profitable to grow bananas on those lands, so they were put to other productive uses. Thus the average cost of growing the bananas was kept below $.50 by the market. After the banana insurance mandate, many of these lands will be converted to growing bananas, which means that the average cost of bananas in general could easily rise above $.50. Basically, increased prices cause increased costs.

Everything I've said about bananas can easily be applied to health care. A mandate would make the salaries of all health care professionals increase because there would be an increased demand for their services. Some professionals will choose to retire at a later age than they would have otherwise. Some people who would have become computer engineers will instead become MRI technicians. Basically there will always be these "marginal" people who are on the verge of switching careers or retiring, and a change in the price of health care will change their minds. There are also marginal hours: a change in the price of health care would cause doctors to work at times when formerly they would be pursuing other interests. The average cost of health care services will go up because all of these additional marignal resources would be consumed to provide it.

Therefore a universal health care mandate will not reduce health care prices for every individual. Kevin, you should either agree with this conclusion or tell my why my banana analogy is wrong.

Re: health insurance

Sorry, I left out a critical word which changed the meaning of what I said. I meant to say that universal healthcare could lower the maximum burden on any given individual.

However, you raise a good point that if healthcare were subsidized, there would be much less incentive for people to avoid over-consumption of healthcare (as you put it), and therefore the net burden on the population could very well increase (even if it is more evenly distributed). After all, if the country will pay for your bananas, what's to stop you from taking as many as you want? (Other than your conscience, maybe.) I don't have a good answer for this at the moment.

In an ideal world, I think healthcare would be completely privatized (to encourage cost-lowering competition) and anyone who couldn't afford proper medical treatment would have a network of family, friends, and good samaritans ready to voluntarily support them through the kindness of their hearts. Unfortunately, the real world rarely works this way, and I think universal healthcare is sort of an attempt to force people to be charitable. But it's very much an imperfect approach that creates problems of its own.

So my banana analogy stands, and I got you to clarify what you meant. Cool.

I'm glad you agree that universal health care is an imperfect approach that creates problems of its own. Does that mean you support my proposal over universal health care?

Re: health insurance

I see no reason to object to it (considering that it's voluntary). But I don't think it would work very well, at least from a purely economic point of view. Consider:

- it only makes financial sense to join this co-op if it would lower your healthcare costs
- the only way your healthcare costs could be lowered is if someone else picked up the slack by paying more
- but nobody would join to pay more since that goes against the whole point of the co-op.

So it seems that unless there are enough nice people to join for philanthropic rather than economic reasons, it wouldn't really work.

Remember that my proposal said that the advocates of universal healthcare would be the ones who form the co-op. So if my plan is not possible, it's because the advocates of universal health care are not actually willing to pay for universal healthcare. Does that satisfy your objection to my proposal?

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