Professor Mark J. Perry's Blog for Economics and Finance
More competition among health insurers is a consummation to be devoutly wished. But there are better ways to get there than a public option. Here are three:
■Tear down the barriers to buying insurance across state lines.
■ Repeal mandatory benefits that make health insurance needlessly expensive.
■ De-link health insurance from employment.
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
20 Comments:
You try to do the last two and the same townhall crazies who were rallying against the public option will be rallying against you.
"You try to do the last two and the same townhall crazies who were rallying against the public option will be rallying against you"...
What crazies?
Didn't you realize that these 'supposed crazies' were rallying against you and your ilk?
These same said 'crazies' are tired of financing society's parasites...
You try to do the last two and the same townhall crazies who were rallying against the public option will be rallying against you.
You are absolutely clueless.
These are exactly the reforms they've been protesting in favor of.
For the last 9 years or so I have been watching a tag team match. The team members are the politicians, the unions and the community activists like ACORN. They are pummeling the guy in the middle of the ring. The guy in the middle of the ring is the taxpayer.
Interstate sales doesn't make sense unless you have a national minimum standard--otherwise, people buy something called insurance and it is not. There is a long history of this practice and that's why minimum benefits have been set by state.
Unfortunately, interest groups (dermatologists, chiropractors) lobby and get their stuff added.
Better to set a very minimum at the national level, probably using NIH rather than the legislative process. Then interstate could work.
"Interstate sales doesn't make sense unless you have a national minimum standard--otherwise, people buy something called insurance and it is not"...
So 'caveat emptor' isn't for you, eh?
And you want the federal government (NIH) to interfer too...
Hmmm, isn't that how we got were we are now?
What crazies?
Didn't you realize that these 'supposed crazies' were rallying against you and your ilk?
These same said 'crazies' are tired of financing society's parasites...
You guys completely don't get it. The rallying cry of the townhall crazies was:
"I don't want socialized medicine! I don't want my country to be like Russia. And don't you DARE TOUCH MY MEDICARE!!!"
"You try to do the last two and the same townhall crazies who were rallying against the public option will be rallying against you."
Well, this brings back memories. You know, in my homeland - the late great Soviet Union - anyone who was against any government plan was also a "crazy".
Maybe we should re-educate those nuts, huh? Let's start with forced voluntary service to the state.
Well, this brings back memories. You know, in my homeland - the late great Soviet Union - anyone who was against any government plan was also a "crazy".
The reason I call them crazy is because, well...they are crazy.
They don't want government run healthcare because they are afraid that that will mean their Medicare will be taken away. No point of explaining further here.
Interstate sales doesn't make sense unless you have a national minimum standard--otherwise, people buy something called insurance and it is not.
Yes, by all means let's let the wise and all knowing politicians decide what a minimum is for the mouth-breathing, knuckle-dragging masses. God forbid we should allow people to actually make their own decisions instead of the always wise, cool-headed and never self-interested saintly politicians who will protect us from ourselves.
"They don't want government run healthcare because they are afraid that that will mean their Medicare will be taken away. No point of explaining further here."
Yes, that's what ALL of them thought. Because you heard one guy screaming that, it's obvious that's what ALL of them were saying. People are just one big undifferentiated blob to you, eh?
"You guys completely don't get it. The rallying cry of the townhall crazies was:
"I don't want socialized medicine! I don't want my country to be like Russia. And don't you DARE TOUCH MY MEDICARE!!!"
It's not that we don't get it. It's just that we didn't rely on the MSM to selectively report the town hall meetings to us, so we know that wasn't the rallying cry.
@Methinks,
You are probably totally unaware of the problems in insurance during the 30s and 50s on this subject of minimum standards.
You are probably also unaware of the role state insurance commissioners play in mediating disputes with insureds, and how interstate sales would mean that the originating state (say Missip) wouldn't be able and wouldnt do anything about a policyholder in Penn or Ohio. Talk is cheap, particularly if you are clueless about past practices and current problems of enforcement.
"I don't want socialized medicine! I don't want my country to be like Russia. And don't you DARE TOUCH MY MEDICARE!!!"...
So what you are saying mach999 is that you aren't entirely clear what Reid, Pelosi, Obama are trying to foist off on this country, right?
Would this picture help?
juandos,
That picture tells me nothing that I don't already know. And what you should focus on most there is what the percentage of private/public spending is right now. As of this moment, 46% of healthcare spending is done by the government.
And again for the people at those townhalls, I would say 80% of their healthcare spending is done by the government and somehow they love their system so much that they are willing to protest ANY changes to it.
And take for example the most common horror story brought up by health care reform opponents. The hip replacement surgery. The thing that you will never ever get under Obama's plan. Except for the fact that a majority of hip-replacement surgeries right now are paid for by the government...
The minimum standards mentioned in the posts above are actually know as Standard Policy Provisions.
Standard Policy Provisions are very similar among the States. Where coverage deviates is in regards to the many and several States having differing Mandated Coverage beyond Standard Policy Provisions.
The Mandated Coverage differs as the different states have been lobbied on different topics. One state will have a certain mandate that another state does not have in place.
The mandates change the Scope of Coverage which then increases cost.
The Mandated Coverage, in many cases having been introduced through lobbying efforts for people with specific needs, are generally coverage that is afforded to a narrow population of insured’s. That is, most insured’s do not have the use for the Mandated Coverage.
Over time, many States have legislated a whole menu of Mandate Coverage. With the Mandated Coverage Menu, you are now offering coverage to a series of narrow populations in relation to the general group of insured’s.
The narrow Mandated Coverage is clearly a cost driver.
Some Mandated Coverage is broader and many of the insured population benefits. But in these cases, the Mandated Coverage becomes a major cost driver.
These is an argument than Mandated Coverage, or Menu of Mandated Coverage should be available as an Endorsement or Rider. Those people that want the coverage will find the coverage available and can purchase the Mandate. Others that find the Mandated Coverage of little use to them, opt not to buy the endorsement.
The argument also exists that a Major Medical Plan with Standard Policy Provisions is plenty of coverage for a large percentage of people. Further, the Major Medical Plan with Standard Provisions is much more affordable.
Buying across state lines is a much more simple proposition then outlined above in several of the comments. The policy has a “coverage territory”. The coverage territory is generally all 50 states and all US possessions, and between ports of those States and US Possessions. Overseas coverage varies. Hence the policy functions both intrastate and interstate. Further, Standard Policy Provisions are rather uniform among the States.
Hence Joe wants a basic policy. Joe lives in Pennsylvania which has a menu of Mandates. Joe finds insurance too expensive in Pennsylvania. Another State has few mandates and the coverage suits Joe’s needs and the price is appealing. Under interstate competition Joe could buy the policy that fits his consumer preference. The Standard Policy Provisions would be similar. Joe would be covered due to policy territory.
The Standard Policy provisions would probably not be the same if one state's insurer saw it to an advantage to change the terms and lobby the commissioner to change the Standard provisions.
I have no problem with a national standard using the standard policy provisions, and then letting states have riders.
you still have a problem with commissioners enforcing other state provisions and not being helpful to the insured.
And again for the people at those townhalls, I would say 80% of their healthcare spending is done by the government and somehow they love their system so much that they are willing to protest ANY changes to it.
Get a grip. The government has been forcibly confiscating a portion of our paychecks with the promise to provide some minimum level of care in the future. This is money that "the [older] people at those townhalls" could have used to provide private health care for themselves in their old age had they been given a choice. Instead, they have been forced into a socialized system destined for bankruptcy. They've been made vulnerable and don't want the government squandering scarce resources on another ponzi scheme.
The Democrats rallying cry has been "Medicare for all". That's what is crazy.
Fun in the Library states…
“The Standard Policy provisions would probably not be the same if one state's insurer saw it to an advantage to change the terms and lobby the commissioner to change the Standard provisions.
I have no problem with a national standard using the standard policy provisions, and then letting states have riders.
you still have a problem with commissioners enforcing other state provisions and not being helpful to the insured“.
Library:
Point taken. However, enter Political-Economy. The States retained Insurance as a State Right. The States, being good little taxation entities, have a Premium Tax at an average rate of 3%. Yes Library, when you pay your insurance, about 3% is tax. Little did you know. The States will never give up that revenue as its very, very significant.
mach999 notes: "And what you should focus on most there is what the percentage of private/public spending is right now. As of this moment, 46% of healthcare spending is done by the government"...
I've been focusing on it for quite sometime...
In fact I also reminded folks quite recently that sizeable portion of those extorted tax dollars are being wasted...
"And again for the people at those townhalls, I would say 80% of their healthcare spending is done by the government and somehow they love their system so much that they are willing to protest ANY changes to it"...
Well maybe what you don't understand (mind you I'm just guessing here what might be your problem understanding the protests) mach999 is that these protesting people don't want a bad plan replaced with a worse plan...
Thanks for you replies mach999...
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