Tweet
Ezra Klein has a new, strange, and incorrect defense of the individual mandate in the Senate bill:
I think some on the left would say that they just want to remove the individual mandate. But if they do that, then the healthy will leave the plan, and the average premiums will be the average premiums for unlucky people, like this reader, and those premiums will quickly become unaffordable.
The argument simply does not fit with the language in the bill, and is pure nonsense. How much average premiums cost on the new subsidies exchanges have almost zero effect on how much any individual below 400% of FPL would pay for their individual premiums.
In the bill, tax credits are based on percent of income limits. For example, someone making $32,500 a year (300% FPL) would get sufficient tax credits, so that the second cheapest “silver” plan would cost them only $3,185 (9.8% of their income). Now, if that plan cost $3,300, the tax credit would be $115, but if that plan cost $8,000, the tax credit would be $4,815. Either way, this individual is paying the exact same amount of money for the insurance plan, regardless how much it technically costs.
As long as premiums exceed the tax credit thresholds for everyone in the individual market below 400% of FPL (and every indications is that they always will) the technical cost of the premiums is irrelevant. The only people who would be hurt by slightly higher premiums on the individual market exchange is the extremely small group of people with incomes above 400% FPL and no employer health insurance. In the Senate bill, the exchange for small business is completely separate from the individual market exchange and its risk pool, so there should not be bleed-over into the small group market.
The argument that removing the individual mandate would price unemployed people, like the reader, out of the individual market is not true. Even if the individual mandate technically held down premiums on the exchange, it would not affect how much the vast majority of people using the individual market exchange would personally pay.
Most importantly, the individual mandate does not go into effect until 2015. I’m simply arguing progressives hold it hostage in exchange for better reforms down the road. The industries will have four years to offer progressives better reforms in exchange for progressive support of the individual mandate. There is no need to pass that provision now since it will affect nothing until 2015. This is how you lay a strategy for “fixing it later.”
33 Comments
Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About FDL Action
JOE LIEBERMAN’S OFFICE PHONE in CT is 860-549-8463. I just left him a message stating I think he is a total sellout piece of crap for what he did to health care reform. The girl who answered the phone said she’ll give him the message. FEEL FREE TO CALL HIS OFFICE and voice your displeasure. 860-549-8463.
Boy the WH hit squad is clearly working the phones & e-mails overtime to reach “thinkers” such as Klein.
Wonder if he’d like to appear on MSNBC this afternoon with Marcy or Jane to “debate” the merits of his position?
Can Mr. Klein explain what’s in the Senate bill to keep premiums from doing that even if the mandate stays in? I’m sure those private, for-profit insurance companies are going to pass a huge savings onto us once their profits go through the roof with all those new customers. I mean, they have to keep their customers happy, right? They don’t want those customers to stop patronizing them…. oh, they’re legally REQUIRED to patronize them. So much for that incentive for customer satisfaction.
I’m glad to see a rebuttal to his piece. I had a feeling something was off about his analysis, but I didn’t know what it was. And I feared that perhaps I was just being anti-Ezra, because more and more he seems like a stooge.
The real reason for the mandate is that Obama promised the industry 94% coverage. Sad but true.
Jesus, this number-crunching and jargon-juggling is making my head hurt. The whole fucking point of having elected representatives is so that they can work out all this nonsense in good faith. If we can’t trust our elected representatives to represent us, then what’s the point of hashing out inscrutable details like whether the cost overrrun bonus deficit will cover the extra add-on deductible fee basis costs? Whatever we demand will get watered down and triggered and basically eliminated. We basically HAVE no representation in DC.
I can see our protest banners now: “NO SLIGHTLY HIGHER PREMIUMS ON THE INDIVIDUAL MARKET EXCHANGE AMONGST THE EXTREMELY SMALL GROUP OF PEOPLE WITH INCOMES ABOVE 400% FPL AND NO EMPLOYER HEALTH INSURANCE”. That’s catchy stuff!
Ezra got flipped and started shilling for the Industry the moment he joined the WP.
Thanks, Jon.
I spotlit your last takedown of Ezra to Keith Olbermann (Tax Credit Structure Ensures Individual’s Costs are Same, Regardless of “Stick Price” of Insurance Premium
–by Jon Walker). I urge my fellow-pups to do the same with this one, since KO seems to be using him to the exclusion of other voices in this debate.
Thanks, pups!
FunnyWheelieDiva
Healthy people have no incentive to be in this game if they are only able to buy variations on existing private insurance products, which are faulty and fraudulent. Moreover, even many healthy people will not be able realistically to afford such insurance – and then still be forced to worry that it will pay out when needed, and without the usual multi-layered denials, delays and partial payments.
All in, that describes a product that in a real market, the well-informed with a choice would not buy. Which is why this administration and Senate are trying to force customers their way. Free market my ass.
A mandate works for the people when it’s run as a service on a not for profit basis! Everything else is transfer of wealth, period!
Ezra is a liar. And so is BHO. Their lies are the equivalent of the “mushroom cloud” argument. The worst is BHO’s lie that, if this bill doesn’t pass, the government will go bankrupt.
Dumb or duplicitous. One or the other. You choose.
Hey, Ezra, you’re a little young to be selling out, don’t you think?
Why not wait a few more years?
How affordable premiums are after tax credits depends on one’s tax liability for a given year. And that depends on your deductions. It is unclear exactly how medical deductions from gross income will affect the net taxes after tax credits.
Ezra needs to consult his tax accountant before claiming that he will be unlucky.
exactly Hawaii because of the employer mandate has 91% coverage. That is without the Medicaid expansion or subsidies to help people buy insurance. The senate bill will only produce 93% coverage according to CMS.
If the plan was to get to 99% coverage like netherlands with big subsidies that is one thing.
Ezra is starting to sound like a Villager. Once upon a time when he was co-blogging with Jesse Taylor at Pandagon he’d have never written crap like that. Fred Hiatt claims/coopts another one. Maybe he’ll be invited to Richard Cohen’s next cocktail pah-tay.
You need an advanced degree in math, statistics [and maybe quantum physics] to figure out who gets and/or needs what in order to qualify and/or not qualify to be considered and/or not considered for…what exactly?
Where do you fall into Esra Klein’s concoction?
That’s just another ingenious manifestation of a health care “reform” package that can be anything you want it to be in the “debate” over whether it really is what the opponents insist it’s not.
The sheer numbing complexity of all this analysis of something that would be moot if we had a single payer system in its place.
Convoluted complexity by design.
Jon Walker is right (as usual – he’s been the best analyst of proposed HCR legislation on the web), and Ezra is wrong. However, although premiums won’t become unaffordable for the insurance consumer, the subsidies will expand as a consequence of removing the mandate (unless people opt to pay the penalty rather than purchase insurance, which would simply perpetuate the problem of the uninsured) and will become politically unsustainable. The subsidies are a political liability for Democrats, and the size of the subsidies will come under attack almost immediately after enactment.
And your source for the details of what must have been a secret deal is what? Are you on the White House maintenance staff? A fly on the wall in the Oval Office? Are you one of those anonymous sources? An AHIP employee? An insurance executive? Psychic?
Klein (who is 12 years old or at least acts like it) is wrong. Under a PO-less system or one in which the PO is highly restricted, an individual mandate would NOT be required, since the private insurers would be free to set an appropriate price for the same sick high-moral-hazard consumer. Where private insurers get to set their own prices, an individual mandate is effectively double dipping for the insurers.. and is thus grossly unfair.
Klein would be correct if he had been describing what would happen if a PO to which everybody had access existed in an environment without an individual mandate (where a legislated premium price cap in a Medicare-like plan would be forced to accept high-moral-hazard insurees once they become sick). However, as far as I can tell, this is not what he’s talking about.
This is what happens when 12 year olds are allowed to make policy proscriptions to a national audience, which, for some strange reason, their elders must take seriously.
Right. There should be a basic, comprehensive plan that all insurers have to offer that is made available to everyone who wants it, and insurers should be forbidden from making a profit on that universal plan.
Does anyone know if there is even one Senator who has taken up Jon’s ‘take the mandate hostage’ plan? It’s a good idea. How did you come up with it? All it will take is one Senator who’s willing to vote no on cloture.
Also: is this idea getting airtime? I hope so. I sense that Obama’s pulling out all the plugs and was spending a lot of time on Snowe…who, by the way, was for weakening the penalty for not complying with the mandate.
Something tells me Ezra has not updated his self-image since joining the Post after it unceremoniously canned the too outspoken Dan Froomkin.
The Washington Post compensates well. If Ezra is an employee rather than independent contractor, he has coverage. If he’s independent, he has the money, but perhaps not the health or family history that will allow him to get it at a reasonable price. That should encourage him to see the Senate plan for what it is. What with working for Fred Hiatt, I guess it’s not enough.
Naturally! We all know that the DC paper which I will not name is a shill for corporate interests.
As we’ve been long repeating, focusing on the mandate is misleading without focusing on what it mandates.
The government might mandate a draft, for example. If it were for mandatory national service, with choices among the armed services, and a civilian conservation or teaching corps, for example, it might be met with universal acclaim, especially if the pay were minimum wage plus a year’s college tuition for eighteen months service. If it were a draft to fight wars of occupation in Afghanistan and Iraq, there would be protests in the streets, country clubs and city clubs.
The flawed, poorly regulated products now sold by insurance companies are not what individuals would buy had they a choice. Hence, the government coercion to aid a favored industry (almost a redundant phrase). If the government wants to use its powers of coercion, it has to provide choices people really want, not just what pads their pocketbooks or aids their re-elections.
We need to raise corporate taxes by 2% and then we can pay for a bulked up Medicare for all.
The insurers are not worth saving to the extent of mandating the purchase of an inferior product which insurers will identify loopholes in the legislation to create.
Love Dylan Ratigan’s take down of DLC stalwart Wasserman-Schulz’s bull.
http://rawstory.com/2009/12/ratigan-berates-wasserman-schultz/
I’m still wondering why anyone should care what a UCLA class of 2005 polisci BA (the first two years of whose college career was spent at UC Santa Cruz) has to say about healthcare policy. His bio says he was born in May, 1984.
Thanks for the insult, but my source for the 94% is the widely reported deal hospitals struck with Obama:
“Hospitals were promised that health reform would lead to near-universal coverage. Their deal is that they would accept cuts in federal payments if they could be sure that at least 94% of the people in the country have insurance to reduce their costs of treating uninsured patients.”
See for example:
http://healthcare.nationalreview.com/post/?q=ZGVhODBlYTQzNTJmYmJhYTBmYmU4ZjRhNTc5OTlkNGQ=
Politically I agree with your point. But I’d just note that the strongest argument against the individual mandate is that its a direct tax that doesn’t fall into the income tax exception created by the 16th Amendment, otherwise, direct taxes can only be imposed if they are assessed equally PER STATE. The only sort of mandate the federal government can impose is a tax on income (wage income specifically, in the case of the payroll tax).
I’m not sure its even legal for the government can draft citizens for anything other than military service. The Constitution gives Congress the power, “To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions”, its a stretch to shoehorn mandatory civilian service into this grant to impose mandatory military service. I think Harry Truman had the best idea, every young man spend 6 to 12 months in stateside Universal Military Training (UMT). At the end of the training period, he ones who take to military life can voluntarily enlist for a longer term, everyone else can go home and get on with their lives. But I digress. :o)
http://www.time.com/time/magazine/article/0,9171,776303,00.html
Hospitals aren’t insurance companies. There was a hospital deal, a PhRMA deal, and AMA deal but no AHIP deal. I thought the 94% deal you were reporting was with the insurance companies. To my knowledge AHIP were the folks left out of the wheeling and dealing. Which is why the deals are being pushed on the Senate floor. An AHIP deal would have been as solid as the PhRMA deal on the floor. Nelson and Lieberman are not trying to break a deal, they are trying to get those things that AHIP wanted but could not get through negotiation with the White House.
Most unemployed people would go on Medicaid anyway, since (with the exception of the most generous states) UI benefits rarely put a person above 133% FPL. So Klein’s unemployed reader would go on Medicaid. (Unless Ben Nelson succeeds in letting states opt out of the Medicaid expansion, of course.) Which means that Klein is being even more disingenuous, or perhaps ignorant, in this particular line of argument. Whether or not individuals above 133% FPL are mandated to buy insurance in the private system or not has no bearing on Medicaid eligible people.
When I was making 32k a yr, I did not have 2 cents to rub together after paying my rent and making a car payment in New Jersey! Looking back, I would have not been able to pay the $3200 or even the penalty.
The goverment is crafty, they do not give the person who is living in a state where cost of living is double that of another state.
There is no way someone in NJ or NY has one cent left to his or her name at the end of the week on a 32k a tr salary!
Useful observations, but my examples were collateral to my main point. I was hoping to illustrate that what matters when discussing “mandates” is what citizens are being forced to do under color of law, with the state imposing sanctions for non-compliance.
Talk of spreading risk and the size of “risk pools” and so on, is useful, but secondary. The threshold issue here is the quality of the insurance products citizens are being obligated to buy. Much of the discussion simply assumes their value. After all, they are the same products that people (who can) buy today. That’s a lawyer’s trick, to assume away facts – the quality of insurance products – which are very much in doubt or unhelpful to your side.
You also raise a valid point: can the government legally obligate its citizens to buy insurance directly from private companies?
Ezra has been a voice for the insurance industry for quite a while. If you read his stuff he is consistently on Obama’s side on this no matter how bad it gets. I look at him the same way I look at Lanny Davis, I know he has a hidden agenda and the liberal mask is just that a mask.