An article of concern

[Eric01]

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According to the ACA, if you don't have coverage, you pay more money in taxes to the government than if you do have coverage. The exact same thing is (and has long been) true about mortgages. If you don't have a mortgage, you pay more money to the government in taxes than if you do have one. In your mind, what is the legal difference between these two situations? Or do you also thing mortgage deductions are also unconstitutional?

I don't know if that's factually true, but in any case one is a lack of a deduction rather than forcing you to purchase into a program (as an additional fee mandate). Said another way, your penalty for not having a mortgage is simply a lack of a benefit (lack of a positive) whereas your penalty for not having health insurance is a fee (introduction of a negative). It's sort of like, if you're in business and if you engage in a certain activity you'll get a bonus, well that's great, but if you don't do that you'll just stay where you were at initially. But with the ACA, if you don't do something, you're liable to a pay reduction. The two situations are fundamentally different in a person's decision making.

And there is a difference between the additional tax argument. If you do purchase a mortgage, you will ultimately be spending more money in taxes even with the benefit. You'll then be subjected to property tax which probably would completely offset the federal tax deduction. If not, you're still then paying a larger sum of money for the mortgage and taking on additional risk than you originally were before you took on the mortgage. (presumably you were renting property).
So even though in the natural state without a mortgage you are paying more taxes ceteris paribus than you were with a mortgage, the ceteris paribus argument does not apply in this situation because all other things most certainly are not equal, which is presumably the reason why federal tax deductions exist in the first place to create the incentive for mortgages.

 

[phltz]

I don't know if that's factually true, but in any case one is a lack of a deduction rather than forcing you to purchase into a program (as an additional fee mandate). Said another way, your penalty for not having a mortgage is simply a lack of a benefit (lack of a positive) whereas your penalty for not having health insurance is a fee (introduction of a negative). It's sort of like, if you're in business and if you engage in a certain activity you'll get a bonus, well that's great, but if you don't do that you'll just stay where you were at initially. But with the ACA, if you don't do something, you're liable to a pay reduction. The two situations are fundamentally different in a person's decision making.

And there is a difference between the additional tax argument. If you do purchase a mortgage, you will ultimately be spending more money in taxes even with the benefit. You'll then be subjected to property tax which probably would completely offset the federal tax deduction. If not, you're still then paying a larger sum of money for the mortgage and taking on additional risk than you originally were before you took on the mortgage. (presumably you were renting property).
So even though in the natural state without a mortgage you are paying more taxes ceteris paribus than you were with a mortgage, the ceteris paribus argument does not apply in this situation because all other things most certainly are not equal, which is presumably the reason why federal tax deductions exist in the first place to create the incentive for mortgages.

That's all candy-coating the facts of the matter, which are that "no mortgage" = "pay more money to the government" is the same damned situation as "no insurance" = "pay more money to the government". Even accepting, for the moment, your vague attempts to explain this away, your whole argument is fatally flawed because you are assuming that the only way to buy a house is via a mortgage. In practical terms that's usually how people do it (in no small part because the government penalizes you if you don't), yes. But it's perfectly legally possible to buy a house with 100% cash on the table. People who do that get penalized by the government as compared to people who take out a mortgage, because the government mandates that you have a mortgage.

The reason the mortgage deduction exists is because it's a popular way for government to shovel money at the kind of stable, upper-middle and upper class people who are most likely to vote (thus giving politicians the most bang for their buck), and because it helps prop up the long building and not nearly fully deflated bubble in house prices, not because there's any principled, sensible argument for it.

 

[Eric01]

That's all candy-coating the facts of the matter, which are that "no mortgage" = "pay more money to the government" is the same damned situation as "no insurance" = "pay more money to the government". Even accepting, for the moment, your vague attempts to explain this away, your whole argument is fatally flawed because you are assuming that the only way to buy a house is via a mortgage. In practical terms that's usually how people do it (in no small part because the government penalizes you if you don't), yes. But it's perfectly legally possible to buy a house with 100% cash on the table. People who do that get penalized by the government as compared to people who take out a mortgage, because the government mandates that you have a mortgage.

The reason the mortgage deduction exists is because it's a popular way for government to shovel money at the kind of stable, upper-middle and upper class people who are most likely to vote (thus giving politicians the most bang for their buck), and because it helps prop up the long building and not nearly fully deflated bubble in house prices, not because there's any principled, sensible argument for it.

Ya but certeris paribus still doesn't apply, even if you pay 100% in cash, you're left with additional property taxes at the very least. Said another way, why doesn't everyone take out mortgages then if the only relevant variables were "pay more taxes to government" if they don't have them. The other variables do exist and is the reason why people don't universally do this.

 

[SFO-IST]

Lets get Joe the plumber to take care of our medical care needs from now on:

 

[phltz]

Ya but certeris paribus still doesn't apply, even if you pay 100% in cash, you're left with additional property taxes at the very least. Said another way, why doesn't everyone take out mortgages then if the only relevant variables were "pay more taxes to government" if they don't have them. The other variables do exist and is the reason why people don't universally do this.

People are induced to take out a lot of mortgages that they otherwise wouldn't by this policy, although it's certainly far from "everyone" who does so. Your argument is still invalid: if you already own your house free and clear, and then take out a mortgage against it, you will see a reduction in your tax bill. I'm not sure why you're so dead set on trying to deny the plain truth, which is that the government mandates home mortgages in a way that is extremely similar to how it now mandates health coverage. While either one or the other should be assessed as good or bad policy on its own merits, it's hard to imagine how one could be constitutional but the other not.

 

[gettheleadout]

If we had Friedman's way, the standard of living for physicians would plummet. He wanted to abolish medical licensing and believed the AMA was the biggest and most powerful union in the nation (and chances are that he had lots of disdain for unions).

wat. Physicians can't unionize...

 

[NickNaylor]

According to the ACA, if you don't have coverage, you pay more money in taxes to the government than if you do have coverage. The exact same thing is (and has long been) true about mortgages. If you don't have a mortgage, you pay more money to the government in taxes than if you do have one. In your mind, what is the legal difference between these two situations? Or do you also thing mortgage deductions are also unconstitutional?

Are you sure the mandate is in the form of providing an incentive via a tax break? I don't doubt that there's a tax break for purchasing health insurance, but the only information that I can find is about a nebulous "penalty" for not carrying insurance that's explicitly included in the ACA. I'm not against a tax break as an incentive to purchase health insurance. I AM against the federal government effectively criminalizing not carrying health insurance and punishing that choice by imposing a fine/"penalty."

Here's an example of the only info I'm finding: http://www.kaiserhealthnews.org/Stories/2010/March/22/consumers-guide-health-reform.aspx

Again, not saying you're wrong, but the sources that I've seen don't mention a tax break and only mention a "penalty." Maybe they're just using poor diction and the two are one in the same.

 

[Cornu Ammonis]

I don't think most people argue for a free market in the sense that there should be no regulation. Minimum coverage standards, for example, could be easily implemented by mandating that all private companies offer the same basic plan at roughly the same price. If people want to pay more for plans with greater amounts of coverage, then they should be free to do so.

Obviously this is a gross oversimplification that doesn't address a lot of key issues, but I fail to buy into the argument that something intrinsic characteristic of private companies makes them unsuitable to provide affordable and readily available coverage. Government can easily implement regulations that allow for universal and, at a basic level, equitable coverage while keeping intact the benefits of "free" markets (competition, incentive to innovate, choice, etc.).

In this case, there are in fact natural characteristics of the free market that do make insurance unsuitable for providing cheap, good coverage. Insurance is one of the few businesses in which market forces actually result in higher and not lower costs - the more companies competing, the smaller the pools in each company, the higher the cost to insure each individual. Since insurance companies do not produce the actual desired service for the customer (actual treatment) the only way for companies to compete in such a marketplace is to provide deceptively poor coverage and drop as many costly patients as possible. Profit motives direct insurance companies to not only drop customers who legitimately fall outside their coverage, but to drop many customers they find to be incapable of suing for their rightful coverage. The current market perfectly reflects this thought experiment. One might believe that customers would avoid such companies just as critics of the FDA believe people would avoid poisoned food, but market forces and consumer impotence make this impossible.

There are, of course, countries like Switzerland in which private companies are heavily regulated to prevent these behaviors, and it does provide some savings, but not nearly as much as single-payer systems. Honestly, I believe single-payer is less intrusive and more 'American' in character than telling businesses that they must by law profit as little as possible from their work; it just seems natural for the nation to provide itself necessary health care rather than forcing businesses to provide it against their will. Besides, in a single-payer system, private insurance could still exist for upmarket customers who desire care above and beyond what the government will provide without such onerous regulations.

Not to get too far into economics, but there are plenty of situations in which markets just outright fail to serve anyone's interests. Look up examples like Iceland's fisheries. Not every market works based on the basic concepts of supply and demand alone like selling televisions or refrigerators.

 

[phltz]

Are you sure the mandate is in the form of providing an incentive via a tax break? I don't doubt that there's a tax break for purchasing health insurance, but the only information that I can find is about a nebulous "penalty" for not carrying insurance that's explicitly included in the ACA. I'm not against a tax break as an incentive to purchase health insurance. I AM against the federal government effectively criminalizing not carrying health insurance and punishing that choice by imposing a fine/"penalty."

Here's an example of the only info I'm finding: http://www.kaiserhealthnews.org/Stories/2010/March/22/consumers-guide-health-reform.aspx

Again, not saying you're wrong, but the sources that I've seen don't mention a tax break and only mention a "penalty." Maybe they're just using poor diction and the two are one in the same.

There is no difference between giving a tax break to the people who do what you want and charging a penalty to the people who don't. These are exactly the same thing.

 

[Cornu Ammonis]

There is no difference between giving a tax break to the people who do what you want and charging a penalty to the people who don't. These are exactly the same thing.

The difference is that people who didn't already have insurance before this law was passed will see higher taxes, whereas people who didn't already have mortgages before it became deductible had the same tax rates before and after that law was passed. This is an especially big difference given that the people affected are mostly in the middle class, though at least the penalty scales with income.

 

[phltz]

The difference is that people who didn't already have insurance before this law was passed will see higher taxes, whereas people who didn't already have mortgages before it became deductible had the same tax rates before and after that law was passed. This is an especially big difference given that the people affected are mostly in the middle class, though at least the penalty scales with income.

So in effect it's a tax raise coupled with a tax deductable for people with health insurance. This may or may not be good policy, but I don't see how you can claim that a tax increase is illegal or unconstitutional.

 

[NickNaylor]

There is no difference between giving a tax break to the people who do what you want and charging a penalty to the people who don't. These are exactly the same thing.

No, they aren't. Would you argue that giving a tax break to home owners and penalizing non-home owners are exactly the same?

The EFFECT is the same, true, but one process is legal and the other isn't (in my opinion). A tax break and a penal penalty aren't the same. In many cases it's the PROCESSES of government that are often invalidated in court rulings, not the intents or effects. Affirmative action in college admissions is one ubiquitous example.

 

[NickNaylor]

In this case, there are in fact natural characteristics of the free market that do make insurance unsuitable for providing cheap, good coverage. Insurance is one of the few businesses in which market forces actually result in higher and not lower costs - the more companies competing, the smaller the pools in each company, the higher the cost to insure each individual. Since insurance companies do not produce the actual desired service for the customer (actual treatment) the only way for companies to compete in such a marketplace is to provide deceptively poor coverage and drop as many costly patients as possible. Profit motives direct insurance companies to not only drop customers who legitimately fall outside their coverage, but to drop many customers they find to be incapable of suing for their rightful coverage. The current market perfectly reflects this thought experiment. One might believe that customers would avoid such companies just as critics of the FDA believe people would avoid poisoned food, but market forces and consumer impotence make this impossible.

There are, of course, countries like Switzerland in which private companies are heavily regulated to prevent these behaviors, and it does provide some savings, but not nearly as much as single-payer systems. Honestly, I believe single-payer is less intrusive and more 'American' in character than telling businesses that they must by law profit as little as possible from their work; it just seems natural for the nation to provide itself necessary health care rather than forcing businesses to provide it against their will. Besides, in a single-payer system, private insurance could still exist for upmarket customers who desire care above and beyond what the government will provide without such onerous regulations.

Not to get too far into economics, but there are plenty of situations in which markets just outright fail to serve anyone's interests. Look up examples like Iceland's fisheries. Not every market works based on the basic concepts of supply and demand alone like selling televisions or refrigerators.

The solution to this problem is exactly what you mentioned: heavy regulation. While your argument and description of a free market is sound, very few people would advocate for a truly free health insurance market absent any regulation. It's certainly not what I'm advocating for.

I just have a fundamental issue with the government being in charge of offering health insurance. I don't think that's the role of government. I think the government's role is to make the playing field fair and minimize the opportunities for malfeasance, not to actually provide that service.

And this is the fundamental divide.

 

[phltz]

No, they aren't. Would you argue that giving a tax break to home owners and penalizing non-home owners are exactly the same?

The EFFECT is the same, true, but one process is legal and the other isn't (in my opinion). A tax break and a penal penalty aren't the same. In many cases it's the PROCESSES of government that are often invalidated in court rulings, not the intents or effects. Affirmative action in college admissions is one ubiquitous example.

Yes, I would argue that those two things are exactly the same, legally speaking. The only difference is the spin that's put on it. Look, have you ever actually filed your taxes? The words "tax break" or "tax penalty" aren't on any of those forms. There's a spreadsheet that you put a bunch of information into, then total up some numbers, subtract them from some other number, look it up in a table, and figure out how much you owe. Describing certain elements of the tax code as a "break" or "penalty" may help to illustrate what's going on, but it has no well defined legal meaning.

I'm not sure exactly how they implemented the penalties for the ACA, but I'd have done it something like this. On your 1040, there'd be part that says "If you have health coverage that meets such and such criteria, enter a 0 on line 113, otherwise enter $XXX". This then would be added in to your total tax bill. This isn't a "penalty" or a "break". It's just how you calculate what you owe on your taxes.

 

[NickNaylor]

Yes, I would argue that those two things are exactly the same, legally speaking. The only difference is the spin that's put on it. Look, have you ever actually filed your taxes? The words "tax break" or "tax penalty" aren't on any of those forms. There's a spreadsheet that you put a bunch of information into, then total up some numbers, subtract them from some other number, look it up in a table, and figure out how much you owe. Describing certain elements of the tax code as a "break" or "penalty" may help to illustrate what's going on, but it has no well defined legal meaning.

I'm not sure exactly how they implemented the penalties for the ACA, but I'd have done it something like this. On your 1040, there'd be part that says "If you have health coverage that meets such and such criteria, enter a 0 on line 113, otherwise enter $XXX". This then would be added in to your total tax bill. This isn't a "penalty" or a "break". It's just how you calculate what you owe on your taxes.

That's what I was asking about: is the penalty assessed via the tax code? Or is this something HHS or some other entity is collecting from non-compliant people? I don't know, and obviously that'd make a huge difference.

 

[phltz]

That's what I was asking about: is the penalty assessed via the tax code? Or is this something HHS or some other entity is collecting from non-compliant people? I don't know, and obviously that'd make a huge difference.

Yes, the penalty is assessed by the IRS when you file your taxes. Judge Sutton, who upheld the constitutionality of the mandate, specifically pointed out that assessing a penalty to the uninsured is exactly the same as providing a subsidy to those who do purchase health insurance. Before you write him off as some wild-eyed liberal, note that he clerked for Scalia, was appointed by George W. Bush, and is widely considered a conservative intellectual heavyweight.

The federal government subsidizes mortgages, trading in used "clunkers" for new cars, donating money to a church or university, student loans, and myriad other things. This is to say, the government is penalizing those who do not do these things. You don't have to comply with the cash-for-clunkers-mandate, but if you don't, you're out $4,500. You don't have to comply with the ACA mandate, but if you don't, you're out $650. I don't see how you can seriously argue that the ACA is unconstitutional but all those other things are fine.

 

[NickNaylor]

Yes, the penalty is assessed by the IRS when you file your taxes. Judge Sutton, who upheld the constitutionality of the mandate, specifically pointed out that assessing a penalty to the uninsured is exactly the same as providing a subsidy to those who do purchase health insurance. Before you write him off as some wild-eyed liberal, note that he clerked for Scalia, was appointed by George W. Bush, and is widely considered a conservative intellectual heavyweight.

The federal government subsidizes mortgages, trading in used "clunkers" for new cars, donating money to a church or university, student loans, and myriad other things. This is to say, the government is penalizing those who do not do these things. You don't have to comply with the cash-for-clunkers-mandate, but if you don't, you're out $4,500. You don't have to comply with the ACA mandate, but if you don't, you're out $650. I don't see how you can seriously argue that the ACA is unconstitutional but all those other things are fine.

Not sure what the bolded has to do with anything over than polemicizing the argument.

I was just unsure of how this penalty was put into place, i.e., through a tax benefit or through a civil/criminal penalty (I thought it was the latter). You've cleared that up, so thank you. I have no problem with the mandate given that it's executed in the form of a tax break, but that wasn't my initial understanding.

I agree that it would be hypocritical to be against the mandate while supporting other tax breaks.

 

[Slack3r]

Since insurance companies do not produce the actual desired service for the customer (actual treatment) the only way for companies to compete in such a marketplace is to provide deceptively poor coverage and drop as many costly patients as possible. Profit motives direct insurance companies to not only drop customers who legitimately fall outside their coverage, but to drop many customers they find to be incapable of suing for their rightful coverage.

What makes you think the government would be immune to similar cost-saving measures? Maybe they'd go about it in different ways, but the general tenet is the same: minimizing cost.

 

[NickNaylor]

What makes you think the government would be immune to similar cost-saving measures? Maybe they'd go about it in different ways, but the general tenet is the same: minimizing cost.

BUT THE GOVMENT WOULDN'T DO THAT.

There really is no intrinsic difference between private companies and the government. They're both looking to cut costs, and eventually SOMETHING will give way. Just look at the NHS a few years ago. The government might be able to cut costs initially, but they WILL rise, and eventually there will be political pressure to reduce them.

 

[Slack3r]

BUT THE GOVMENT WOULDN'T DO THAT.

There really is no intrinsic difference between private companies and the government. They're both looking to cut costs, and eventually SOMETHING will give way. Just look at the NHS a few years ago. The government might be able to cut costs initially, but they WILL rise, and eventually there will be political pressure to reduce them.

Yup. Kinda the same way *******es think for-profit vs. NPO actually matters for anything. (Hint: it doesn't)

 

[Cornu Ammonis]

What makes you think the government would be immune to similar cost-saving measures? Maybe they'd go about it in different ways, but the general tenet is the same: minimizing cost.

The only difference is that one is democratic and the other is not. Whatever costs are cut in a single-payer system, they are cut on behalf of the people who will suffer the consequences. I am not under the impression that the government can solve all our problems, but I would much rather be subject to the will of our democratic republic, as ill-informed and poorly-intentioned as it may be, than the tyranny of private interests whose motives are necessarily at odds with mine.

 

[NickNaylor]

The only difference is that one is democratic and the other is not. Whatever costs are cut in a single-payer system, they are cut on behalf of the people who will suffer the consequences. I am not under the impression that the government can solve all our problems, but I would much rather be subject to the will of our democratic republic, as ill-informed and poorly-intentioned as it may be, than the tyranny of private interests whose motives are necessarily at odds with mine.

Your idealized notion of how democracy works has very little basis in the real world, at least in America.

 

[Cornu Ammonis]

Your idealized notion of how democracy works has very little basis in the real world, at least in America.

My thoughts on democracy are as cynical as they come. Let me ask you this: if our government is incapable of providing something as basic and essential as health insurance better than companies whose job it is to provide as little compensation as possible, what makes you think it is willing and able to provide and enforce strict regulations on insurance companies? What even is the point to clinging to the last vestiges of democracy? The answer is, sadly, found in the fact that insurance was specifically exempted from the Sherman and Clayton antitrust acts by the McCarran-Ferguson Act of 1944, allowing them to collude and fix prices.

Believe me, I have no illusions about the honesty of our government or the ability of our people to effect their will democratically, but as Winston Churchill once said, "Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time."

 

[NickNaylor]

My thoughts on democracy are as cynical as they come. Let me ask you this: if our government is incapable of providing something as basic and essential as health insurance better than companies whose job it is to provide as little compensation as possible, what makes you think it is willing and able to provide and enforce strict regulations on insurance companies? What even is the point to clinging to the last vestiges of democracy? The answer is, sadly, found in the fact that insurance was specifically exempted from the Sherman and Clayton antitrust acts by the McCarran-Ferguson Act of 1944, allowing them to collude and fix prices.

Believe me, I have no illusions about the honesty of our government or the ability of our people to effect their will democratically, but as Winston Churchill once said, "Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time."

That really doesn't even make sense. If you're dubious about the government's ability to even pass insurance regulation, why would you want it controlling AN ENTIRE HEALTH INSURANCE SYSTEM? Hint: a health insurance system would be infinitely more complex than regulatory agencies. No is arguing that the government has done a great job establishing regulations thus far - in fact, it's done a terrible job. I'm not sure how that gives you any confidence that it can effectively run a nationwide system that would be more complex than the VA, Medicare, and Medicaid. It would be orders of magnitude easier to simply reform insurance regulations than it would be to establish an entire national system, ESPECIALLY in this political climate.

Remember that whole shebang about the debt ceiling? What makes you think that exact situation wouldn't happen with health insurance funding every few years, if not every year? That seems like a great idea - put people's health insurance coverage at the whims of political bull****! That's so much better than the profit-motive of insurance companies that at least WANT to provide you insurance so that they can make money off of you.

 

[Cornu Ammonis]

That really doesn't even make sense. If you're dubious about the government's ability to even pass insurance regulation, why would you want it controlling AN ENTIRE HEALTH INSURANCE SYSTEM? Hint: a health insurance system would be infinitely more complex than regulatory agencies. No is arguing that the government has done a great job establishing regulations thus far - in fact, it's done a terrible job. I'm not sure how that gives you any confidence that it can effectively run a nationwide system that would be more complex than the VA, Medicare, and Medicaid. It would be orders of magnitude easier to simply reform insurance regulations than it would be to establish an entire national system, ESPECIALLY in this political climate.

Remember that whole shebang about the debt ceiling? What makes you think that exact situation wouldn't happen with health insurance funding every few years, if not every year? That seems like a great idea - put people's health insurance coverage at the whims of political bull****! That's so much better than the profit-motive of insurance companies that at least WANT to provide you insurance so that they can make money off of you.

"Our government does stupid and irrational things at the behest of lobbyists. Therefore, we can't take up insurance ourselves, or the insurance lobbyists will mess it up!" Do you see the problem here? You are telling me that it is harder for our government to provide insurance itself than to regulate the existing market, and that I am a wide-eyed idealist. You are right that our government is a mess, prone to bouts of ridiculous behavior. However, it is because of the very existence of things like insurance companies and investment banks that our government acts so irrationally. Their work involves ripping off their customers for as much money as they can wring out of them, and their lobbying and media power flows from the money we give them. Any 'realistic' system of insurance regulation will eventually succumb to their greed. Keeping them around in any but the most minimal fashion possible ensures this outcome.

Look, at base the problem is this: government insurance will be as good or as bad as Americans are willing to make it, whereas insurance companies will always be as bad as they can possibly get away with being. If Americans are really so stupid and ill equipped to govern ourselves even in the absence of corporate interests, then we deserve to suffer for it. In the mean time, I'll hold on to the idea that we deserve better.

 

[Cornu Ammonis]

I should also note that even with their current, abhorrent practices, health insurance companies actually have very small profit margins, on the order of 4%. Some populations, like the elderly, are so costly to insure that no one could ever afford the insurance premiums were they not covered by Medicare. Are you saying we should force insurance companies to cover everyone, even though they could not afford to do so? Should we let them pick and choose as they do now, leaving risky and unhealthy people twisting in the wind? Should we extend Medicare and Medicaid as stopgap measures, leaving insurance companies with only the profitable patients and the government footing the rest of the bill? I'll just say that the latter leaves these programs open as easy targets for politicians as the costs balloon and the rich will fight the increased taxation that is the only way to cover them.

These contrivances all seem ridiculous to me.

 

[Cornu Ammonis]

One final thought! The way insurance payment works now is economically inefficient, even ignoring the rest of the picture, for one simple reason: insurance costs are innate to hiring workers or to people who sign up themselves, to the same economic effect, rather than coming out of profits, as would happen in single payer system (or some strange scheme in which the government pays insurance companies). As long as this is true, it is a disincentive to hire employees or spend money, just like the payroll tax.

Were insurance to come from the government through income taxes, the cost of employment would drop significantly; even those companies that did not previously insure their employees would benefit from a healthier workforce. The self-insured would also have more money to spend, depending on their income, but since lower income brackets spend a larger percent of their income, this results in a net increase in demand. This is a business-friendly, economically sound idea. The only losers in this scenario would be the rich, but only in the sense that if they profit more as a result, they must pay more in taxes, and since this would increase demand, they could only profit from it! I think most Americans would agree that a strong middle class and consumer-driven economy is what made us great in the mid 20th century. This is why all tax should come out of profit/income and not from sales or employment; it only costs you if you're succeeding, it can never burden you and cause you to fail.

 

[Slack3r]

This is why all tax should come out of profit/income and not from sales or employment; it only costs you if you're succeeding, it can never burden you and cause you to fail.

Umm, I'm no economist, but doesn't one draw their income from employment? 😕

Do you perhaps mean capital gains?

 

[NickNaylor]

"Our government does stupid and irrational things at the behest of lobbyists. Therefore, we can't take up insurance ourselves, or the insurance lobbyists will mess it up!" Do you see the problem here? You are telling me that it is harder for our government to provide insurance itself than to regulate the existing market, and that I am a wide-eyed idealist. You are right that our government is a mess, prone to bouts of ridiculous behavior. However, it is because of the very existence of things like insurance companies and investment banks that our government acts so irrationally. Their work involves ripping off their customers for as much money as they can wring out of them, and their lobbying and media power flows from the money we give them. Any 'realistic' system of insurance regulation will eventually succumb to their greed. Keeping them around in any but the most minimal fashion possible ensures this outcome.

Look, at base the problem is this: government insurance will be as good or as bad as Americans are willing to make it, whereas insurance companies will always be as bad as they can possibly get away with being. If Americans are really so stupid and ill equipped to govern ourselves even in the absence of corporate interests, then we deserve to suffer for it. In the mean time, I'll hold on to the idea that we deserve better.

Again, these things can be fixed with reform. Campaign finance reform is very much needed and is something nearly everyone except, seemingly, politicians agrees with. So where does your argument go in that case once we largely address bribery a.k.a. campaign finance? The problem is that you seem to be assuming the political environment/system as it exists today is unchangeable and you're arriving at solutions with that in mind. That's a false assumption.

With respect to your second post, how do costly patients somehow become less costly if the government takes care of them? Medicare is funded because you pay, for the entirety of your working life (at least 47 years, assuming you start working at 18), taxes on your income. In essence, you're paying for a service that you don't use for 47 years, which is how Medicare can "afford" to treat these high risk patients: because you pay for a service you AREN'T using. Using the 2006 average salary of $50k and assuming you work for 47 years, that essentially averages to a premium of $120/month - $1450 annually - for insurance that provides you with no benefits until you're 65. That doesn't even include the ~$100/month premium for part B coverage for people that choose to enroll.

My point here is that no matter what form of insurance you use, this care has to get paid for somehow, be it in the form of taxes (public insurance) or premiums (private insurance). Medicare is no different. The government isn't doing us any favors by graciously paying for the expensive and poor out of the goodness of its heart. "Lower premiums" for high risk/expensive people covered under Medicare are "affordable" because the majority of the population is paying for their coverage and receiving no benefits in return. By the way, I understand that this is the basic concept of insurance, but with private insurance at least you're receiving coverage and are eligible to receive benefits by paying your premium. With Medicare, you're essentially paying a premium but are entitled to no benefits.

Additionally, Medicaid budgets at the state level generally aren't targeted for budget savings - in other words, there's no "easy target for politicians" there as you suggest. Instead, other aspects of the state budget - usually education - are reduced in order to continue to pay for Medicaid. So, really, other government services are sacrificed in order to continue to provide care via Medicaid. Obviously this isn't true in all cases, but it is in most.

By the way, I'm for a social safety net/Medicaid for those who truly can't afford private insurance.

 

[Cornu Ammonis]

Umm, I'm no economist, but doesn't one draw their income from employment? 😕

Do you perhaps mean capital gains?

When I wrote "employment," I meant employing a person, not 'employment' in the sense of having a job, yourself. As it stands, employers pay payroll tax and insurance costs whether or not they turn a profit. This is much worse for business than if these costs were paid for out of income tax, which is paid by the owners (and employees) only if your business, is actually a success, which is, in turn, more likely if employming people is less costly! For some reason, Republicans saddled us with payroll taxes for as a compromise for social security in the name of 'fairness,' but literally everyone would be better off without it. The same issue faces us with insurance, today.

 

[Cornu Ammonis]

Again, these things can be fixed with reform. Campaign finance reform is very much needed and is something nearly everyone except, seemingly, politicians agrees with. So where does your argument go in that case once we largely address bribery a.k.a. campaign finance? The problem is that you seem to be assuming the political environment/system as it exists today is unchangeable and you're arriving at solutions with that in mind. That's a false assumption.

With respect to your second post, how do costly patients somehow become less costly if the government takes care of them? Medicare is funded because you pay, for the entirety of your working life (at least 47 years, assuming you start working at 18), taxes on your income. In essence, you're paying for a service that you don't use for 47 years, which is how Medicare can "afford" to treat these high risk patients: because you pay for a service you AREN'T using. Using the 2006 average salary of $50k and assuming you work for 47 years, that essentially averages to a premium of $120/month - $1450 annually - for insurance that provides you with no benefits until you're 65. That doesn't even include the ~$100/month premium for part B coverage for people that choose to enroll.

My point here is that no matter what form of insurance you use, this care has to get paid for somehow, be it in the form of taxes (public insurance) or premiums (private insurance). Medicare is no different. The government isn't doing us any favors by graciously paying for the expensive and poor out of the goodness of its heart. "Lower premiums" for high risk/expensive people covered under Medicare are "affordable" because the majority of the population is paying for their coverage and receiving no benefits in return. By the way, I understand that this is the basic concept of insurance, but with private insurance at least you're receiving coverage and are eligible to receive benefits by paying your premium. With Medicare, you're essentially paying a premium but are entitled to no benefits.

Additionally, Medicaid budgets at the state level generally aren't targeted for budget savings - in other words, there's no "easy target for politicians" there as you suggest. Instead, other aspects of the state budget - usually education - are reduced in order to continue to pay for Medicaid. So, really, other government services are sacrificed in order to continue to provide care via Medicaid. Obviously this isn't true in all cases, but it is in most.

By the way, I'm for a social safety net/Medicaid for those who truly can't afford private insurance.

So you're saying that our government is too corrupt to run a single-payer system and always will be so, but is just redeemable enough to regulate industries that will constantly be fighting to roll back anything and everything in their path? You think politicians have not and will not be more tempted to remove campaign finance restrictions to extend their and their parties' terms and personal wealth? You think this is all more likely to happen under voters' scrutiny than cutting essential services - health care or otherwise? I'm afraid history is not on your side.

I understand that someone always has to pay for health care, but it is absolutely my belief that income and capital gains taxes are better ways to pay for it and all other government services than premiums and other regressive payment options. The rich should absolutely have to pay for any service that works towards the public good, because they benefit the most from these services. In this case, as I have outlined, anyone who runs a business would actually benefit from a cheaper workforce and the result would be a more stable, equitable economy. Your objections to the method of payment for medicare only make sense if we keep the current system in place.

While it is admirable that you care enough about the poor that you think they deserve government-provided insurance (an increasingly rare position, sadly), even were we to create a system that insured all the poor and perfectly regulated all insurance companies and we were to ignore the paradoxical idea of telling these companies not to profit even as we defend their existence in the name of free markets, and we found a magic treasury that somehow allowed them to afford their operating costs while still honoring all the policies they give out, it would still be more expensive to cover everyone because the fewer people insured by each company, the more it costs them (and us) per person. Both in theory and in practice around the world, single-payer has proven itself a better system than either the American system or the idealized, highly-regulated private market as in Switzerland.

You keep mentioning insurance companies "at least" having a desire to provide customers with insurance, but what they really want is to sell you a piece of paper that says you are insured but in reality will pay out almost nothing when you need it. As I have mentioned before, were they to actually pay out what they promised (which is still less than many people need), they would go bankrupt within a year. The cost to customers for this inadequate service is often too great to buy, it is rising annually, and it is a terrible drag on the economy. Insurance companies provide nothing to this nation as a whole. At least banks (when they are not breaking or subverting the law) can claim to direct capital to the right places and help optimize the economy; insurance companies - health or otherwise - do nothing but direct money from the hands of consumers to the hands of health care providers while they siphon off a share for stockholders and executives. Nothing is produced, nothing is gained, nothing is earned. I just don't understand the preoccupation with keeping the government out of this one perverted industry. Are there similar opinions about municipal water utilities? Internet service providers? Electric companies? Oh, wait; there are.

 

[gmcguitar4]

I overlooked the previous discussion.

The government is run by insurance companies, banks, energy companies, and pharm companies. It would be nice to change things but as long as people are making millions behind the scenes, it is going to be a long and painful road. I feel heavy tax regulations is the most realistic solution but it will take a long ass time.

Also, I feel like medical schools, law schools, and other grad programs should be cheaper. Supply and demand just raises the prices of them. My gf goes to law school and its like 50 g's a year. What the hell do they need all that money for?? Having over 1100 students payin 50-60 thousand a year in a law school is just extortion. Is the world going crazy or am I?! Greedy businesses are going to sink us all.

 

[Cornu Ammonis]

I overlooked the previous discussion.

The government is run by insurance companies, banks, energy companies, and pharm companies. It would be nice to change things but as long as people are making millions behind the scenes, it is going to be a long and painful road. I feel heavy tax regulations is the most realistic solution but it will take a long ass time.

Also, I feel like medical schools, law schools, and other grad programs should be cheaper. Supply and demand just raises the prices of them. My gf goes to law school and its like 50 g's a year. What the hell do they need all that money for?? Having over 1100 students payin 50-60 thousand a year in a law school is just extortion. Is the world going crazy or am I?! Greedy businesses are going to sink us all.

There is nothing wrong with private universities profiting and stowing away their money in endowments or using it to expand and improve themselves. The problem is that, in an effort to make college available to more people, the government decided to go with a 'free market' solution and provide / encourage easy loans and grants. The problem with this approach is the very market this plan's supporters venerate: the more money available to students, the greater the demand for seats, the higher the price for an education. Prices were already set as low as possible to maximize profits in a competitive market, and increasing demand only drove up prices. What we did see was the rise of for-profit schools whose educational value is dubious and that exist essentially to suck up excess financial aid made available to gullible students. Simply pumping money into the market cannot and did not help anyone. This is why college enrollment has not increased as a percentage of the population since the 1970s, while the cost of a college education has outstripped inflation by something like 4x.

The solution is something like providing more funding for public universities and letting them compete with private schools. Either only the poor students will go to the public schools or public schools will provide a comparable service at such a low price that it will force private schools to drop their tuition, but either way the mission of increasing enrollment and expanding it to the poor is accomplished.

 

[NickNaylor]

There is nothing wrong with private universities profiting and stowing away their money in endowments or using it to expand and improve themselves. The problem is that, in an effort to make college available to more people, the government decided to go with a 'free market' solution and provide / encourage easy loans and grants. The problem with this approach is the very market this plan's supporters venerate: the more money available to students, the greater the demand for seats, the higher the price for an education. Prices were already set as low as possible to maximize profits in a competitive market, and increasing demand only drove up prices. What we did see was the rise of for-profit schools whose educational value is dubious and that exist essentially to suck up excess financial aid made available to gullible students. Simply pumping money into the market cannot and did not help anyone. This is why college enrollment has not increased as a percentage of the population since the 1970s, while the cost of a college education has outstripped inflation by something like 4x.

The solution is something like providing more funding for public universities and letting them compete with private schools. Either only the poor students will go to the public schools or public schools will provide a comparable service at such a low price that it will force private schools to drop their tuition, but either way the mission of increasing enrollment and expanding it to the poor is accomplished.

I have an exam tomorrow and thus will wait to respond to your last post tomorrow (forgive me), but I couldn't pass this up. How is offering loans at rates below those of the free market a free market solution? The government effectively gave banks and other institutions a big "**** you!" and undercut them in a way that they can't possibly compete.

Giving an 18 year old what amounts to a house mortgage is a pretty big risk. If I were a bank manager, I'd be charging pretty hefty interest rates too (as an example, I have excellent credit and the rates I was offered for a private student loan were ~9% that were variable up to 19%). That's not at all to say that these loans aren't awesome - I'm definitely glad I can get super cheap loans just by filling out an application. But government guaranteed loans absolutely aren't a "free market solution."

 

[Cornu Ammonis]

I have an exam tomorrow and thus will wait to respond to your last post tomorrow (forgive me), but I couldn't pass this up. How is offering loans at rates below those of the free market a free market solution? The government effectively gave banks and other institutions a big "**** you!" and undercut them in a way that they can't possibly compete.

Giving an 18 year old what amounts to a house mortgage is a pretty big risk. If I were a bank manager, I'd be charging pretty hefty interest rates too (as an example, I have excellent credit and the rates I was offered for a private student loan were ~9% that were variable up to 19%). That's not at all to say that these loans aren't awesome - I'm definitely glad I can get super cheap loans just by filling out an application. But government guaranteed loans absolutely aren't a "free market solution."

Actually, the way these loans work is that they are guaranteed by the federal government and the banks give out the loans for them, charging interest and a 1% 'origination fee' for taking on literally no risk other than that of the federal government defaulting. This is income that banks would never have received otherwise because these students are too risky to offer loans; it is quite the opposite of a "**** you!" Anyway, I put 'free market' in quotation marks for a reason: it is nothing but market manipulation, but its proponents can't sell it to the public by saying "we're going to give a bunch of public money to banks and raise college tuition in the process."

In any event, good luck on your test!