I begin to see now why the Catallarchs sometimes got so frustrated with some of my initial comments way back when I first started posting there. See, I’ve been having this discussion with some of John Edwards’ supporters about health care and the free market. I initially just tried to offer a suggestion that, I think, was fully in line with the spirit of Edwards’ proposal, but that worked rather more in conjunction with the market. Mostly my proposal is that the idea to create Health Markets^TM is silly since we already have a health market. Some however, have chosen to dispute that fact. Here’s an example:

In a Health Market, the premiums are collected by the health market, not by the individual insurance company.
* Is that the case in every state today?

In a Health Market, nobody can be turned away for a pre-existing condition, being too old, or having something in their health history that indicates they are a higher risk to insure.
* Is that the case in every state today?

In a Health Market, insurance companies must meet a benchmark standard in coverage to participate.
* Is that the case in every state today?

In a Health Market, private insurers must compete against a public plan set up on the same lines as Medicare.
* Is that the case in every state today?

In a Health Market, the Health Market consolidates billing to reduce the costs imposed on health service providers by a blizzard of claims forms
* Is that the case in every state today?

In a Health Market, the information about the relationship between treatments and quality of care is public information available to support research into providing more effective health care, and not private information available to better determine who should be denied coverage.
* Is that the case in every state today?

In order for the claim to be accurate that “Health Markets Already Exist”, each and every one of those features must be present in each and every state in the union.

However, I rather think that no state in the Union has a full-flegged Health Market, and most people in the country have nothing at all like it available.

Interesting. No, it’s more than interesting. It’s fantastic. Watch what we can do now!

• In a Car Market, the premiums are collected by the car market, not by the individual car dealership.

* Is that the case in every state today?

• In a Car Market, nobody can be turned away even if they are a serious risk to take the car without actually paying enough to cover the cost of that car.

* Is that the case in every state today?

• In a Car Market, car dealerships must meet a benchmark standard in order to participate.

* Is that the case in every state today?

• In a Car Market, private car dealerships must compete against a public car dealership, one that’s just like Carmax, only run by the DMV.

* Is that the case in every state today?

• In a Car Market, the Car Market consolidates billing to reduce the costs imposed on car providers by a blizzard of different ordering forms.

* Is that the case in every state today?

• In a Car Market, the information about the relationship between cars and quality of driving is public information available to support research into providing better cars, and not private information available to better determine to whom a car dealership should actually sell a car.

* Is that the case in every state today?

In order for the claim to be accurate that “Car Markets Already Exist,” each and every one of those features must be present in each and every state in the union.

However, I rather think that no state in the Union has a full-flegged Car Market, and most people in the country have nothing at all like it available.

And you know, that’s really just too bad, ’cause I was thinking of getting a car. Whatever will I do with no car markets available? Maybe I’ll just head up to Canada. I hear that they have universal car coverage up there. They’re all 1993 Chevy Cavaliers, require a 6 month wait, and require a 46% deduction from every paycheck. But, hey, they’re free!

UPDATE: Corrected the embarrassingly bad grammar mistake in the last paragraph.

In my previous post I looked at Senator Edwards’ health care plan and argued that it could be simplified by getting rid of the regional Health Markets (which, I argued, already exist) and instead simply allowing anyone who wants to sign up for Medicare (on some sort of sliding fee scale).

A number of people objected to that proposal, claiming that ultimately it would serve to undermine Medicare. I think that assessment is deeply mistaken.

Look, let’s say that there are X uninsured people out there and that those uninsured people will use, on average, $Y in health care. That means that, when health insurance is mandated, the health insurance market, taken as a whole, now has to pick up $XY in additional costs.

Now that money has to come from somewhere. Clearly the sick people themselves aren’t going to be paying it; if they could do that, they wouldn’t have needed insurance in the first place. So the funds have to come from somewhere. I see four possibilities.

1. Insurance companies raise premiums on everyone. In this scenario, the extra money comes out of the pockets of healthy people, regardless of their income levels.

2. Insurance companies pass the increased costs along to the employers who are required to provide insurance coverage. Of course, Ford and GM and Wal-Mart aren’t going to just eat the costs of those increased premiums. They’re going to pass those costs along to the consumers in the form of higher prices for various goods. Increased prices for ordinary goods will hit the poorest the hardest.

3. The government picks up the tab in the form of tax breaks for insurance companies and/or employers. Corporate welfare at its finest here. Plus this will mean increasing taxes. To the extent that our tax system is progressive, that at least means that those who can most afford it subsidize health care, an advantage over (1) and (2).

4. We enroll all the additional sick people in Medicare. Again, this means increasing taxes, so the ultimate effect of (4) is identical to (3). Except that, by adding all the sick people to Medicare, we make Medicare really huge. And that’s a good thing, in the end, since huge companies have lots more leverage to negotiate better prices.

In short, it’s not clear how, economically, a plan that makes private companies pick up (and ultimately pass along to consumers) the additional cost of insuring the sick is an improvement over a plan that simply enrolls them all in Medicare. They won’t magically cost less to insure in private plans, and the costs of such a plan are passed along in non-progressive ways.

(crossposted at John Edwards’ blog)

From a comment at John Edwards’ blog to my post on the Senator’s health care plan:

A “market” where the “sellers” work hard to turn customers away and equally hard at taking customers money but not handing over the goods purchased … that is a broken market.

My reply:

I guess that maybe I should have been clearer. Health Markets are unnecessary given (2) above. Once we open up Medicare to everyone who wants to get on board, then we no longer have to worry about creating a new Health Market.

Now if it turns out that Medicare is really, really good at providing services at a competitive rate, then it will attract more customers. Eventually, if it’s really good, we’ll end up with what amounts to single-payer health care. If, on the other hand, Medicare does a really crummy job, well, then it’s probably a good thing that it’s not single-payer.

Of course, there’s always that other sort of option for Health Markets. That would be the sort of market where people (let’s call them doctors) offer services to clients who need those services (let’s call them sick people). Sick people then pay for the services that they use. Non-sick people don’t pay for any services at all. And those too poor to pay for the services themselves can get block sums of money to pay for their medical services.

“Ah,” you say, “but the cost of health care is too high for anyone to afford without insurance.”

“Ah,” say I, “then you don’t understand how markets work.”

Providers of services charge what the market will bear. Get rid of insurance and the market will bear far, far less. Medical costs will race to the bottom as doctors cut rates to attract patients. The thing preventing the existence of a functioning health market is not insurance companies. They’re not in the health market, anyway; they’re in the insurance market. Their job is to turn a profit selling insurance. Doctors have the job of selling health care.

No, the reason we don’t have actual health markets is that we’ve made a distinction between the people who use health care and the people who pay for health care. Get rid of that link and you’ve got yourself a functioning health market.

My god, I sound more like a libertarian everyday. Either that or I’m just angling for Jonathan to make my guest writer stints at Catallarchy permanent.

A post made over at John Edwards’ blog. It’s the first time I’ve ever actually put something up on a community blog site. We’ll see if I can manage to make it past the guardians at the gate. Anyway, here’s the post, just in case it never sees the light of day elsewhere.

I just finished reading Paul Krugman’s very nice review of Edwards’ health care plan. I figured that I’d go ahead and read the plan, too, while I was at it. I like to be thorough, you see.

Now don’t get me wrong. I like the plan. I think that it’s the best thing currently on offer. And I like the notion of letting government plans compete with private insurers. I’ve libertarian leanings, so this sort of thing warms my marketist little heart. I must say, though, that parts of it leave me somewhat puzzled.

It seems to me that the plan is needlessly complicated. It sets up whole new levels of bureaucracy that, I would think, are not actually necessary. So, bearing in mind that I’m hardly an expert on health care, economics or public policy, here’s my simplified version.

1. Ditch the Health Markets. After all, health markets already exist. Even as we speak, I can go to Blue Cross or Aetna or a whole host of other insurance companies. I can choose from among different sorts of coverages and different sorts of prices. There’s already a market here. We don’t need to create one.

2. Open Medicare to everyone. Part of the reason that I can afford to be so glib about the market for health care is that I’m relatively young and in quite good health. Plenty of people are happy to give me insurance. Or would be, anyway, if I were willing to pay them for it. Lots of people aren’t so lucky. So, rather than creating Health Markets, which will require whole new levels of managers and the like, raising administrative costs for everyone, simply allow anyone who wants to opt into Medicare. Set a yearly premium and then open it to everyone.

3. Break the employer/health care link entirely. The Edwards’ plan recognizes that relying solely on employers to provide health care for Americans isn’t working. But the plan moves in the wrong direction. Rather than requiring employers to provide health insurance, the plan should require that employers either pay for health insurance or offer equivalent cash payments to employees. Then require individuals to carry insurance.

Obviously this is all oversimplified at this point. Still, simply allowing anyone at all to opt into Medicare eliminates the cumbersome extra step of creating Health Markets while retaining all of the benefits.

Plus it’s much simpler to explain. “Allow all Americans to buy into Medicare” makes for a nice bullet point on a direct mail piece. Explaining what a Health Market is and why it’s a good thing — that’s going to take up way more copy.

You can see it here. Maybe.

UPDATE: Looks like my post is going to get dinged. I had two votes to put it up last night. Now I’m sitting proud with a -1. My opinion of Edwards remains unchanged. My opinion of Edwards’ supporters is taking a bit of a hit.

UPDATE 2: I seem to have made the cut. You can see me (for now) on the front page of John Edwards’ blog. My faith is restored.

I suppose that I sort of gave the game away back in the previous post, but I thought that I’d go ahead and sort of say it formally here. For what it’s worth, John Edwards is my guy for ’08.

Yes, I know that my libertarian friends are taking great delight in making fun of Edwards for the phrase “Health Markets.” (Note to Mr. Edwards: hire me and I could catch those sorts of things for you.) But really, you know, Edwards’ plan isn’t actually that terrible from a libertarian perspective. No, it’s not 1st party payer, which libertarians would presumably prefer, but, it does begin the (I think) necessary task of disentangling health insurance from employers. And let’s face it; if Wal-Mart has joined with a labor union (of all things) to start pushing for universal health care, then we’re probably going to end up with some form of it. The advantage of Edwards’ plan, as opposed to those we might get from many on the left, is that it’s not automatically a single-payer plan. People can opt in to the government plan as one of a number of options. They could also, one presumes, opt out into something else if that’s a better deal. Edwards’ plan at least lets the market decide; if the market moves everyone toward single-payer, well, then, the market will have spoken. Right?

On defense, I think that Edwards is saying some good things. He’s pretty solidly opposed to expanding war into Iran, which, at the very least, shows that he can do basic math. We’re more or less out of boots to put on the ground in the two Middle Eastern nations we’re already occupying. Finding troops for their way bigger neighbor seems rather hard to do short of a draft. And let’s not even go there.

Is Edwards a bit more of a populist than I might like? Yes, somewhat. But it’s not clear who in the mix of current candidates is going to be any better on that score. Obama? Who really knows. Most of his proposals are way too vague to be able to tell. Clinton? I actually like her in general, but I think that (a) she’s a bit too hawkish right now and hawkishness doesn’t really seem to be what’s called for at the moment, and (b) she’s totally and completely unelectable now and forever, Amen. And Republicans? You’re kidding me, right? They’re all way, way too busy trying to figure out who will best instantiate God’s Own Theocracy.

That paragraph is unfair, though, now that I look back on it. It’s not like I’ve decided that Edwards is merely the least bad option. I supported him in ’04. I thought then that the ticket should have been Edwards/Kerry rather than the reverse. And I like him still. I like much of his platform. And most importantly, I think that he can win a general election. Kerry did surprisingly well in NC last go ’round, and that was with Edwards on the bottom of the ticket. Edwards won a statewide race in NC already, and while I doubt that he could win SC, I think that he’d be competitive enough that he’d force Republicans to spend money there.

Anyway, that’s my two cents. I guess now that my hat is publicly in the ring, I’m committed. Until I change my mind, which I always reserve the right to do. Really, though, it’s not like any campaign is likely to start ringing me up offering me a job. This despite the fact that I’d be damn good on someone’s staff. I can write a mean campaign ad. I managed to squeeze three fallacies into a single line. And there wasn’t even a verb. So if someone out there is looking for a writer with a 14-person blog following who still considers himself a Clintonite neo-liberal with libertarian leanings who is very much interested in taking the theoretical case for a libertarian/Democrat alliance out there to the public, well then here I am. Anyone. Say someone who is already headquartered in the Carolinas.

Is that too much? Yeah, I thought so too. Oh well.

Just finished reading Brandon Berg’s quick hit on leftists and their inconsistencies on IQ. I’m not so terribly sure that Brandon’s point is particularly fair, but I’m willing to look the other way on that one. After all, I do know plenty of people on the left who made much of President Bush’s IQ but who would be horrified at the thought of, say, writing off some of their students as just being not all that bright. That’s pretty anecdotal, but hey, it’s a blog hit.

More interesting, though, is the extent to which both sides in the IQ debate interpret the results in accord with their ideology. Now I’m not usually one to make a post-modernist sort of point, but it does strike me as pretty glaringly obvious in this case that people’s preconceived notions very heavily influence their interpretation of supposedly “objective” facts.

Here’s the skinny. IQ correlates strongly with poverty, with social mobility, and with race. These just are facts. Like them or not, they just are true. But that’s as far as the facts really take us. They get us a correlation. A strong one. What, then, are we to do with that correlation?

Well, good scientists tend to look at correlations, especially strong ones, and make some preliminary sorts of assumptions. When A and B correlate strongly, it’s a good bet that there is some sort of causal relationship, some sort of reason for the correlation. It could be pure chance, but that seems less likely. So the starting assumption is that there is some sort of reason why A and B correlate strongly. Of course, there are actually three options for a causal link. A could cause B. B could cause A. Or A and B could both be effects of another cause C.

So how does ideology enter the picture when we discuss IQ? Well, leftists are, generally speaking, committed to egalitarianism. That is, leftists believe that people are, at bottom, all created more or less equal and that differences between people are typically a product of socialization. A leftist, confronted with the bald fact that poor people and dumb people are frequently the same people, will naturally assume that being poor leads to being dumb (or, more politely, that standard intelligence tests exhibit some bias toward middle and upper-class test takers). A leftist will, in other words, assume that B causes A.

Those of a more libertarian (or more generally marketist) bent see the world differently. Libertarians are fundamentally committed to the inherent goodness of free markets. So, confronted with the bald fact that people who fare badly in the market end up having lower IQs, libertarians naturally take this fact as confirmation of their views: poor people have only themselves to blame for being poor. For a libertarian, it’s obvious that A causes B.

This division results in, well, it results in the debates that take place all around the blogosphere. Leftists accuse libertarians of distorting data. Libertarians accuse leftists of ignoring evidence. In reality, both criticisms are correct. And both are wrong. The data itself doesn’t show anything. It shows only correlation. We have no evidence that A causes B. We also have no evidence that B causes A. And as far as you’d know from the blogosphere, there’s no one even considering the possibility that C causes both A and B.

What’s needed right now is more study on the issue. And less “I told you I was right all along” smirking. As well as less I-can’t-hear-you-fingers-in-the-ear denialism.