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Guaranteed Health Care

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Jacob S. Hacker writes,


If one word captures the essence of Health Care for America, it is "guaranteed." Health Care for America would guarantee coverage; it would guarantee a generous package of benefits; it would guarantee greater choice; and it would guarantee real savings and improved quality.

...Health Care for America has just three central elements:

  • the new Health Care for America Plan, which would be open to any legal U.S. resident without good workplace coverage;
  • a requirement that employers (and the self-employed) either purchase coverage comparable to Health Care for America for all their workers or pay a relatively modest payroll contribution (6% of payroll) to fund Health Care for America coverage for all their employees;
  • a requirement that Americans who remain without insurance take responsibility for their and their families' health by purchasing private coverage or buying into the Health Care for America Plan.

The benefits of the Health Care for America Plan would be comprehensive. Besides Medicare benefits, the plan would cover mental health and maternal and child health and include strict limits on total out-of-pocket spending. (Medicare currently lacks such limits, and Health Care for America would authorize a study of how best to incorporate cost-sharing limits into Medicare in the future.)

It is very hard for an honest person to compete against someone who believes that he can "guarantee" universal coverage, less out-of-pocket spending, unlimited access to health care, and lower costs. In Crisis of Abundance, I maintain that there is a trade-off among insulating consumers from costs, giving them free choice of medical services, and holding down costs. There is plenty of evidence to support that point of view. But evidence is irrelevant to Jacob Hacker's guarantees.


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TRACKBACKS (3 to date)
TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/629
The author at Catallarchy in a related article titled Oil of Crotalus Scutulatus writes:
    Getcher Good Health! Heals everything! Not only does it cure you of all your ills - I guarantee that with just two ounces of this Miraculous Oil you will never again need to worry about the high cost of healthcare, health "insurance", or being denied... [Tracked on January 16, 2007 1:25 AM]
COMMENTS (5 to date)
Jack writes:

And the government should print more money to increase prosperity and help the poor.

It is downright scary this guy may be taken seriously.

Chris writes:

include strict limits on total out-of-pocket spending. (Medicare currently lacks such limits, and Health Care for America would authorize a study of how best to incorporate cost-sharing limits into Medicare in the future.)

Medicare can't meet its obligations now - how in the world could any sane person seek to expand coverage?

Captain Arbyte writes:

I reviewed his book "The Great Risk Shift" on my blog; his ambitions are wider than just health care: pt. 1 and pt. 2

Brad Hutchings writes:

Dennis Kucinich is making waves about reinstating the fairness doctrine and legislating network neutrality. Sadly, I think small-l libertarians are going to learn that it's slightly better to have the party of no vision (the "Rs") in power than to have the party of vision (the "Ds") in power. Pick any liberal agenda item... health care, anti-oil, whatever. The same scene will play out. Get ready to play defense.

mjh writes:

I wonder if the reason people believe that healthcare can be provided for low cost, is that they use the cost of roads as an analogy. For any one person to purchase a road is really expensive. But when we pool our resources together (e.g. through the government) the pool of resources is larger and the cost to each individual is lower. The construction cost of the road is fixed, but everyone gets to use it. So it's possible to share the large construction costs and everyone share the benefits. Moreover, the more people who use the road, the more people benefit for little increase in cost.

The error is in assuming sharing the costs and benefits works the same way in healthcare. It doesn't. When the government provides healthcare, the cost of a $1500 MRI may be shared by everyone, but the benefits only go to the one who received it. And the more people who get MRIs the more expensive the cost is for everyone. As the number of MRI users increase, the cost approaches the cost of the procedure plus any deadweight loss.

My point: If using a road as an analogy is what's going on, it's a bad idea. Cost for roads is a relatively fixed variable when computing cost/taxpayers. But it ain't so for healthcare.

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