Arnold Kling  

My Alternative Health Care Bill

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Tyler Cowen offers his, which strikes me as overly complicated.

The bill I would propose would be one that encourages experimentation at the state level. Offer to support an experiment that allows an individual state to adopt single-payer, while allowing another state to offer deregulated insurance and medical practice.

What is frustrating to me is that many people would agree that the Massachusetts health experiment failed, and yet that is the experiment that is being used as the model for the current bill. The original promise in Massachusetts was that by eliminating the "free-riding" of the uninsured and by setting up an efficient government insurance exchange, insurance costs would go down. Instead, insurance costs there soared.

The current health care bill is viewed skeptically by every reputable health care economist. My guess is that even someone like Peter Orszag, who obviously is not free to speak his mind, is somewhere between disappointed and appalled at what is coming down the pike.

It would make sense to try more state-level experiments before choosing a model for a national system.

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The author at Health Care BS in a related article titled Health Reform a la Cowen & Kling (& Me) writes:
    Cowen offers offers a more detailed blueprint than does Kling, but it is WAY too dependent on the kind of government meddling that has created much of the current health care mess: Construct a path for federalizing Medicaid … produce a greater ... [Tracked on November 17, 2009 10:14 PM]
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Daniel Kuehn writes:

THANK YOU. I've been saying this to a lot of my friends for a very long time. This strategy was invaluable for figuring out how to target welfare and dramatically cut welfare roles. There's no reason not to try it for health care. I strongly, strongly agree.

I would only add that one thing they can do soon that will also help tremendously is end or at least phase out the tax privelege for employer benefits. I don't think that detracts at all from the state experimentation approach.

Daniel Kuehn writes:

*welfare roLLs

Ryan Vann writes:

I was with you until this,

"It would make sense to try more state-level experiments before choosing a model for a national system."

It would be even more sensible to just leave it at the state-level, as there are vast differences in healthcare needs by state. I could see an argument for you encouraging portability (which has merit, but one would assume a person would consider insurance implications before moving).

Mark writes:

I agree with you that Tyler's was too complicated. The only way to get any traction is to offer something simple. I like your idea about a state by state approach because frankly I live in a high-tax, high-Medicaid state and I am greatly annoyed at the prospect of being taxed to pay for increasing benefits to people in low-tax,low-Medicaid states that aren't taxing their own citizens enough. I am baffled at the bicoastal liberals who have gotten so caught up in their moralization of the issue that they don't grasp that all they are doing is giving Red State elites a free ride by paying for increasing benefits to Red State citizens.

Ryan Vann writes:


Indeed. Before I moved to Florida, I resided in Oregon, which has been a net subsidizer of Medicare/Medicaid for quite awhile. It always perplexed me that liberals entrenched themselves in the moral arguments, when they could take on conservatives, using there of playbook. I'd even actually have a modicum of respect for the Democrats, if they were to take Republicans to task on this discrepancy.

Robert Johnson writes:

What would happen if we just deregulated the whole darn mess and let people get their own health care whichever way made the most sense to them? I mean, food, shelter, and clothing are all critically important but no one seems to think that we need massive intervention into those markets in a way that affects access for every American.

And we could still give money to the poor as necessary (so they could buy health care according to their desires).

Les writes:

Why does anyone still think the healthcare bill is about healthcare?

If anything is clear, the healthcare bill is about big government power, and has little if any relation to healthcare.

Ryan Vann writes:


I suppose you could make a case for it being a power grab. Even if one isn't that critical of government, the bills only address insurance, which is only a portion of what constitutes healthcare. Either way, it is not a healthcare bill that politicians are deliberating.

MikeDC writes:

Why no discussion of leveraging states to make health insurance regulations symmetrical and allow interstate pooling of coverage.

The Medicaid issue Cowen talks about would be a good hammer to get states to shape up on those issues.

R. Richard Schweitzer writes:

Is this all not just another trip to intervention city?

And what motivates interventions through use of governmental functions?

One answer for at least one motive is rent seeking by politicians.

Shawn Smith writes:

Why stop at health care? Why not use the states for taxation/regulation experimentation (within some minimal federal limits per the Constitution)? I mean, is that not for what the Constitution was originally created? Limited power at the federal government and states retain the power for additional taxation/regulation. We have moved so far from the ideal the founding fathers were striving for that most people don't even think about it (except on blogs like this).

Babinich writes:

"My guess is that even someone like Peter Orszag, who obviously is not free to speak his mind, is somewhere between disappointed and appalled at what is coming down the pike."

If true I pity this man.

zc writes:

Robert Johnson writes: "I mean, food, shelter, and clothing are all critically important but no one seems to think that we need massive intervention into those markets in a way that affects access for every American."

Really? Is that sarcasm, or just plain ignorance. If you think the government doesn't intervene on a large scale in the provision of food and shelter, you're profoundly unaware of hwo things work.

Robert Johnson writes:

ZC, you make a good stab, but you miss the point. There is a substantially different quality to the Government's intervention (and proposed further intervention) into health care than there is in housing or food. Renting an apartment, for example, is a much more genuinely free market experience than is purchasing health care.

If you disagree, i'd like to hear why.

Floccina writes:

The obvious honest critique from the left would be that monopsony is difficult at the sate level and so single payer would not help on the state level. If squeezed providers would move out of state. One could counter that since licensing is done by the states, the states that opt for single payer could make a new set of doctors that are only able to operate in the single payer states but there would be a lag and thus a serious period of shortages.

Floccina writes:

BTW IMO when the Fed. Gov. implemented medicare they should have outlawed state medical licensing and licensed providers nationally.

zc writes:

[Comment removed pending confirmation of email address and for rudeness. Email the to request restoring your comment privileges. A valid email address is required to post comments on EconLog.--Econlib Ed.]

Dirtyrottenvarmint writes:

Arnold wrote an excellent book touching on this topic! Less than $10 on Amazon.

I agree with Arnold that many people would agree that the Mass healthcare experiment failed. However, this is because many people do not have a clue when it comes to their own government. The purpose of legislation is to increase the power and influence of the legislators and their advisory bureaucracy. All else is side effect.

Does anyone think the Mass. healthcare experiment was detrimental to progressives? Current Mass. Governor, Democrat. Both Senators, Democrats. (John Kerry! Still employed by the People!) Entire House delegation, Democrats. State Senate President Travaglini happily retired, with hishand-picked successor Murray taking over the role. Sal DiMasi, (Democrat) House Speaker who backed the bill, only left office because he is facing corruption charges...with enough cash on hand apparently to have a nice pack of lawyers backing him up for going on 10 months now. (Note to politicians: take the bribe, set aside half to pay your legal costs.)

Oh and it doesn't matter if Republicans back "reform" or not - where is the Republican former Governor Romney, who backed and signed the bill, these days? Failed Presidential bid and...crickets chirping?

So. Still think the Mass. Experiment "failed" for state Democrats?

Dan Weber writes:

Sorry to come in late, but one serious problem with "doing it at the state level" is that states cannot seal their borders. If they give UHC to their citizens, people can flock into the state. I forget the court case at the moment, but one state got successfully sued for denying coverage to non-residents (let alone people who had actually moved in just to become citizens and take advantage of the health care system).

It could work, but we would need to revisit our concepts of federalism.

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