David R. Henderson  

Daniel Goleman's Attack

PRINT
The ObamaCare-Induced Shift to... International Evidence on the ...

In "Rich People Care Less," Daniel Goleman, the famous psychologist who writes about emotional intelligence, writes:

In politics, readily dismissing inconvenient people can easily extend to dismissing inconvenient truths about them. The insistence by some House Republicans in Congress on cutting financing for food stamps and impeding the implementation of Obamacare, which would allow patients, including those with pre-existing health conditions, to obtain and pay for insurance coverage, may stem in part from the empathy gap.

I'm not sure how developed Mr. Goleman's sense of irony is. I'm guessing not very.

Also, he doesn't seem to know what he's talking about. Either that, or he's purposely misleading. He seems to imply that the House Republicans wanted to impede the part of ObamaCare that bans insurance companies from charging more for people who have pre-existing conditions. Frankly, I wish it were true because by banning insurance companies from pricing for risk, Obama is essentially taking the remaining insurance elements out of insurance. The whole idea of insurance is to price for risk. Would Mr. Goleman advocate charging the same rates for life insurance for 25 year olds as are charged to 70 year olds?

But the House Republicans, unfortunately, have not challenged this absurd part of ObamaCare. Instead, last week, they pushed two major changes to ObamaCare: delaying the individual mandate for a year and not letting Obama get away with unilaterally having the government subsidize members of Congress and their staffs. That's what the House Republicans wanted to impede. With the latter change, they would have been raising costs of insurance for themselves and their staffs. The part of Goleman's argument not quoted above is that when people have no contact with others, it's hard for them to have empathy. But clearly, the House Republicans do have contacts with themselves and their staffs.

Now to the irony. Which demographic group of people are the clearcut losers from ObamaCare? It's the young, whose rates for insurance will often increase by high double-digit percentages because insurance companies are no longer allowed to fully price for their low risk. Which players in Washington have shown that they don't care much about this? The vast majority of the Senate Democrats, the vast majority of the House Democrats, and President Obama. So staring Goleman in the face is an instance of people--Democrats in Congress and Obama--dismissing inconvenient people--young people--and another group of people who, whatever their motives, want to allow these young people to avoid ObamaCare for another year--House Republicans.

And Goleman totally missed it.

A conjecture: The New York Times series of which this is a part is moderated by that noted advocate of stating the issues accurately, Joe Stiglitz. I bet that Stiglitz had a hand in getting that paragraph added.

HT to Mark Thoma.


Comments and Sharing





COMMENTS (16 to date)
BC writes:

Let's consider what the individual mandate is. To pass constitutional muster, the mandate was turned into a punitive tax levied on the uninsured --- the very people that Obamacare was purported to help.

As DH points out though, whatever the stated original intentions, Obamacare ended up hurting primarily the young. First, it forces them to buy more insurance than they need through minimum converage requirements. Then, it overcharges them for that insurance to use the surplus premiums to subsidize others. To add final insult to injury, Obamacare imposes this punitive individual mandate tax on the uninsured --- those whose preferred insurance was banned by minimum coverage requirements or whose insurance was overpriced due to community rating --- for having the audacity to have insurance needs that are left unmet by Obamacare. These may not have been the original intentions of Obamacare architects, but they are the final results of the actual Obamacare law.

What does delaying the individual mandate mean in practice? It means delaying this punitive tax. Everyone that finds an Obamacare plan that meets their needs would continue to be exempt from this tax even if the mandate is delayed. So, a delay doesn't hurt the insured and would provide relief for those that Obamacare leaves uninsured.

It may indeed be "inconvenient" for the Obamacare architects that the law leaves some people uninsured. That inconvenience though is hardly reason to impose a punitive tax on them. As DH says, there is definitely irony in Goleman's statements.

kebko writes:

That is funny. Practically the entire Progressive agenda is a matter of taking from one category of people and giving to another category of people, based on who Progressives empathize with. As BC points out, Obamacare is such a confused mess that they have to selectively ignore even first order effects in order to pretend that the takings don't affect their political affiliates.

The underlying bonus irony is that Progressives have so convinced themselves that all opposition to their agenda is either from troglodytes or special interests that many of their self-defenses are devoid of even the slightest glimmer of curiosity about the sorts of self-doubt that serve as intellectual discipline.

ThomasH writes:

I don't know whether Mr Goleman knows what he is talking about, but community ratings does not take the risk out of insurance. It still means that Ms. A who will be extraordinarily healthy all her live will pay the same premiums for insurance as Mr. B who will be in and out of the hospital over his life. That sounds like insurance for risk to me.

David R. Henderson writes:

@ThomasH,
For the basic economics of insurance, check out The Concise Encyclopedia of Economics article, "Insurance," by Harvard professor Richard Zeckhauser.

Harold Cockerill writes:

The continued growth of government has to lead to most citizens being screwed. Where's the empathy in that?

Greg G writes:

So then, the the demographic group that loses the most from ObamaCare is the young. Actually it is the healthy young who don't want insurance since the unhealthy young will need to be more able to get healthcare.

Luckily, the healthy young are precisely the people destined to become older people so this grave injustice will fix itself over time. There is another characteristic of insurance that is not mentioned in this post. To some extent, risk is always averaged rather than being precisely calculated in each individual case.

Greg G writes:

It is indeed ironic that an expert in emotional intelligence like Goleman would allow his essay to be titled the way it was.

That title could not have been more effective in producing an emotional reaction in many people against the essay if it had been designed in a laboratory specifically for that purpose. The second I saw the title on the NYT front page this morning I knew the blogs would be all over it.

I doubt that Stiglitz had a hand in adding that paragraph as you suggest David but it wouldn't surprise me at all if he chose this unfortunate and self-defeating title.

A careful reading of the column reveals that Goleman is not accusing rich people of behaving any different than the rest of us would in this situation. It is "social power" that is advanced here as the root cause of empathetic reactions to the person with that power.

So then, wealth is just one form of social power. People who are physically attractive, have great athletic or musical talent, or have a great sense of humor, will all also have greater social power that will affect how empathetically others react to them.

pyroseed13 writes:

David, I agree that the purpose of insurance is to price for risk and that many people seem to forget that. But I think acknowledging this won't do much to persuade others that insurance companies shouldn't be required to cover preexisting conditions. How exactly do conservatives and libertarians propose to help these people? They could simply say "tough luck," which is fine when you consider the fact that it is not possible for any health care system to serve everyone because of limited resources. Unfortunately, I haven't heard any conservatives or libertarians pose any solution to this problem.

Daublin writes:

@BC, indeed, it's sort of like helping with unemployment by putting a fine on the unemployed.

blsdaniel writes:

I think that what is being missed here is that full repeal of Obamacare is pretty much standing Republican policy.

Had the original story been commenting specifically about the negotiations of this and last week, David would be correct. But it wasn't, so he's not.

blsdaniel

P.S. Clearly I continue my policy of only commenting when I disagree with you, David. But I still think you one the best commentators on the web and the most gentlemanly bar none.

MG writes:

Why are you all judging Mr. Goleman on the likely results of implementing/dismantling the various policies and practices he appears to support or criticize? His intentions are all that matter.

Ps. I wrote this in the best spirit of "Sowellian irony", but his bit about the "empathy gap" suggests that is really how Mr. Goleman wants to considered in judging his views.

Yancey Ward writes:

An honest and progressive politician would have advocated for Obamacare with all its rules and regulations, but would have put every single individual into the system and paid 100% of every policy premium funded by the progressive income tax system, and then left individuals to buy over and above that basic policy if they chose to. Of course, to do that would have required a hefty increase in the tax rates in the income tax system, and that is why you have the Obamacare mandate instead. And that tax increase would have fallen predominantly on people 35 years and older.

MingoV writes:
The whole idea of insurance is to price for risk.
Insurance pools participants' money to cover the costs of uncommon but expensive risks. Basing premiums on risk categories is not a requirement for any type of insurance. Risk category-based pricing is used when low-risk members of the pool dislike paying high premiums to support the high-risk members. Think of the three little pigs: the one in the brick house has almost no risk of fire or wolf-wind damage, so he resents paying the same premium as the pig in the straw house. Risk-category based premiums now are the norm for all insurance. The situation is far different than the single pool approach: today's insurers create hundreds or thousands of risk categories.
ThomasH writes:

"For the basic economics of insurance, check out The Concise Encyclopedia of Economics article, "Insurance," by Harvard professor Richard Zeckhauser."

If collecting money from un-sick people to pay for health care of people who fall sick is not "insurance" in Mr. Zeckhauser's book, too bad. But let's not quibble about nomenclature. ACA is no better an no worse if we call what people are now going to be able to buy "imsurance."

Thomas Sewell writes:

Not enough people appreciate high-end dining on gourmet food and spirits. A significant proportion of Americans go through life not have the finest meals to eat.

So let's pass a law making it illegal to sell less than Michelin-star level food prepared by a licensed chef. Some people won't want to eat out as a result, so we'll pass another law that people must spend at least 5% of their annual income on eating out or they'll have to pay that money as a fine, AKA a tax. For those who can't afford it, we can have a partial subsidy in the form of a tax refund.

Any economists care to predict the results?

Why when the results are so obvious in that example, do so many people have a hard time grasping the results when the example is applied to health insurance and health care?

Brad D writes:

The individual mandate is very unpopular. From a political perspective, why would the GOP want to give up a potential campaign advantage in 2014 vis-a-vis the individual mandate? Doesn't make sense.

Comments for this entry have been closed
Return to top