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This Is Not Helping

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For some reason, Bill Clinton has decided to play into the hands of the bad guys on the ACA:

In the midst of the troubled rollout of the Affordable Care Act, the Obama administration has done a fairly effective job persuading red-state Democrats to refrain from endorsing legislative changes that would substantively cripple the new law. But organizing skittish red-state senators is one thing; organizing Bill Clinton is another. The former president now says that the government should change Obamacare to allow everybody in the individual market who likes their plan to keep it..

Really, no. Obama was wrong to make claims about the ability of individuals to keep their insurance that were literally false. But of course 1)any health care reform doing was going to prevent people from keeping some forms of crappy insurance, and 2)it’s silly to imply that under the status quo ante you were guaranteed to be able to keep your insurance.

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  • Bill thinks his stance will help Hillary, even if no changes are made to any part of Obamacare.

    • Warren Terra

      For those of us who remember 2008, this is par for the course. I don’t in the least doubt the sincerity of Bill’s desire to help Hillary, but while he was popular and his more anodyne appearances doubtless helped her in that contest, seemingly every time he had a bright idea and opened his mouth it was a dumb move both short term and long term. As this one is.

      • JoyfulA

        I was mildly in favor of Obama until Bill started dog whistling in South Carolina, which reminded me that if Hillary won, I’d be hearing a lot more of Bill for years and years. After that, I was totally Barack.

        Apparently the good Democrats of South Carolina felt the same way, because initially Hill was way ahead in SC polling.

        • colleen

          Quite so. Bill Clinton is attractive to Southern Democrats. But, then, following the strategy of Southern Democrats is how we women and people of color ended up loosing so much ground over the past 35 years. Funny how ‘common ground’ always involves fucking over the historical base of the Democratic party.

    • Jordan

      yeah, that is my read too.

      • The prophet Nostradumbass

        So, Bill Clinton thinks that Hillary should pull an Al Gore on Barack Obama? Yeah, that’ll work.

        • Jordan

          … What did Al Gore do to Obama?

          Just randomly tossing out names doesn’t actually mean anything.

          • The Black Thing

            Think putting space between. Lip-locking Tipper is your clue!

          • NonyNony

            “Pulling an Al Gore on Barack Obama” would mean campaigning the way Al Gore did in 2000. Al Gore ran away from Bill Clinton at every turn, convinced by God alone knows who that being seen as a continuation of the Clinton administration would be a problem for him. It’s why he selected Joe Freaking Lieberman as his running mate – he was making lots of gestures towards the “things will be different in my administration” card.

            Unfortunately for him, Clinton was pretty damn popular outside of the DC press corps and the Congress by that point. I still think that had he said “screw you” to the DC insiders and ran a campaign based on the idea of “hey, did you like the last 8 years? Let’s have another 4!” and banged the hell out of that drum he would have won enough votes to keep the decision the hell away from the Supreme Court.

            • Jordan

              Yeah, that makes tons of sense. My bad.

          • Rigby Reardon

            You must be very young.

            • Jordan

              No, just dumb.

        • Jordan

          John Kerry should have pulled a Joe Lieberman on John Edwards, obvi.

          • The Black Thing

            Now that’s random… Alanis Morissette might even say ironic.

  • The prophet Nostradumbass

    Bill Clinton needs to go run his foundation, have a Coke and a smile, and shut the fuck up.

    • GoDeep

      +1

    • Jordan

      I dunno, does his foundation really do anything good other than promote: “I AM EX-PRESIDENT BILL CLINTON HERE TO HELP YOU ALL”? (I honestly don’t know. I’ve read bad things about Haiti, but, again, don’t know).

      • fledermaus

        From what I can tell it one giant TED talk with the added benefit of helping dozens (DOZENS!) of people every year.

    • Royko

      Filth flarn filth!

  • Incontinentia Buttocks

    For some reason, Bill Clinton has decided to play into the hands of the bad guys on the ACA…Obama was wrong to make claims about the ability of individuals to keep their insurance that were literally false.

    Thank goodness messaging makes no difference!

    • Obama isn’t running for anything, and no, Clinton’s remarks won’t make any difference in 2016 either.

      • Incontinentia Buttocks

        Nor will it affect people’s views of the ACA, according to this blog. So why does Scott care about what Bill Clonton says. Is there some sort of ex-presidential BULLY PULPIT?

        • Incontinentia Buttocks

          Clinton* (stupid iPad…)

        • Scott Lemieux

          Can you direct me to the part of the post where I argue that Clinton’s dumb comments actually matter (as opposed to them being dumb?) Thanks!

          • Incontinentia Buttocks

            Fair enough, I assumed that your blogging about it meant that you thought it was important. But, in fact, you never say that it is. Scott. I’ll grant you the courage of your convictions about political speech having no effect on politics.

            • Incontinentia Buttocks

              Though I guess I read the headline as suggesting that, had Clinton said nothing or said something else, he might have been helping. Though, again, that was an inference on my part. You could indeed have been suggesting that speaking cannot help.

    • joe from Lowell

      At this point, it’s just transparent trolling.

      No one could still not get this.

  • The prophet Nostradumbass

    Another thing about ol’ Bill. Who the hell came up with the idea of calling him “the Big Dog”, and why haven’t they been smacked across the face with a dead trout, repeatedly?

    • I believe his aides in Arkansas called him that, and it was not entirely complimentary.

      • Sharon

        I call him The Clenis

      • Ed

        I believe his aides in Arkansas called him that, and it was not entirely complimentary.

        It sometimes happens that a nickname will have its origins in mixed opinions and change over time, as happened here. When people started calling Michael Collins of the IRA the “Big Fellow” it was not always with a positive inflection. Later it became a sign of affection.

  • GoDeep

    Really, no. Obama was wrong to make claims about the ability of individuals to keep their insurance that were literally false.

    I don’t understand why the WH doesn’t push back harder against this meme. Its not literally false, its literally true. Plans are grandfathered in so long as they don’t make any changes, so if the insurers want to keep offering the plans they shouldn’t change them. Simple. You can’t blame the WH if the insurers are changing their plans. This isn’t even a new issue. Its been well known for a few years now.

    • The prophet Nostradumbass

      Last night on Chris Hayes’ show, he pointed out that these policies that are being cancelled are largely ones that the insurance industry knew would need to be cancelled when they were offered.

      That sentence looks terrible, but I’m not sure how to fix it.

      • Jordan

        The insurance industry is pre-cancelling policies that would have been post-cancelled once anything bad happened.

    • Incontinentia Buttocks

      Nope. Literally false. For it to be literally true, insurance companies would have had to have been required to continue to offer grandfathered plans.

      • Scott Lemieux

        Right. The claim wasn’t meaningfully false but it was literally false.

        • GoDeep

          Work w/ me a second, I’m trying to get my head around what you’re saying. Obama said, “You can keep your policy if you want to.”

          You two are saying for it to be literally true Obama would’ve had to say instead, “You can keep your policy if you want to AND if your insurance company keeps making it available”? Am I understanding that correctly?

          • stepped pyramids

            Yes. At least some of the motivation behind cancelling the plans is related to the ACA — they can’t jack up the premiums, for instance. It’s clearly more profitable for the insurance companies if the people currently on Scrooge plans either buy the expensive off-exchange alternative or buy a subsidized exchange plan.

            They’re not being forced to cancel the plans, but the ACA sets up an environment where it’s profitable to do so.

            My understanding is that the Landrieu plan changes the situation by requiring insurers to maintain grandfathered plans until there’s nobody using it anymore. This is a case where the ACA errs too far on the side of “market-based reform”.

    • Anonymous

      Unfortunately, the literal truth of “if you like your plan, you can keep it” as they meant it (“plans existing at this moment will not be canceled under this law”) is out of line with the public’s understanding (no existing plans can ever be canceled due to the ACA). And in politics, perception can be more real than truth.

      What I don’t get is: anyone whose policy is being canceled bought a plan post-ACA that the insurance companies *knew* would be illegal by 2014. Why are they not suing? If the insurance companies acknowledged this in the policy, then isn’t it just caveat emptor?

  • Nick056

    I dunno. Obama’s promise was specific, personal, and false. Yes, the grandfather clause shows a good faith effort to allow people to keep their plans, and the media has decided not to give any credit to Obama or the Democratic Party for grandfathering plans. Yes, Obama’s promise is far closer to being true than the Republican promise that the government would take everyone’s health insurance away from them, take over 18% of the economy, create death panels, etc. Yes, insurers will use this to cancel plans and evade blame. Yes, this is just a perfect situation for Republicans to exploit.

    But Clinton has a point. People who bought their health insurance policy in 2011 are going to feel lied to. They’re squeaky wheels. “Tough titties” is not a great stance.

    • Warren Terra

      Sure. But one reason they’re being lied to is that it’s good business: the company “canceling their policy” immediately tries to massively upsell them. Most of the people “losing their policies” are losing policies that were terrible for them, and will be able to get an equal or superior policy for the same money – not that they’d know this from the fraudulent letter their insurance carrier sends them.

      • I think the reality is more complicated. Essentially, very healthy people were actually getting the benefit of all the adverse selection in the current system. If you literally had no preexisting conditions, you could get catastrophic coverage cheaply.

        Well, Obamacare’s mandate forces the higher risks into the system and requires community rating. That was guaranteed to raise the rates of these healthy people, because they can no longer take advantage of adverse selection.

        All health care reform is a tax on the healthy to pay for the sick. In socialized systems, the tax is explicit- everyone understands that Medicare taxes and premiums go to pay for sick people. Obamacare conceals the tax in the form of an insurance regulation, but it is still the case that the healthy must pay more so the sick can be covered.

        This is the design. The grandfather clause, and Obama’s rhetoric, was in part an attempt to conceal this, because they didn’t want to admit they were taxing the healthy to pay for the sick.

        But it isn’t simply a matter of them being switched from crappy to good insurance. They were the winners in the current system, as long as they stayed healthy, and the new system taxes them to pay for the sick. Unfortunately, the sponsors tried too hard to conceal this, so many of them are just finding out now. And there is no way to avoid this problemwwithout unraveling the law.

        • Tucker

          It’s not about taxing. It’s the nature of insurance; shared risk and good social policy. Taxing is about how you pay for for it. Sell the policy not the mechanism and if you do it right, maybe we can get to Medicare for all ( if you want it, or roll your own if you can afford it).

          • The “tax” element is the mandate to purchase a community rated policy. It has the same effect as a direct tax to pay for Medicare for all or a National Health Service would.

        • Malaclypse

          All health care reform is a tax on the healthy to pay for the sick.

          Knowing that you think these are two distinct groups makes me glad I usually don’t bother to read what you have to say on this topic.

          • Knowing that you think that there is no redistributive element in national health insurance convinces me you are a complete imbecile who prefers to believe political spin over substance.

        • Lasker

          I wouldn’t phrase it the same way as you did, but I think this is basically the main problem. The currently-and-prevously healthy are losing the privilege of paying less for their insurance, and since it is extraordinarily rare for any reasonably powerful group to lose any privileges in this country, they are squealing like stuck pigs.

          • Yes, and note Malaclypse’s response- a lot of people think this is something that can be dealt with in a communications strategy “you are not ‘healthy’, you just aren’t sick yet” rather than a reality that there is a class of beneficiaries of the old system who are indeed now being asked to pay more of the costs of other people under the new system.

            • Warren Terra

              You need to listen to comedian, cerebral palsy sufferer, and disability-rights activist Francesca Martinez on the notion of disabled versus able-bodied, and how those of us not in the first category need to think of ourselves as being “not-yet-disabled”.

              A lot of the behavior being disallowed here is people buying ludicrously inadequate plans because, chances are, they need no plan at all – but the penalties for those chances not playing out as anticipated are monstrous. It’s like everyone having yo play Russian Roulette, being offered the option of removing the bullet for a fifth of your wealth, and refusing the offer because simple math says it’s only worth a sixth of your wealth.

              • “No plan at all” is an overstatement. That’s the problem here- it is false that nobody is better off in the current system. People who don’t get sick until age 65, right now, are not required to participate in the risk pool and will thus pay less without Obamacare. Now, of course, they are gambling, but you know, the winners of state lotteries are better off because state lotteries were enacted, even though they got very lucky.

                • But isn’t this a retrospective analysis? On an expected utility model aren’t they still better off? (After all, we can’t prospectively say that their risk of illness before 65 is 0.)

                  It’s likely that the set of trade offs have shifted, ie, individually they are bette riff on some measures and worse off on others. Collectively, both morally and prudentially, we’re better off the closer we are to sane universal coverage.

                • Malaclypse

                  People who don’t get sick until age 65, right now, are not required to participate in the risk pool and will thus pay less without Obamacare. Now, of course, they are gambling, but you know, the winners of state lotteries are better off because state lotteries were enacted, even though they got very lucky.

                  So, your argument that the Koch brothers have a point is what you think Real True Leftists need to believe?

                  Despite what you believe, statistical ignorance is not, in fact, a plan.

                • The thing is, good luck convincing someone with less money in their pocket that they are not better off. Is a state lottery winner worse off because the bet that paid off had a negative expected value?

                • You said they were better off. But that’s meaningless without specifying the measure. I pointed out that in some standard measures they are better off. (This is before we get to more I direct effects.)

                  This is all orthogonal to what will be convincing and understandable.

                  Furthermore, (many) people who are underinsured are arguably free riding (esp with the no blocking for pre existing conditions but even on the old system a case can be made). And duh, losing your free ride leaves you worse off. I’m not too sympathetic to them but its even more of a losing pitch to point that fact out.

                • I think “better off” actually has a fairly objective meaning here that is being deliberately missed with a bunch of statistical obfuscation.

                  Human beings are not statistics. They care about outcomes. My state lottery winner made a negative expected value gamble, but he or she is still better off for having made it.

                  What you are arguing is that it is IRRATIONAL to assume you are never going to get sick and to buy low cost catastrophic insurance on the individual market. That is actually a statement I quite agree with. However, that doesn’t mean that everyone is automatically made better off if the option is taken away. Those people who are the winners in life’s lottery– who do not get sick until age 65– are, indeed, made worse off by what is essentially a tax-and-transfer program to pay for those who do get sick.

                  Saying “well, you got something for your extra money” isn’t a response to that, any more than telling the lottery winner that he or she would be better off if he or she had not been allowed to make a negative expected value gamble is a convincing argument. Human beings don’t care if they are statistical anomalies. The people who win their gambles are, indeed, better off, even if they got lucky.

                  And I agree with your last point, that they are, in fact, free riding. That’s the whole point. Adverse selection is really bad. You want a big insurance pool. And I actually go a lot farther than Obamacare– I think we have a moral obligation to enact the British system and directly pay for the doctors necessary to treat the health care needs of every person within the United States. Obamacare is about a sixth-best solution, at best.

                  But that’s not what we are discussing. We are discussing why people are upset and why they want to keep their plans. And they are upset and want to keep their plans because they are currently saving money by making a gamble, and they would like to continue making that gamble, which Obamacare essentially prohibits them from doing. That’s why they are upset, and the winners of that particular gamble will, indeed, be worse off under Obamacare.

                • I see that in addition to not understanding the concept of “insurance” and “subsidy”, you have trouble with “risk” and “better off”. All this in addition to your well known problems with statistics. Tut!

                  I think “better off” actually has a fairly objective meaning here that is being deliberately missed with a bunch of statistical obfuscation.

                  Oh, and I forgot your reading comprehension problems!

                  Look, when evaluating whether someone is, all things considered, better (or worse) off in circumstances A vs. C, you have to, you know, consider all things. You don’t get to cherry pick! (That’s not being “objective” that’s being “dumb ass”.)

                  So, it’s perfectly possible that someone is worse off with respect to disposable income and better off with respect to risk. There’s even a very common transaction that goes on in most societies wherein people move from higher disposable income and higher risk to lower disposable income and lower risk: It’s called “buying insurance” and I would say that I’m sure you have experience with this phenomenon, but who knows with you in your big plastic bubble of obtuseness.

                  People can even be worse off wrt satisfaction, disposable income, and better off with respect to risk and *on net* better off! Imagine that!

                  Of course, it’s also possible to be worse off wrt disposable income and risk, and better off with respect to satisfaction!

                  Imagine that!

                  It’s even possible for people to be highly (or poorly) satisfied at time t because they have a misapprehension about their risk. It turns out, shocking! I know!, that people are typically bad at assessing probabilities or pricing risk. There are, sit down!, phenomena such as loss aversion which illustrate our psychology and objective measures can get wildly out of wack.

                  Now, it’s possible for there to be all things considered losers and winners under Obamacare (if we ignore societal benefits). Indeed, richer people get taxed to subsidise insurance for poorer people! That is, the poorer people receive government subsidies to help pay for their insurance.

                  It’s even possible that some people are worse off with respect to disposable income, risk, and satisfaction! I feel for those people!

                  I even feel for people who are worse off wrt disposable income and better off wrt risk. I can understand why their satisfaction is lowered! But I’m willing to bet that in almost all such cases, even factoring in their loss of satisfaction, they are better off, all things considered. For those who aren’t because they made fairly elaborate plans based on ignoring risk, I’m still sympathetic to them. It sucks when the free ride ends and it sucks more when 1) you didn’t realise it was a free ride and/or 2) you didn’t plan recognising that the free ride could end.

                  I perfectly well understand that those who are all things considered better off but worse off wrt disposable income are going to be unconvinced by the fact that they are better off. Cf people have trouble understanding risk/hate losing things/enjoy free rides. Perfectly understandable.

                  However, there’s no reason to concede the facts. And dude, there’s no reason to make silly arguments in order to make the reasonable point you have. It just makes you look silly.

                  Now, as for your rather bizarre arguments and analogies about risk. First, sigh. Take a class or something, already, ok?

                  Second, the analogy between the actual lottery winner and the 20 year old now who may or may not be healthy until 65 breaks down because, duh, the lottery winner has their pay off in hand. Their *risk* of not winning the lottery after…er…HAVING WON THE LOTTERY is, in fact, zero. The 20 year old’s risk of getting sick is, when they are 20, non-zero. Risk is risk, dude, not certainty. You buy insurance *hoping not to need it* (at least, ideally). You are buying indemnification, not a payout.

                  The amazing thing is that this is all bog standard. Mandatory car insurance (“We subsidise the people who get hit by reckless drivers!!!”), companies are required to buy all sorts of insurance by law or just by contract, etc. etc. etc.

                  And yes, we both roughly agree why people are upset: They worse off wrt disposable income. That’s understandably upsetting. But to go on and say that the ones who end up not needing health care have gotten nothing or are worse off because they didn’t use health care is just daft. By this logic, let’s just ban health insurance for people in their 20s! Most of them will be made better off, right? Yes, some will be worse off, but the net utility must be TREMENDOUS!

            • Lasker

              I’m not sure if you think this is some kind of injustice or you are just phrasing it in a weird way. FWIW I think this new arrangement is obviously far more just than the old.

              There’s no reason we should view this as inherently more redistributive than one that allows only people with a clean bill of health to purchase health care at a reasonable rate. I would view the old system as a distortion, and this as a correction.

              I’m not sure there is really any good way to communicate this. “You used to enjoy special privileges, but now you don’t” isn’t likely to make people feel any better. I think it is marginally better than telling people they don’t exist or that their old insurance must have been terrible in some way they weren’t aware of though.

              • I don’t have a problem with charging healthy people more. I have many issues with Obamacare, but this isn’t one of them.

                My point is exactly what you said at the end of your post. It is just that the healthy subsidize the sick, but telling the people who have to pay more that they really are better off based on statistical and justice arguments isn’t going to work.

                • You really need to stop conflating the messaging and the reality.

                  The subsidy model of insurance neglects the fact that you get something real even if you happen to never consume health care (which is unlikely anyway): risk reduction. This is before any systemic effects such as the availability of a functional health care system or people being vaccinated.

                • Prohibiting the state lottery gives the public risk reduction too. But try convincing the winners that they are better off because of it.

                  Risk reduction is ONLY a great benefit if the person is either (a) risk-averse or (b) not risk averse, but will be unlucky in the future. To the non-risk averse who are also lucky, you have given them something they didn’t want and charged them for it.

                  As I said above, the moral case for doing this is clear. Indeed, MORALLY, we shouldn’t even bother with insurance companies or for-profit hospitals and should just nationalize the entire system so that we can tax-and-transfer ALL needed care.

                  But in terms of what a person actually receives, the winners of life’s lottery ARE indeed losing out under Obamacare. And telling someone that what they don’t want and won’t use actually benefits them is a losing argument, for a very good reason which is that human life is not actually the same thing as a statistics class.

                • Ah so you just don’t understand insurance.

                  Thanks for clarifying.

                  (And yes, many people don’t understand insurance and explaining it to them is often not helpful. Again, that doesn’t mean you also need to be confused about it.)

                  (And I really love your move to “what they actually receive” which you think does not include risk reduction. And risk reduction occurs regardless of your feelings about risk.)

                • Bijan, that’s insulting. Of course I understand insurance.

                  But there’s one rather crucial difference between insurance and Obamacare– insurance is a voluntary transaction. People decide whether they want to carry it, and they decide how much they need. For instance, absent a mortgage or some sort of regulatory issue involving a particularly high risk, such as a flood zone, a homeowner is entitled to decide that it’s worth it to not insure, or underinsure, and run the risk of catastrophic loss. Taking risks is a perfectly legitimate free market decision. People do it when they gamble. They do it when the invest. They do it when they engage in risky recreational activities.

                  You are generally allowed to take risks.

                  When insurance is mandated– and again, I have no problem as a public policy issue with insurance being mandated– what is happening is the government is saying you are NOT allowed to take this particular risk. You must pay money to mitigate it. You are not allowed to gamble.

                  And in the end, saying you are not allowed to gamble is, indeed, making the portion of the population who WANTED to gamble and WERE gambling worse off. You are obfuscating that by saying “well, I know better than they do and with my statistics I can actually show they are better off”. But that’s not something you get to do in a free society. You are not the arbiter of the wisdom of other people’s choices. You can certainly say that they should be prohibited for public policy reasons, or moral reasons, or cross-subsidization reasons. But you don’t get to say that you know better than your fellow citizens. They have the right to view risk differently than you do.

                  If this were not true, we should prohibit skydiving, bungee jumping, and unprotected sex.

                • Hogan

                  Oh, so it’s just social insurance that you don’t understand.

                • Malaclypse

                  When insurance is mandated– and again, I have no problem as a public policy issue with insurance being mandated– what is happening is the government is saying you are NOT allowed to take this particular risk. You must pay money to mitigate it. You are not allowed to gamble.

                  To the Real True Leftist position on Medicare is the same as the Libertarian Party?

                  I’m stunned.

                • sibusisodan

                  But that’s not something you get to do in a free society.

                  Well, we’ve all learned something here today, I reckon.

                • Bijan, that’s insulting. Of course I understand insurance.

                  It is not remotely evident in your comments.

                  But there’s one rather crucial difference between insurance and Obamacare– insurance is a voluntary transaction.

                  Wow, did you really mean to prove your lack of understanding so quickly? Do you drive? Engage in a business? Or…read your own comment?

                  For instance, absent a mortgage or some sort of regulatory issue involving a particularly high risk, such as a flood zone, a homeowner is entitled to decide that it’s worth it to not insure, or underinsure, and run the risk of catastrophic loss.

                  Yes, I fully agree that ABSENT A CONDITION WHICH TRIGGERS MANDATORY INSURANCE that insurance is a voluntary transaction. But…the mandatory insurance isn’t non-insurance. And a homeowner can be, objectively speaking, underinsured. You can make them better off by, for example, *giving* them insurance for free!

                  So, you understand insurance, eh?

                  And in the end, saying you are not allowed to gamble is, indeed, making the portion of the population who WANTED to gamble and WERE gambling worse off.

                  See my earlier comment. We may be making them worse off wrt to one thing but better off wrt another or even wrt all things considered. Your slight of hand (and really, it’s amazing that you talk about people playing statistical games when you take an ordinary concept like risk, jump to the future, then say that someone had no risk because the didn’t get hit by the bad outcome <– nonsense, dude, nonsense!) is to take "worse off in some respect" and turn it into "worse off AND EVERYTHING ELSE IS POINTY HEADED STATISTICAL GAMES".

                  Well, if *you*, master of the concept of insurance, say so!

                  You are obfuscating that by saying “well, I know better than they do and with my statistics I can actually show they are better off”. But that’s not something you get to do in a free society. You are not the arbiter of the wisdom of other people’s choices.

                  Say what?

                  Look, we can price risk. There’s a whole discipline and segment of the economy devoted to that. We can estimate the value of a portfolio with and without risk mitigation. We can even do this in a FREE SOCIETY!!!!

                  And thus we can talk about people being better or worse off without necessarily appealing to their preferences. The wacked out rich person who doesn’t understand marginal taxation rates and thus tries to keep their income below a certain level is worse off (income wise) than if they had some of their income in the highest tax bracket. This is true even if they prefer to forgo that income. And IN A FREE SOCIETY we do, in fact, let them be worse off in that way. There is some gain to them in freedom and, well, perverse crabbiness. But I would submit that they are not better off all thing considered and in this FREE SOCIETY I can point that out to them.

                  To pretend that people get nothing of value from having insurance is just bizarre. Whether they want it is a different story.

                • I think socialized medicine is fine. I don’t pretend it doesn’t make a single person worse off. As usual, snark conceals idiocy.

                • If this were not true, we should prohibit skydiving, bungee jumping, and unprotected sex.

                  Or Russian Roulette, yeah!

                  Also, it doesn’t seem that skydiving is wildly high risk (a few other sources gave varying results).

                  We do forbid or regulate all sorts of high risk activities, so…your point is…? FREEDOM!

                • I was really hoping you’d go into your “snark is bad” mode and thus reveal that you actually 1) don’t care about argument and 2) don’t have an argument.

                  You were refuted. Suck it up.

                  My post was not only, merely, or mostly snark. Sorry that you lack the perception to focus on the substance but are horribly distracted by the tone. Part of your reading comprehension troubles, I knwo.

                • Bijan, I was not referring to you with my comments about snark.

                • Ah, my apologies then.

                  I’m still an asshole, though, right?

                • You redeemed yourself (and then some) by researching my point. Nobody ever does that on the Internet.

              • Bijan, actually from a pure price standpoint, insurance is always a bad bet, because the insurer has to make a profit.

                The reason we insure anyway is people are risk averse. But I can’t know this, because you decided to be an asshole and say I don’t understand insurance.

                When we mandate insurance, it is for policy reasons, not because it makes everyone better off.

                • Bijan, actually from a pure price standpoint, insurance is always a bad bet, because the insurer has to make a profit.

                  I’m sure you thought this was coherent, but I don’t see how it is.

                  What on earth do you mean by “pure price standpoint” and how does that translate into a “bad bet”? Insurance costs money. Part of the cost is insurer overhead (including profit). And…what?

                  Is the overhead more than the value of the indemnification? Then…why does anyone ever by insurance?

                  Seriously, this strongly indicates a lack of understanding of insurance.

                  The reason we insure anyway is people are risk averse.

                  I would agree except I think you are confused about this. The reason we insure is to mitigate risk. That is, what you buy when you buy insurance is the mitigation of risk. This is related to your tolerance of risk, but I think we need to keep away from the psychological aspects of it because that keeps confusing you.

                  But I can’t know this, because you decided to be an asshole and say I don’t understand insurance.

                  I called it as I still see it. I’m sorry that you don’t understand insurance and I’m even sorrier that you continue to make bad arguments based on that lack of understanding.

                  When we mandate insurance, it is for policy reasons, not because it makes everyone better off.

                  There’s a straightforward sense that being less at risk is being better off. It might not be better off all things considered. There may be other things you’d trade for that lowering of risk. But to pretend that lowering risk is inherently valueless except for people who actually experience the negative event is to not understand the meaning of risk and thus of the meaning of insurance. Seriously, dude.

                • I don’t claim that avoiding risk is valueless. I do claim that it is a subjective matter. From a purely monetary standpoint, all insurance pays out less than is paid in. The “value” of insurance depends on the person’s risk aversion.

                  Or at least that’s when I learned when worked on law and economics scholarship.

                • Malaclypse

                  Bijan, actually from a pure price standpoint, insurance any exchange is always a bad bet, because the insurer someone has to make a profit.

                  Took your statement to the logical conclusion.

                • I don’t claim that avoiding risk is valueless.

                  But only for people who either 1) have fear or 2) experience the adverse event?

                  I do claim that it is a subjective matter.

                  That can’t be quite right. Risk mitigation is priced in markets, yet? But, we also have premium determination, which gives us an idea of how much it takes (from a given pool) to mitigate a risk (costs and profit are added on top). And all that’s rather objective.

                  From a purely monetary standpoint, all insurance pays out less than is paid in.

                  Yes, and? Seriously, this doesn’t clarify your prior “bad bet” claim. The insurer takes on risk as well,

                  And actually, that just shows that you’re wrong. Sometimes, insurers end up paying out more than they take in. They have an unprofitable year or go bankrupt. And…there are administration costs?

                  Really, I totally don’t understand what you think you’re arguing here. Insurance is only ok if all the money going into premiums is paid out in claims? That you should only buy insurance if you reasonably expect to get back the same (or more) in claims than you paid in premiums? You do realise that the “same” means that you have a kind of bank account and “substantively more” means that you’re gambling? In which case, what you don’t have is insurance.

                  The “value” of insurance depends on the person’s risk aversion.

                  A really important question is how to measure people’s actual (e.g., fully informed) risk aversion. It turns out to be rather complicated (and I was naive to invoke expected utility directly; hmm). But this is why I separated out (at least) three things: 1) disposable income, 2) satisfaction, and 3) risk.

                  I agree that people can value health risk so low that they would not what to pay even a small premium. It’s even possible that they would adhere to that preference even if they got really sick. I don’t think there are a *lot* of such people. Instead, I suspect that a good number of people are wrongly assessing their risk and thus not valuing risk mitigation as they would if they fully understood their risk. That is, of course, an empirical question.

                  But this has nothing to do about whether you hit the adverse event. Your priior risk remains the same! Risk has been mitigated even if you weren’t indemnified.

                  If you have a citation that says otherwise, I’d really be interested in seeing it.

                • Hmm. Ok, I’m reading, and let me reset by apologising for saying you don’t understand insurance. I’m not sure *I* understand insurance anymore, so I don’t have a lot of confidence in my claim.

                  So, I found this

                  If you skip down to “Insurance and Risk Aversion” you’ll see an analysis that shows that insurance has negative expected payout:

                  Over the large number of people who sign up for insurance, the insurance company pays out less money in claims than it takes in. If it doesn’t, it can’t stay in business. Your expected payoff is therefore less than your premium, unless you can fool (or legally force) the insurance company into selling you a policy with odds are in your favor. Buying insurance has a negative expected value. Still just like playing roulette.

                  Except that insurance is worse than roulette. Roulette’s expected value is about -5% of the amount bet. The expected value of a health insurance policy is about -10%, relative to the amount bet, the insurance premium paid. This is for the best-regarded health insurance plans, like Blue Cross. It’s what they mean when they say that their “medical loss ratio” is about 90%.

                  Some insurers sell policies to individuals or small groups with medical loss ratios of 60% or less. These policies’ expected value is -40% of the amount bet, or worse.

                  I love the comparison with roulette (-5% expected payout) vs. large group insurance (-10% expected payout). If this is what you meant by the “bad bet”, then I now understand it, and agree. BUT!

                  Going without insurance generally does have a higher expected value than going with insurance, but the risk is much greater without insurance. This is the opposite of roulette, in which you assume a risk by playing. In insurance, you pay the company to assume a risk for you.

                  Ok.

                  A risk averse person will pay more than the expected value of a game that lets him or her avoid a risk. Suppose you face a 1/100 chance of losing $10,000. Risk aversion means that you would pay more than $100 (the expected or “actuarially fair” value) for an insurance policy that would reimburse you for that $10,000 loss, if it happens.

                  So, I agree that risk aversion is part of the picture but so is the actuarially fair value.

                  (I will note that none of this analysis says anything about the people who didn’t directly experience the loss!)

                • Bijan, we don’t have to agree on all this, but thank you for taking the time to research the point I was making. That sort of thing is rare and appreciated.

                • People might find this interesting.

                  It’s very complicated, but interesting. This is worth reading first.

                  So, risk pooling generates a pure Pareto improvement (assuming we commit before we know whose house will burn down).

                  I think this is what was confusing me in your comments, Dilan. It’s one thing to note the difference between high and low risk groups (or individuals) and another to look post event to see who was a “winner” (or “loser”).

                  Anyway.

                • Bijan, actually from a pure price standpoint, insurance any exchange is always a bad bet, because the insurer someone has to make a profit.

                  Took your statement to the logical conclusion.

                  Actually, to be fair to Dilan, I think he meant exactly what the link I pointed to meant. Insurance isn’t actuarially fair because you have overhead. That overhead eats into the expected utility (it isn’t part of any payoff, thus is always lost), thus making the bet stacked against you.

                  Now, the gain that makes it worth it is that you derive utility from risk lowering. But that’s only true to the degree that you are risk adverse. (And there’s a lot of complexity there.)

                  The analogous statement would be something like, “Retail rips you off because wholesale is cheaper.” Or “Wholesale rips you off, because you pay above the manufacturing costs.” Which, I guess, doesn’t make it any better, because you typically don’t have access to the good except via retail.

                  Which gets us back to the problem: Noting the bad bet nature of insurance doesn’t really tell us whether insurance is a bad deal or makes people worse off.

                • Bijan is correct about what I meant. I have a special scholarly interest in risk-taking, such that I co-authored 2 published papers about the issue as a practicing lawyer even though I have never practiced in that area. What I said is basically the orthodox view on insurance- that it is a negative expected value wager, we do it because we are risk averse, and that society requires it in many situations for public policy reasons. In the health care area, there are tons of public policy justifications for mandatory insurance, of course.

                  But I look forward to reading Bijan’s article and seeing the justification for Pareto optimality (that’s economic-speak for “everyone either is better off or no worse off”).

                • I hope that if you had put it like that I wouldn’t have been confused and thus grouchy and mean. But you never know.

                  I’m afraid that the lecture notes aren’t all that exciting as they take the gain out of risk aversion.

                  A nuance: in these models, risk aversion only accounts for the marginal difference between the actuarally fair value and the insurer acceptable premium. So, depending on how bad the original policy was, a higher premium Obamacare policy might be welfare increasing even for fairly high levels if risk tolerance.

                  (Ie. assume that the expected monetary value of a catastrophic policy were 40% (60% medical loss) and the new policy (since effectively group) had a 90% expected value (and we’re not counting things like recessions). As long as the premium increase was less than the increase in expected value, then, by these models, the person is strictly better off. They may not prefer this state, of course, at least ocurrently. But there’s no need to invoke their loss aversion per se. This seems to be both a strength and a weakness of these models. We do care about the sticker price. But we also have factors like loss aversion which make us grumpy about shifts from disposable income to risk mitigation. So, in the above case, the person might have been fine with an Obamacare policy if they had it from the start. But they “have insurance” at a cheaper sticker price so the move feels like a loss. (Not to mention acclimation.)

                  Of course, this sort if argument is a nonstarter as public relations.$

  • Jordan

    Just wait till you get an invite. He wins over all the bloggers in person.

    • Scott Lemieux

      What makes you think I haven’t?

      • Manju

        Well, for one…Ann Althouse hasn’t commented on your breasts.

        • Hogan

          BAM! Internet traditions gone wild!

  • Derelict

    I’m one of the people who will lose my present insurance under ACA. The Blue Cross group providing individual insurance in my state is disbanded under the law, forcing people like me to go shop for a replacement policy on the exchange.

    My present policy has a $510/month premium and a $500 deductible. The best available plan I’ve found on the exchange has a $495/month premium with a $1,250 direct-care deductible, a $750 drug deductible, less-than-full coverage (something like 80%) up to $20,000 and a declining scale up to some other unspecified number.

    Obviously, all of this leaves me MUCH worse off than before. My previously excellent coverage is going away, and my potential out-of-pocket costs will quintuple or more (but I do save $15/month on my premium!) While I’m not happy about this, I’m not screaming in the streets for ACA to be repealed. I figure it’s part of the dust settling, and maybe–just maybe–someone someday will ask the magic question: “What, exactly, does a health insurance company do other than stand between patient and doctor in order to rake off unearned fees?”

    • “… someone someday will ask the magic question: “What, exactly, does a health insurance company do other than stand between patient and doctor in order to rake off unearned fees?””

      It negotiates lower rates from medical providers preventing them from totally ripping you off. As you can see from all the sad stories about what people without an insurance company to protect them get charged.

      • Barbosa-san

        It negotiates lower rates from medical providers preventing them from totally ripping you off.

        A function which could be performed just as well and much more cheaply by the government, had the Republican Congress not passed a law forbidding them from doing so.

    • Jonas

      Since you are claiming that this is good insurance, why exactly is it no longer being offered? I’m genuinely curious.

      • panda

        There are two types of plans being rescinded: what we all understand as junk insurance, and plans that are really good at cherry picking healthy people. Insurance companies could adjust those plans rather easily, but they have no reason to do so when they lose the ability to cherry pick healthy people. Based on details he provided, Derelict belongs to the (relativly) small group of people who really is a loser from the bill. Not knowing him/her at all, I’d wager a bet that he is in his fifties, healthy, non-smoker and makes enough money to not to be eligible for subsidies.

        • stepped pyramids

          That doesn’t sound like “disbanding under the law” to me.

          • panda

            Grandfathering a plan is only possible if no changes were made to it between 2010 and now. How hard it is for an insurance company to make a minor change to a plan so that it becomes ineligible?

            • panda

              Another option is that the insurcan company decided to simply leave the private insurance market in a given state, citing the ACA as a reason.

  • “What, exactly, does a health insurance company do other than stand between patient and doctor in order to rake off unearned fees?”

    Here’s an idea — just to throw it out there. Why not fund US healthcare out of general taxation, and make it free at the point of use? Taxes might have to go up a little, but not by so much as $500 a month.

    I know, crazy. Crazy! It would cost trillions. To be realistic, it’s simply wouldn’t be possible for the US Govt to throw trillions of dollars at a project, not matter how dear to its heart it might be.

    • Hogan

      Money the government spends helping people is the only money that counts toward the deficit and the national debt. Money the government spends hurting people is magic money, so it doesn’t count.

    • ajay

      Here’s an idea — just to throw it out there. Why not fund US healthcare out of general taxation, and make it free at the point of use? Taxes might have to go up a little, but not by so much as $500 a month.

      Not by very much at all. IIRC, if you take the per-capita cost of the free-at-the-point-of-use British National Health Service, and multiply that by the population of the US, you get a figure that is slightly more than the US federal government currently spends on healthcare – i.e. Medicare, Medicaid, the VA, and medical cover for federal employees.

      $3,433 per person (PPP) x 313.9 million Americans = $1.079 trillion for the American National Health Service.
      Medicare and Medicaid: $802 billion.
      VA: $153 billion.
      Federal Employees’ Health Benefits: $40 billion.
      Military health care budget: $49 billion.
      Total: $1.044 trillion.

      If you can scrape up another $35 billion, you could cover everyone else in the country.

      • Davis X. Machina

        This is why every conservative (Blair) and Conservative UK government for the last 40 years has had its heart set on dismantling the NHS, always with the proviso that it can’t look like you’re dismantling it, or say that you’re dismantling it.

        The NHS just doesn’t make the right people rich enough.

        They’re in the process of blowing up their post-secondary education system with this goal in mind.

      • Sebastian H

        You’re drawing an odd conclusion from those figures. Your numbers, which I believe are correct, show that the US government ALREADY spends about as much on health care (per person) as the UK. The question, which is not sarcastic, is: why in the US is that only enough to cover about 1/4 of the US population? I specifically am not accusing the government of being particularly inefficient–private insurance spends as much AGAIN per person as the UK uses to cover everyone, and private insurance only cover about 2/3rds of the population, and that excludes the oldest group (they are on Medicare for the most part). So between the federal government spending as much as the UK uses to cover everyone PLUS the private sector spending as much as the UK uses to cover everyone, we already spend twice as much, and don’t even cover everyone. That is a giant private/public clusterfuck that isn’t easily going away through simple hand waving. I’m pretty sure I’ve never heard a good explanation that gets at both halves of that equation. (For example conservatives want to talk about government inefficiencies, but that doesn’t explain how private insurance can cover only 2/3 of the population excluding most of the oldest people for the cost that other countries cover everyone, but liberals want to talk about the inefficiency of insurance company profit which doesn’t explain how the federal government which doesn’t run a profit already spends almost enough for 100% care for everyone , but actually covers only about 25% of the population )

        My numbers are thumbnail, but firmly in the ballpark. And that’s troubling.

        • sibusisodan

          The Incidental Economist covers this in nice detail.

          Short version: there is no short version.

          • That was a super awesome read. Thanks s ton for the link.

  • Gregor Sansa

    Clinton’s stance may be bad strategy, in that it could be an ingredient in some horrible legislative sausage. However, it could be perfectly good. Landrieu’s “grandfathering fix” bill is unobjectionable; you are guaranteed to keep your old policy as long as:

    * You keep up-to-date on premiums

    * Your insurer doesn’t go bankrupt

    * They send you an annual notice which states (in plain English) specifically why your plan would be illegal as a new plan under Obamacare (ie, why it sucks), and tells you how you could get a new Obamacare plan.

    That’s fair; basically, a small and shrinking number of people would be grandfathered in.

    Should Clinton have stayed on-message here? Meh; if I were Obama I’d be mad at him, but I’ve learned not to care too much about sentences that start “If I were Obama” because I’m not.

    • witless chum

      Seems decent. If nothing else, it’d be good politics because the House would never pass it.

      • Gregor Sansa

        By that logic, anything is good politics.

    • joe from Lowell

      There is another angle by which Democrats embracing that bill would be good politics: it can set up further, more liberal changes down the road.

      Right now, we’re in a position in which support for health care reform is defined as defending Obamacare, and changing Obamacare is defined as a right-wing project.

      But eventually, we’re going to have to go back and make federal health care policy more liberal. I may not have chosen this particular moment to go from the defense to the offense, but the Democrats have to take circumstances into account.

      That doesn’t mean that this grandfathering tweak is a liberal policy, but that Democrats could get behind as a wonky reform, and set themselves up as Mr. Fix It, an identity that can only serve to help any future pushes to enact truly liberal reforms.

      • Armando

        What Joe Said.

      • Yeah, the only thing that has me cautiously optimistic about the senate shit right now is that one of my senators (Merkley) co-sponsored it and has been pretty progressive (for a senator). I’m hoping he’s trying to reverse all the talk of Obamacare being “ha ha look how fucked up it is” and focus back on the fact that the other side would rather we didn’t have anything at all. I don’t have a lot of hope, but there’s a little there.

        Then again, he’s running for reelection next year so he could just be another cynical politician that’s taking a fucked up position for personal gain.

    • GoDeep

      I don’t think this is economic.

      Since the law allows ppl to keep their policies as long as the insurer doesn’t change them then, presumably, the cancellation of these policies is proof the insurers don’t want to keep them.

      In the status quo ante young, healthy ppl got cheap policies b/cs they were young & healthy. In the current status quo, those young & healthy ppl must be in the new risk pool to keep prices down for old & sick ppl.

      If Landrieu’s law allows ppl to keep their old polices at their old prices then we’ve just pulled money out of the system that’s needed to care for older, sicker ppl. Am I missing something here?

      • Gregor Sansa

        You’re right, in some cases. Healthy people currently getting a better-than-Obamacare deal would be allowed to keep doing so, and that would mean less money in the system. But this is a second-order effect (because on the first order, at least they’re paying for insurance), and one which over time will disappear (as the small subset of grandfathered people disappears over time for one or another reason; less healthy, fall behind on premiums, or insurance company goes bankrupt). So it’s not ideal economically, but it’s certainly tolerable; it’s not a kind of adverse selection that could snowball.

        • GoDeep

          Well, no, its a first order impact.

          We’re only talking abt the set of ppl who are already insured (so there’s no “at least they’re paying for insurance” to this). This amounts to legally sanctioned moral hazard.

          When you let the young & healthy & currently insured re-create their own risk pool, you’ve just let the young, healthy, and currently insured game the system. They get the expanded protections of Ocare without paying the higher price.

          Simultaneously you’ve just increased costs–hence prices–on the older, sicker risk pool. Its actually the young, healthy, and currently insured you most need, b/cs many of the simply young & healthy won’t join the system in 2014 & will simply pay the $100 fine.

  • snoey

    >They were the winners in the current system, as long as they stayed healthy

    Which means that they all will be losers.

  • I’m sure the Republicans forced Clinton to do this too.

  • Bob

    I’m a 55 year old man who has carried full coverage my entire adult life and frankly, I am sick to death of the whining assholes demanding their “right” to have crap insurance. This is a civilized country so when the grossly underinsured get in a bad car wreck and need $10,000,000.00 worth of medical care and their insurer bids farewell at the $1,000,000.00 mark they still get the care they need. Where does the money come from? All those chumps like me who carry full coverage.
    Here’s the bill that should be passed. You have the freedom (Wolverines!!!) to go with an ACA approved policy or not, but if you opt out and intentionally underinsure yourself no hospital or doctor is legally required to offer any assistance.
    Need expensive life saving medical intervention and don’t have a good enough policy to cover the costs? Either write a check or leave the hospital.
    I’ve covered your costs long enough. You want freedom? You got it. But as my parents taught me by my 12th birthday when you demand the freedom act you have to accept the consequences of your actions.

    • Malaclypse

      Need [Your child needs] expensive life saving medical intervention and [you] don’t have a good enough policy to cover the costs? Either write a check or leave the hospital.

      Changed to show the decision as it will actually play out.

    • joe from Lowell

      Either write a check or leave the hospital.

      What Mal said, plus…that’s a completely empty threat. The hospital will not refuse treatment, and the government will not let the hospitals go under.

      • Bob

        I wasn’t actually saying such a law would pass. I was pointing out the grotesque hypocrisy of wingnuts defending that subset of those currently uninsured or underinsured by choice. Young, healthy people intentionally gaming the system – in essence gambling with house money. If they bet right, they pocket the savings. If they bet wrong, all of us with full coverage pay for the care they will – by law – receive.
        If the right wants to keep presenting itself as the party of personal responsibility they need to stop helping such people screw the rest of us.

  • TribalistMeathead

    I originally read about this on TNR, and I have to say, elitist as the concept was, the comments section was a lot more bearable when you had to be a subscriber to comment (anyone could read the comments).

    • Walter

      I really think you just need stringent anti-trolling and anti-“trollslayer” policies – the latter might actually be more important. The primary reason Drum’s comments section is so insufferable is that 12 or so regulars respond to every conservative comment, trollish or not, with guns blazing. It could be like the old Yglesias comments section, or this one, which I think were/are great (although the pancakes schtick is about as fresh as an Adam Sandler flick at this point).

      • TribalistMeathead

        TNC is pretty good about this, though apparently at some point he had to deputize a regular to help him.

  • Sebastian H

    It’s pretty obvious that Mr. Clinton thinks throwing Obama under the bus on health care improves the chances of him becoming the first husband. I can’t imagine how that will be good for health care, and I can’t imagine how that will be good for the Democratic Party, and I can’t imagine how it will be good for the country. But this is how the Clinton’s have always operated, so you are going in with your eyes open if you push for a Hillary Clinton presidency.

    • TribalistMeathead

      Let’s not forget all the damning-Obama-with-faint-praise during the 2008 election cycle.

      • Ed

        Let’s not forget all the damning-Obama-with-faint-praise during the 2008 election cycle.

        And let’s not forget the kick-ass speech at the last Democratic convention that made the case for Obama better than Obama was able to do for himself. Political self-interest was involved, just as it was here. Welcome to the NFL.

        That said, I see no reason for him to wade into this now, given the Administration is already reeling from damage,of it self-inflicted.

        Obama was wrong to make claims about the ability of individuals to keep their insurance that were literally false.

        Yup.

        There’s also the problem that dumping on the insurance industry is harder to do purely from a political standpoint since the government is now in effect working with them and now may have to ask them for help with a colossal government screwup. Not impossible, but harder.

    • joe from Lowell

      It’s pretty obvious that Mr. Clinton thinks throwing Obama under the bus on health care improves the chances of him becoming the first husband.

      Bill Clinton is too smart about politics to think that. Hillary isn’t going to be running against Obama, so there is no value in tearing him down. However, damaging Obama can damage the Democratic brand, which harms Hillary’s chances.

      I think this is Bill trying to show that he’s the Big Dog, not political strategery at all.

  • Steve S.

    Really, no.

    Too late. Everybody’s in full CYA mode now.

    • Tucker

      My opinion of Obama is decreasing but I still have to consider the alternatives.

  • Solar Hero

    Even when the only slimier neoliberal than Obama — Bill Clinton — starts to show some true empathy with people hurt by these policies, you still throw all-in with Obama. Are you in love with him?

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