Noneconomist’s View
May 26, 2011 9 Comments
Mark Thoma continues to stake his claim to being, in my book, the internet’s dumbest economist by linking approvingly to a post entitled More Solid Proof That Obamacare Is Working.
What do they mean by “working”?
They mean this: 18-26 year olds are going on their parents’ employer-provided health plans as ‘dependents’. You know, as the law forces insurers to allow.
This is a very strange and, I hasten to add, economically ignorant of what it means for something to be “working”. First of all I was unaware that the sole purpose of Obamacare was to increase the number of 18-26 year olds being on their parents’ health plans, that this was somehow a huge problem, or certainly that this was the metric by which Obamacare’s success would be measured. But even aside from that, there is no sign of any cost-benefit analysis anywhere in the thinking of this “economist”. Using such criteria, any law that forces everyone to do X is “working” as long as the number of people who do X increases. But I’m entitled to ask: so what?
Suppose there were a law forcing all employers to give all their full-time employees state-of-the-art $25k jacuzzis. What would happen?
First, some employers wouldn’t, and/or would simply cut back their work force. Some employers would probably switch a bunch of employees over to ‘contract’ workers. There would be a new wave of outsourcing. Meanwhile, at least some employers of higher-salaried folks would probably just bite the bullet and go ahead and purchase jacuzzis for their employees (and, in return, recoup some or all of it from salaries).
But, disregarding all of the other effects, it is clear that jacuzzi ownership would go up, at least a little, and so I can only assume that Mark Thoma, brilliant economist, would write on his brilliant blog the “Economist’s View” that the law is “working”.
Left unconsidered in such a conclusion, of course, are questions such as: Was trying to forcibly increase jacuzzi ownership a good idea? What are the costs and side effects of having done so? Is it actually worth those costs? You know, important questions. Cost-benefit considerations. Stuff like that. Stuff that an economist might actually be interested in.
Silly me. Mark Thoma is not an economist. At least, he evidently doesn’t play one on his misnomered blog.
You know, I’m of the following mind: if insurance companies don’t like the law of the land where they operate, they can pack up shop and go home. Nobody will miss their parasitic middleman usurous asses. In short time, medical fees will become more sane as the protectionist racket shuts down.
I’m of two minds on your comment.
One, if ‘nobody [would] miss’ insurance companies, then why are people going around obsessing over whether 18-26 year olds – or anyone else for that matter – have contracts…with insurance companies? and painting it as some sort of victory when such contracts/arrangements exist with these companies? Clearly insurance companies seem to be important in the dreams and aspirations of a lot of people, most especially, the type of people who support Obamacare, wanted ‘health care reform’, complain and whine about our health care ‘system’, etc etc etc.
Do you care about/want people to have ‘insurance’ or don’t you?
On the other hand, what we call ‘insurance’ nowadays is primarily nothing of the sort. Insurance would be a useful concept/service because it involves spreading risk and covering uncertainty (and it would be sheer idiocy to claim ‘nobody would miss’ it).
That is not (primarily) what modern-day ‘insurance’ is about though. True insurance wouldn’t ‘cover’ any portion of a regular doctor visit for example. A regular doctor visit is not an unexpected risky event hence needs no ‘insuring’. Ditto for much if not most of what is ‘covered’ in peoples’ ‘health plans’. So in a weird sense, I agree with you that I wouldn’t miss that sort of ‘insurance’ (‘health plans’, or really, ‘opaque and complicated payment plans for predictable services’) if it were gone.
But of course, the only real reason our ‘insurance’ is like that is because the government has forced it to be, primarily because of the agitations of people with views like yours. Which makes it all the more perplexing for you to turn around say you ‘wouldn’t miss’ these companies onto which you and your political faction have pinned their long-dreamt-of economically-fascist health policies.
We believe everybody should be insured, and celebrate when more people are insured, because we’ve been raised with insurance companies and have trouble imagining the world without them. IF it is accepted as axiomatic that insurance companies exist in their current form (from which it is a corollary that one cannot reasonably be expected to pay out of pocket, since “current form” means “protectionist racket”), THEN yes, it is better for children to be insured (in a lesser-of-two-evils sort of way). You and I both seem to be in agreement that this is just treating-the-symptom, though.
I think the only place we differ is in our diagnosis of who is running the protectionist racket. I think it’s the government. What is a ‘mandate’ after all?
I only have trouble imagining the world without insurance companies in the same sense that I have trouble imagining the world without food markets. People DO want some sort of insurance, so (at least in a free country) insurance companies will exist to meet that need. It’s not like they have been artificially invented or forced upon us.
What HAS been artificial and forced is the ROLE that they play and the extent to which we interact with and rely upon them. The government has incentivized our employers (via tax policy) to pay us partially in Health Plan rather than money. The government dictates what Health Plans must and must not cover, and for how much. The government has socialized the health market for everyone over 65, and issues ‘schedules’ of what will be paid for this or that procedure. This all distorts the health care market hugely.
And no, I don’t have trouble imagining the world without this intruding, meddling and fascism. I would like things much better without any of it. Because then there would just be (actual) insurance companies, who would offer (actual) insurance, to people who wanted it.
But in order for that situation to be sustainable, we would have to have certain laws such as: insurance companies cannot lobby congress (otherwise, the tax incentives for employee insurance will arise); insurance companies cannot make special deals with doctors (otherwise, protectionism will arise). It’s not an either-or between government and free market. The free market HAD its way, and its way was to twist the government’s arm into doing what it’s done.
If Congress stayed within its actual Constitution powers I wouldn’t care who ‘lobbied’ it. Why would you need to control or limit who could ‘lobby’ them.
I don’t believe the tax incentive for health plans came about due to insurance lobbying. My understanding is it came about due to government wage controls. But, I could be wrong (it could be both).
Why don’t you want insurance companies to make special deals with doctors? That is part of what Obamacare (or any similar government reform) is.
Another thing. It’s not insurance companies who ‘don’t like’ these fascist economics. It’s me. I am not an insurance company.
Businesses do just fine under fascist economics. After all they become quasi-state instruments and intimately connected with the state. This comes with a lot of power, cozy relationships, ability to keep out competitors, etc. That is exactly what has happened and will only increasingly happen under our fascist health policies. We have effectively, over the years, commandeered health insurance companies as instruments of state policy.
Again, they are not the ones complaining about that. They will make out nicely. I’m the one complaining about it. If you wished to make an argument against what I’m saying, telling insurance companies to ‘pack up shop’ is a non sequitur of the highest order.
>Suppose there were a law forcing all employers to give all their full-time employees state-of-the-art $25k jacuzzis. What would happen?
OMG!!! That is such an awesome idea.
Somehow this thread got sidetracked. A lot of odd talk about insurance companies and lobbying. This idea of yours is pretty astonishing. I mean enough ppl want to go to America as it is but can you just imagine how America would be the envy of the world (and rightly so) were the government to mandate 25k Jacuzzis?
You know what? Taken together with minimum wage, it’d probably be only rich people who’d get a lower salary (which they wouldn’t notice anyway cause their salary is so damn high). The workforce might remain more or less the same (plus many more people working for jacuzzi companies). And people’s lifestyle (especially in the Bronx etc.) would go way up!
I didn’t think jacuzzis are great .. no big deal, boring.. but I was at a Hyatt hotel recently and their jacuzzi!!! Oh man! Mind you, that might be a 40k one.
I’ll vote you in as President if you run on that platform. Can’t understand why this topic was neglected on this thread.