Sunday, May 7, 2017

It's Only Money (Healthcare Edition)

Is there anything seriously wrong with either Obamacare or the GOP House bill that money couldn't cure?  What are the gripes about Obamacare?  It forces you to buy insurance you don't want.  Would a sufficient subsidy not cure that?  Insurance companies can't make money, so they withdraw from state exchanges.  Would a sufficient subsidy not cure that?

And the GOP bill that lets states set up high-risk pools for people who are very sick.  The Dems' only objection is that such funds have historically been underfunded.  Would a sufficient subsidy not cure that?

Topology fans - yes, there are topology fans - there must be - are fond of pointing to the torus - a solid object with a hole in it.  Like a bagel, or a teacup.  To the topologist, these are the same thing.  (How different is a meatball pizza from a cheeseburger, really?)  Well, any healthcare system that covers the poor and covers sick people after they get sick - when else would they be covered? - is going to be like any other at heart.  The risk has already been socialized, and the only question is whether there will be enough money delivered to providers to get them to deliver enough care.  Everything else is a detail.

Socialized benefits are paid for by taxes, broadly understood as an economic hit imposed to cover the cost of mutual benefits bought by the collective.  Buying insurance you don't want is a tax (just ask Justice Roberts), and inflation is a tax.  Price controls act as a tax.  Export tariffs on drugs sold at a higher price here than abroad impose a tax.  And, of course, explicit taxation is a tax.  But it's all the same to us topologists.  Everyone is getting healthcare, and, as a consequence, we are taxing whomever should be taxed, and in whatever way, as our politics determines.

I have my preferences regarding tax policy, but that's for another day.  For now, it's sufficient to note that any politically acceptable U.S. healthcare system post-Obama will require a lot of public money to pay for people who cannot afford the care they need.  Any legislative scheme that does not come up with that money will fail.  The murderers in Congress killed Obamacare by underfunding it.  The House Bill grossly underfunds the state pools without creating large enough subsidies to entice private companies.  Governors are in a bind: their constituents won't be able to buy coverage from insurers who are not there or afford coverage from pools that are underfunded.

No, the House Bill is not law, nor will it be.  But no new law will work unless it adequately subsidizes the cost of care.  Of course, that gives the government a big stake in cost control - e.g., the aforementioned export tariff on drugs sold to public health systems abroad - but that is a detail to be worked out.  The important thing is that no system that is underfunded can work.  Unfortunately, our pols don't much care whether a plan works; they just care who will get credit if it does, or - what may be a more valuable prize - blame if it doesn't.

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