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The Horror, The Horror

31 Jul 2007 10:07 am

Michael Cannon offers us another horror story from the nightmare world of socialized medicine, a Guardian headline: "Woman, 108, Must Wait 18 Months for Hearing Aid".

Fortunately, here in the land of the free a 108 year-old woman has Medicare, not one of these big government boondoggle like they have across the pond. Oh, wait.

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Comments (46)

Instead of focusing on rebutting right wing wait time stories, perhaps we should let more people know about the horror story wait times in our present system, as young Neil did this weekend, which clearly would seem to trump theirs. Plus, since no one is proposing a National Health Service in the US, spending time defending it seems like work for the Brits themselves.

Plus, since no one is proposing a National Health Service in the US, spending time defending it seems like work for the Brits themselves.

I'll just note that our poor live longer, healthier lives than your rich, and move on...

Even more importantly, here, women on Medicare, regardless of their age don't have coverage for hearing aids. They have to pay for them themselves.

Fortunately, here in the land of the free a 108 year-old woman has Medicare, not one of these big government boondoggle like they have across the pond.

Isn't there a lifetime payout cap on Medicare (a million, I think?). It makes me wonder, are there old folks out there who exhaust the cap?

1) In 18 months she'll likely be dead. Yeah, making her wait - and having you laugh at it - very effective, very compassionate

2) Medicare and Medicaid (along with Social Security) are busy eating the budget alive - within a generation, there simply won't be room for discretionary spending (on anything) due to those programs - unless they get cut massively, or you raise taxes to economically devastating (and politically impossible) levels.

So great - let's bring the rest of medicine into the government, and ensure that discretionary funding ends a decade or so sooner. Great idea, Matt.

I was just getting ready to put up a link about the 50 year wait for cleft palate surgery, but I see that AJ was on it. But yeah, I think that story tops anything people on the right want to throw at us.

James, I'll bite--what is this economically devastating level of taxation needed to fund universal health insurance? As I survey the wastelands that used to be France, Holland and Canada, I want to be sure our nation never ends up like them.

"2) Medicare and Medicaid (along with Social Security) are busy eating the budget alive - within a generation, there simply won't be room for discretionary spending (on anything) due to those programs "

While in the private sector, doctors and insurance companies are now giving it away for free!

James, our country's military budget is $530 billion, and that doesn't including the $30 billion or so spent on nuclear weapons, and doesn't include the Iraq and Afghanistan wars, which is another $120 billion. So that is almost $700 billion, which is almost as much as the rest of the world combined.

Yet, for some reason, nobody ever says this insane military spending is "eating the budget alive". Nobody ever asks if this level of spending is sustainable or desirable. If the government wants to expand some social program by a nominal amount, it's always "irresponsible spending". If the government wants to blow up some nation or fund some boondoggle plane or warship, nobody ever calls it irresponsible or even asks how we are going to pay for it. Weird.

I'm quite sure that if NHS had simply denied her request outright, you'd have never heard a peep about this. It's the silliness of the 18-month wait, as applied to a 108-year old woman, that made this a story. Just another reason not to set policy by anecdote. Moreover, all this anecdote tells you is that large systems -- bureaucracies, if you will -- sometimes don't handle the individual case intelligently, something I think we knew already. So are folks like James Robertson above going to argue that our primary reliance on private health insurance has spared us from the horrors of bureaucracy? Well, James might, but I mean someone who's trying to make an honest argument?

That's because you can't put a price on freedom, Joshua!

Haha.

The military budget is discretionary spending - meaning that it can be easily controlled by Congress via simple voting. Medicare, Medicaid, Social Security - all are "pay as you go" non-discretionary programs funded by current tax receipts. Just look at demographics - there's a far larger proportion of older people drawing benefits now than there were even 2 years ago, and that ratio is not getting better - not with current birth and immigration levels.

Europe and Canada are feeling that pinch now - if you follow German policy, you'll notice that industry has been fleeing for years now - mostly to escape the kinds of social costs that Matt likes to pretend don't exist.

There's a tradeoff between a more market driven medical system and what Europe has. What they have leads to slower growth and less medical innovation, while at the same time giving wider medical access. You can argue in favor of that tradeoff, but what irritates me about the left is that it likes to pretend it's not a trade off.

You might have noticed that both England and Canada have recently started allowing private health insurance again. Why do you suppose that is? In fantasy-land, government run health care is perfect, and shouldn't require that.

In James' fantasy land the Social Security Trust fund doesn't exist. so you can see he's another of those steely eyed conservatives.

"I'll bite--what is this economically devastating level of taxation needed to fund universal health insurance?"

I have no idea what level of taxes would be required to fund "universal health insurance", but here's an idea of what will be required to merely fund Medicare, as limited as it is (in coverage; and by age, to those 65 and older):

According to Medicare Trustee Thomas R. Saving, a professor of economics at Texas A&M University and senior fellow at the National Center for Policy Analysis, the Medicare program is now projected to consume:

* 24 percent of all federal income taxes by 2019 and
* 51 percent of all federal income taxes by 2042.

Those numbers were relayed in a blog post written during the run-up to Bush's expansion of the Medicare entitlement in '04, so the estimates may have gone up since then. The salient point is that few politicians are being honest about how much it will cost to pay for Medicare in the near future; it's irresponsible to start proposing a vastly more expensive program without explaining how you'll pay for the current one.

By the time you're 108, you've heard it all anyway.

"In James' fantasy land the Social Security Trust fund doesn't exist."

There is a Social Security Trust Fund -- but the money is in Treasury bonds. Those Treasury bonds -- like all Treasury bonds -- are liabilities of the federal government, not assets. In other words, monies put into the Social Security Trust fund are being spent by the federal government now, and will need to be paid back later.

See if you can follow this, Rob. Treasury Bonds are loans, or IOUs made out by the federal government. If you own a Treasury bond, that is an asset to you, since the federal government is paying you interest and will pay you back your principle, or par value, at maturity (the bond's maturity, that is). To the federal government though, that Treasury bond is a liability, because the federal government has to pay Rob interest and give Rob his money back in the future.

James, England has always allowed private health insurance.

In fantasy-land, government run health care is perfect, and shouldn't require that.

And in the land of Oz, Dorothy James can dance to the Emerald City with her strawman.

Mr Robertson:
Regardless of how you fund healthcare those cost increases are going to happen (though I'm skeptical that they're anywhere as huge as you fear). So we're going to end up paying for healthcare come what may. (I assume at least you aren't advocating letting the poor die in the gutters, though I hear Calcutta and Port au Prince are nice if you like that kind of scenery.) That being the case, why shouldn't we do in a just and equitable and, yes, efficient manner? Besidse which, it's quite likely, I would even say probable, that the increase in our medical inflation will be slowed more than a little if we eliminate wasteful adminstrative costs and provdie more accessible early intervention and preventative medicine. The current system, is frequently penny wise and dollar foolish after all.

Fred's horror numbers above are from the "National Center for Policy Analysis." With a soothing, generic name like that, my immediate thought is, gotta be a right-wing think tank. And, sure enough (from NCPA's website):

"The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector."

What a shock, then, to see them come up with numbers that suggest that publicly financed health care will be an unmitigated disaster.

Oh, and to preempt the troll response accusing me of making an ad hominem argument, let me point out that neither Fred, NOR the blog post he linked to, NOR the Heritage Foundation "report" the blog post linked to, cited any authority for how those numbers were arrived at. Call me crazy, but when someone asks me to simply trust someone's numbers, I think knowing who that person is and what agenda they're working toward is pretty relevant.

Glenn,

If you're interested in where those numbers came from, see Thomas Saving's subsequent Senate Testimony, where goes into Medicare's financial trajectory in greater detail.

Now you can be a troll* and say that, because this Saving's Senate testimony is saved on an NCPA web page, that all the data in it is meaningless, or you can perhaps dig up a footnoted presentation from an expert who denies that Medicare costs are rapidly accelerating. Failing that, you might try to address my initial point, which is that it's irresponsible to start proposing radically more expensive health care policies before explaining how you intend to pay for the rising costs of our current government-funded health care programs.

*My first time tossing off that silly term at another commenter. Do I have the usage right -- "troll" = someone who disagrees with me?

I don't believe hearing aids are covered at all by most health plans in the U.S. You just pay for it in full. You would always have that option in Britain as well.

Next we'll be hearing stories about how those unfortunate Europeans have to wait for eyeglasses, which are covered under many European health systems, but of course are considered entirely a personal expense in the U.S. They don't have to wait - they can always just pay for it like we do. Or like we do , do without if you can't afford it.

This is a particularly silly example of the horrors of socialized medicine.

"if you follow German policy, you'll notice that industry has been fleeing for years now"

Not sure about the Germans, but industry has been fleeing the US for a while now (is there any left other than the military-industrial complex?). I'm sure it's because of all the taxes and socialism. Lately they've been all going to that paradise of unfettered unregulated fee laisez-faire capitalism also known as the Popular Republic of China.

JonF and Glenn have already hit the points I was going to make. But there's one more thing: all the people who will be retired and drawing Medicare in 2042 (including, God willing, me) are already part of the health care system. Granted, most are covered by private, employer-subsidized/provided insurance now, but that doesn't mean its free. Someone, somewhere is picking up the tab now for insuring these one-day retirees.

From the standpoint of the economy, does it matter whether the insurance bill is paid for by employers, general taxation or even individuals on their lonesome? Also, does economic analysis factor in things like the poorer quality of life and shorter lifespans one would see in a your-on-your-own system?

I was so struck by the recent article in the NYTimes about dangerous bacterial infections that people all too frequently get when in the hospital. The part of the health care sector that has made dramatic progress on this problem is...yes, you guessed it, the VA. Once again, government run health care beats out the private market. Indeed, the article noted that hospitals generally consider these types of infections simply "one of the costs of doing business" and have thus failed to implement the aggressive measures that are now working very well in the VA system.

Now Fred to make it easier for you, change the name Rob to the Social Security Trust Fund. Look! It owns assets and it receives interest!

I have no idea what level of taxes would be required to fund "universal health insurance", but here's an idea of what will be required to merely fund Medicare, as limited as it is (in coverage; and by age, to those 65 and older):

According to Medicare Trustee Thomas R. Saving, a professor of economics at Texas A&M University and senior fellow at the National Center for Policy Analysis, the Medicare program is now projected to consume:
* 24 percent of all federal income taxes by 2019 and
* 51 percent of all federal income taxes by 2042

You can't honestly extrapolate these numbers to universal health care, as the projections are biased by the top-heavy age spectrum in the following decades -- also, those dispropotionately fewer young folks are less of a fiscal burden per capita, making your numbers even more meaningless. As it is, if you think UHC would simply be an extension of the free-for-all that is Medicare, you're dreaming.

One of the screwy quirks of the US health care system is that while most medical care for the eldery is paid for by the federal Medicare system, nursing homes are paid for by states via Medicaid.

The patient has to spend down all their assets before they qualify for Medicaid (or their family games the system by transferring assets to kids ahead of time). Most state Medicaid programs cover hearing aids, so if the 108 year old was in a nursing home, its likely her hearing aid would be paid for. If Medicaid won't cover it, there are charitable organizations (such as the Lions Club) that pay for hearing aids.

Of course, if the 108 year old is still living on her own and wasn't on Medicaid, that's so unique that if her family contacted the hearing aid manufacturer they'd probably donate it and put the old battleaxe in a TV ad.

Talk about missing the trees for the forest -

She's 108 f*in' years old!! Seen many of those lately in the capitalist utopia of america?

Rob:

That's cute, but it elides the point that the Social Security Trust Fund's assets are the U.S. government's liabilities, so they are, from the perspective of us (Americans, tax payers), liabilities, not assets. If you aren't concerned by these liabilities -- and the far greater, unfunded liabilities of Medicare -- then you don't intend to discuss any of this seriously.

El Cruzado:

Industry, particularly, high-tech manufacturing, has been booming in America. See the recent NY Times article Catching a Wave of High-Tech Exports. All the more reason to take into account fiscal consequences of policy proposals.

Epicurean Quaker:

"You can't honestly extrapolate these numbers to universal health care"

Where did I extrapolate? I just said it would make sense to explain how to pay for this before proposing universal health care, which would add additional costs.

"As it is, if you think UHC would simply be an extension of the free-for-all that is Medicare, you're dreaming."

Do you know the limits of Medicare coverage? Plenty of costs aren't covered by Medicare, so that seniors need supplementary private insurance (or Medicaid, if they are poor) for full coverage. Presumably, "UHC" would cover more than Medicare -- if it didn't, everyone expecting "free" care would feel gypped when they got billed for deductibles, co-pays, and non-covered expenses.

For those of you open to other opinions, this essay may interest you:

A Canadian Doctor Describes How Socialized Medicine Doesn't Work

One point the author, Dr. Gratzer, makes is:

...if we measure a health care system by how well it serves its sick citizens, American medicine excels. Five-year cancer survival rates bear this out. For leukemia, the American survival rate is almost 50%; the European rate is just 35%. Esophageal carcinoma: 12% in the U.S., 6% in Europe. The survival rate for prostate cancer is 81.2% here, yet 61.7% in France and down to 44.3% in England — a striking variation.

Thanks, Dave. Sometimes when we're focussed on the health system on a whole, we spend too much time on such meaningless factors as life span, quality of life, and reported satisfaction with health care. It's important not to lose track of cherry-picked data, complete non-sequitors, and the all-powerful anecdote. When will we learn that if we don't shut up and blindly accept that the American health system is the best in the world, someone from the Manhattan Institute like Mr. Gratzer will show up and tell gross stories?

By the way, in further support of Dave's post, I once saw a movie about England where dead bodies were piled up everywhere! Obviously, their healthcare system is no good.

The name of the movie escapes me . . . 28 Days something or other. . . .

"According to Medicare Trustee Thomas R. Saving, a professor of economics at Texas A&M University and senior fellow at the National Center for Policy Analysis, the Medicare program is now projected to consume:

* 24 percent of all federal income taxes by 2019 and
* 51 percent of all federal income taxes by 2042."

Mark Twain, who was a keen observer of intelectual skullduggery, devoted an entire essay to projections based on extrapolating current trends.

For example, Missisipi (a river he was familiar with as a ship pilot) every years becomes a bit shorter as meanders are being cut short. Consequently, by the end of 3rd millenium suburbs of New Orleans will mesh with the suburbs of St. Louis (mind you, Twain was not familiar with suburban sprawl that can cause the same effect much faster). Conversely, before the last Ice age New Orleans was further from St. Louis than Earth is from the Moon.

I would love to extrapolate a number of recent trends. By 2050 corporate income will be larger than GNP, and the pay+bonus+benefits of chief corporate officers will be larger than corporate income. Consequently, we will be able to fund ALL government activities with income tax levied at the top 1000 personal incomes. Common folks will have no other source of income.

About cancer survival rate: in spite of the abysmal stats, Europeans live longer. Part of it is that they have fewer cancers, and in this some attribute to aggressive detection of early cancers in USA that catches many harmless conditions similar to cancer that in Europe are left undiagnosed and in USA boost the percentage of survivors. (Cancer-like conditions: if I understand, a proper cancer should metastate, which defines it as malignant, rather then benign, but if some tumor looks like it can become malignant in the future, we also call it cancer; some of the latter, especially in prostate, more often than not grow very slowly if at all).

Good points, jlw. Dr. Gratzer is clearly a wingnut grasping for irrelevancies such as how well a health care system treats sick people, and what their health care outcomes are.

Gratzer: Health care influences life expectancy, of course. But a life can end because of a murder, a fall or a car accident. Such factors aren't academic — homicide rates in the U.S. are much higher than in other countries.

In The Business of Health, Robert Ohsfeldt and John Schneider factor out intentional and unintentional injuries from life-expectancy statistics and find that Americans who don't die in car crashes or homicides outlive people in any other Western country.

This does not seem to be true. In particular, the French have much fewer murders, but quite a bit more suicides, and they seem to make proportionally more accidents. The aggregate number of accidental deaths is larger (per 100,000) in France than in USA, so I suspect that Ohsfeldt picked those that are more represented in USA as those that "matter".

I would not trust anything cited by a think-tanker.

According to the essay Dave linked to (if someone disputes these numbers, feel free to speak up), life expectancy in the U.S. lags that in France by 1.3 years. Might demographics and lifestyle have something to do with this? E.g., epidemic levels of obesity, particularly among our poor African American and Latino populations?

Fred -- Hispanics in America live longer than whites, due to their superior breeding and smarter culture.

That should have been "even 20 years ago", not "2 years ago".

Still adjusting to a new keyboard...

Wow, good thing sarcasm's not contagious, cos I can't afford health care here in the US of A!

Re: If you're interested in where those numbers came from, see Thomas Saving's subsequent Senate Testimony, where goes into Medicare's financial trajectory in greater detail.

So what? Anyone can go before the Senate and say any old thing they want. As long as they are not lying about current or past checkable facts they aren't going be guilty of perjury. Prognostications about the future are just opinions, and worth about two cents.
Now, back to my question: if you do believe those predictions, then you must also admit that there's no way to stop them from comibng to pass: those bills will exist and they will havet o bep aid, period. Unless you want to let people die in the streets, or call in Dr Kevorkian the moment any non-rich person turns 65. So tell, how do YOU propose we pay for healthcare for everyone in the future? Put up or shut up!

"So what? Anyone can go before the Senate and say any old thing they want."

Is this supposed to be a refutation of the projections, or are you conceding that Medicare costs are rapidly accelerating?

"Prognostications about the future are just opinions, and worth about two cents."

So any reports by the Medicare and Social Security Trustees, the Congressional Budget Office, etc., should be ignored?

"Unless you want to let people die in the streets, or call in Dr Kevorkian the moment any non-rich person turns 65."

Is it necessary to get so shrill and hysterical? When did I propose getting rid of Medicare or letting anyone die in the street?

"So tell, how do YOU propose we pay for healthcare for everyone in the future? Put up or shut up!"

For starters, I propose that we hold off on any radical plans for the government to pay for health care for "everyone", and instead first focus on how to pay for the programs we already have for the elderly and the poor (Medicare and Medicaid). How to pay those ever-increasing bills isn't rocket science: it requires either cost savings, tax increases, or a combination of both. One way to save costs on Medicare would be to phase in the eligibility age from 65 to 67, as we are already doing with Social Security. One way to raise taxes would be to simply raise the Medicare portion of the FICA payroll taxes.

To determine what level of cost savings, tax increases, or a combination thereof would be needed to stabilize the finances of Medicare and Medicaid, you'd need to deal with things some of you (JonF, piotr, etc.) seem to be allergic to: facts, cost projections, etc. I have yet to read a coherent argument from any of you as to why we shouldn't figure out how to pay for the rising costs of Medicare and Medicaid before taking on the larger cost of a universal health care program.

Fred, you still don't understand what everyone is saying. Please pay attention.

SOMEONE is going to have to pay for the healthcare of the US population in the future. It could be the government; it could be private insurance; it could be patients themselves. It will almost certainly be some combination of the three. But those bills are going to come due. The only alternative is the one you rightly recognise as ludicrous - of simply denying healthcare altogether and letting people die in the streets.

The US, in the sense of all its citizens, companies and institutions, is going to have to pay for universal health care - the US, in that sense, is paying for universal health care now.

The question is: how should this payment be arranged between the three categories I've mentioned - government, private insurance, and individuals - in order to assure the best overall result at the cheapest cost?

Well; any thoughts?

Posted by ajay | August 1, 2007 5:00 AM:"The question is: how should this payment be arranged between the three categories I've mentioned - government, private insurance, and individuals - in order to assure the best overall result at the cheapest cost?"

There are at least three important principles as far as I can see:

1. The poor should not be left behind if possible.

2. No monopoly of supplier. Everyone ought to have as much choice as possible.

3. There ought to be a cost to the consumer so that there is less needless waste.

With those three factors in mind, I suggest a simple scheme. The government ought to encourage everyone to put aside a sum of money every year in a special bank account, say $2000, by making it tax deductible. If they are too poor the Government ought to top it up. This money can only be spent on health care while the person is still working. Any left over they ought to be able to leave to their children. They have to meet all non-catastrophic health costs out of this money. The Federal government or better yet the States ought to provide catastrophic health care insurance for those costs that are beyond normal ability to pay. Young people are healthy. By the time they are 30 or so they ought to have a big fat bank account. More so if parents can pay in from birth. Because they are spending their own money they will spend it carefully. Administration costs ought to be low. There is no State-monopoly of supply.

Does this go a long way to meet everyone's objections to everything?

No, it's insane.

Of your three "important principles", 1 is unarguable (because it's largely meaningless). 2 doesn't seem obviously true - why should everyone have as much choice as possible? Would the benefits necessarily outweigh the downsides - viz. the probability of an uninformed or otherwise constrained patient making the wrong choice, and the expense of choice? And 3 presupposes that there is a lot of frivolous use of healthcare which needs to be discouraged - which isn't exactly obvious either, certainly not from the experience of systems like the NHS which are free at the point of use.

Your plan is also not practical. Say someone has saved up this money from as soon as it became practical - basically, when they started earning at age 17. By 30 they'll have $26,000 in their account. With interest, closer to $40,000. That won't go far in the event of a real medical emergency - say, cancer or traumatic amputation.

Ah, you say, but the state will top it up. Right.
So what you have is a system of universal state payment for healthcare, partially funded by savings, if they're there. This is a disincentive to save! If I've got $5000 left over at the end of the year, I could put it into my tax-free HeiGou Account - which means it'll only be available to me for healthcare expenses - or I can put it in my normal savings account. If I do the latter, then I'll have to pay tax on the interest (negligible), but I can spend the money on whatever I like, and the government will top up my HeiGou account anyway. Why, indeed, should I put anything at all into my HeiGou account?

What happens, conversely, if I've maxed out my HeiGou Account and still don't have enough for my non-catastrophic care? Because you've said that "They have to meet all non-catastrophic health costs out of this money". Can I then spend my own non-HeiGou savings? If so, why shouldn't I just put all my money into a non-HeiGou account, which will at least allow me to spend it on (for example) a house if I happen not to fall ill?

Your assumption that "administration costs will be low" is also not reasonable. Why should they be? You're postulating an entirely new bureaucracy to oversee the HeiGou Accounts and determine whether they need to be topped up, as well as existing health insurance and healthcare provider bureaucracies.

And, for some bizarre reason which I cannot follow at all, you stipulate that the money from the HeiGou Accounts can only be spent on healthcare when the account owner is working. "Any left over they should be able to leave to their children". Well, people don't just die immediately on retirement. Retirements are getting longer and longer as life expectancy rises, and it's in retirement when you need most healthcare spending. What happens to the money then? Is it just locked up until death, or automatically transferred to children - who won't need it as much as their retired parents anyway? What if you have no children?

Posted by ajay | August 1, 2007 10:48 AM :"No, it's insane."

Well I don't want to be rude, but considering where that is coming from, I feel proud.

Posted by ajay | August 1, 2007 10:48 AM:"Of your three "important principles", 1 is unarguable (because it's largely meaningless)."

It is neither unarguable or meaningless. Any number of health care systems leave the poor behind and contribute nothing whatsoever to their health funds. I don't have a huge problem with that, but in general I think it is reasonable to try to avoid it.

Posted by ajay | August 1, 2007 10:48 AM:"2 doesn't seem obviously true - why should everyone have as much choice as possible? Would the benefits necessarily outweigh the downsides - viz. the probability of an uninformed or otherwise constrained patient making the wrong choice, and the expense of choice?"

Because it avoids problems such as Canada and the UK have had of a de facto monopoly supplier not providing a service if it does not have to. Not to mention the appalling waste and incompetence of the NHS. Competition is good. Choice is good. These are axiomatic to me and I assume to most people. Why would this system guarantee a higher risk of uninformed choice? So what if they make the wrong choice if they are paying for it? The real risk here is that the monopoly supplier does not provide a service or provides the wrong one.

Posted by ajay | August 1, 2007 10:48 AM:"And 3 presupposes that there is a lot of frivolous use of healthcare which needs to be discouraged - which isn't exactly obvious either, certainly not from the experience of systems like the NHS which are free at the point of use."

Actually it is obvious. The French system for instance does not charge much for drugs and as a result the French massively over-consume drugs. The NHS does seem to suffer from massive over use in some areas - although the co-payment for drugs seemed to have worked to reduce drug use.

Posted by ajay | August 1, 2007 10:48 AM:"Your plan is also not practical. Say someone has saved up this money from as soon as it became practical - basically, when they started earning at age 17. By 30 they'll have $26,000 in their account. With interest, closer to $40,000. That won't go far in the event of a real medical emergency - say, cancer or traumatic amputation."

As I said, the State, or better yet the States, could provide catastrophic insurance - which is not expensive and is extremely unlikely to be over used and they have to anyway because of the need for Emergency care.

It is practical by the way.

Posted by ajay | August 1, 2007 10:48 AM:"So what you have is a system of universal state payment for healthcare, partially funded by savings, if they're there."

Well subsidies rather than payment, but basically yes. It is a way to save as much that is good about the American system without going over to the MHS model.

Posted by ajay | August 1, 2007 10:48 AM:"This is a disincentive to save! If I've got $5000 left over at the end of the year, I could put it into my tax-free HeiGou Account - which means it'll only be available to me for healthcare expenses - or I can put it in my normal savings account. If I do the latter, then I'll have to pay tax on the interest (negligible), but I can spend the money on whatever I like, and the government will top up my HeiGou account anyway. Why, indeed, should I put anything at all into my HeiGou account?"

They should only top it up if someone cannot afford to pay. Not if they choose not to. Your objection is reassuringly specious.

Posted by ajay | August 1, 2007 10:48 AM:"What happens, conversely, if I've maxed out my HeiGou Account and still don't have enough for my non-catastrophic care?"

Actually I don't see any necessity of providing an upper limit.

Posted by ajay | August 1, 2007 10:48 AM:"Your assumption that "administration costs will be low" is also not reasonable. Why should they be? You're postulating an entirely new bureaucracy to oversee the HeiGou Accounts and determine whether they need to be topped up, as well as existing health insurance and healthcare provider bureaucracies."

Except this is done routinely through the IRS anyway. It is not a new bureaucracy. It is hardly even that much extra work for them. Compare and contrast with the effort to refund my Great Aunt's sleep tablets.

Posted by ajay | August 1, 2007 10:48 AM:"And, for some bizarre reason which I cannot follow at all, you stipulate that the money from the HeiGou Accounts can only be spent on healthcare when the account owner is working. "Any left over they should be able to leave to their children". Well, people don't just die immediately on retirement. Retirements are getting longer and longer as life expectancy rises, and it's in retirement when you need most healthcare spending. What happens to the money then? Is it just locked up until death, or automatically transferred to children - who won't need it as much as their retired parents anyway? What if you have no children?"

I would assume they could will it to whoever they wanted. If it makes you happy I could change that to until they die. Does that make you happy? Sensible people think about their retirement and make sure they have enough money left over for it.


Comments closed August 14, 2007.

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