A Health Plan for Rugged Individualists

A Health Plan for Rugged Individualists

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In his “The Great American Health Care Divide,” Brad DeLong laments the great ideological divide that has so long prevented this great country from developing a coherent national health policy.

I am glad to have Brad’s company, because I have whined about the same divide for several decades now, as evidenced by my “Turning Our Gaze from Bread and Circus Games,” penned in 1995 and “Is there hope for the uninsured?

Finally, after a nice visit with my friends at the Cato Institute and reading the often amazing commentary on John Goodman’s NCPA blog , I was moved to pen a post on The New York Times blog Economix entitled “Social Solidarity vs. Rugged Individualism.” It was inspired by the often hysterical description of the Affordable Care Act (ACA) as a government takeover of U.S. health care or a trampling on the freedom of Americans, as in mandating individuals to have minimally adequate health insurance, lest they become freeloaders on the system.

The basic idea of my proposal is simple.

In 2009, Paul Starr had warned Democrats of a potential voter backlash against the individual mandate and proposed instead a nudging arrangement. Uninsured Americans would be auto-enrolled into health plan, if they chose not to select one, but could opt out of it with the proviso that for the next five years they could then not buy insurance through the insurance exchanges established by the ACA at community-rated premiums, and potentially with federal subsidies.

My proposal is to make that a lifetime exclusion. An individual would have to choose one or the other system by age 25. Should individuals opting out fall seriously ill and not have the means to pay for their care, we would not let them die, of course, but to the extent possible we would cover their full bill – possibly at charges — by expropriating any assets they might have and garnishing any income above the federal poverty level they subsequently might earn. Something like that.

As Jay Gaskill’s somewhat opaque reaction in “RUGGED INDIVIDUALLISM is NOT the Essential Value of Freedom” suggests, people who oppose the ACA as trampling on their freedom are not comfortable with my prescription, which does not at all surprise me.


Frankly, I was only calling the self-styled rugged individualist’s partisan bluff, knowing how much they actually cherish their or their parents’ Medicare and the other many handouts – farm subsidies prominently among them – that rugged individualists enjoy. The New York Times had a splendid article on that issue about a year ago (see here and here).

As Dean Baker noted, there are actually very few rugged individualists in America (my back-of-the-envelope estimate is three). Most self-proclaimed rugged individualists do tend to rediscover government’s beneficial side when the going gets tough.

When you Google “rugged American individualist – images,” you will come upon the image below.

One can see these freedom riders on heavy bikes in the Colorado mountains, T-shirts fluttering in the wind, and bandanas as a head protection. Some of them might be uninsured, because the opportunity cost of health insurance would have been the very bike they are riding.

It is a safe bet, though, that even the most rugged uninsured individualists among them would expect a helicopter from Denver to pick them up and fly them to Denver, should they take a severe spill in the mountains. They would expect the finest health care Denver can offer, even if they had no means to pay for either helicopter or health care. It would be presumed that America has a moral obligation to extend them this civic nicety.

And I have only hinted here at farmers and not even mentioned bankers.

Uwe Reinhardt is recognized as one of the nation’s leading authorities on health care economics and the James Madison Professor of Political Economy at Princeton University. He is a regular contributor to The New York Times Economix Blog.

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35 Comments on "A Health Plan for Rugged Individualists"


Guest
Aug 5, 2013

This failure to follow logic has flummoxed me for decades: I want to drown government in the bathtub, but not the part that gives me the stuff I like. Oh, and once I’ve drowned that bad government baby in the bathtub, I wanna throw that baby right out with that bathwater. Oh, except for farm subsidies, and 365-day tax holidays for big banks and the Fortune 100.

This is the nugget: “It is a safe bet, though, that even the most rugged uninsured individualists among them would expect a helicopter from Denver to pick them up and fly them to Denver, should they take a severe spill in the mountains. They would expect the finest health care Denver can offer, even if they had no means to pay for either helicopter or health care.” Yep, they would expect that. ‘Merika!

Guest
Aug 5, 2013

Ding, Ding, Ding, we have a winner!
__

“only calling the self-styled rugged individualist’s partisan bluff, knowing how much they actually cherish … their parents’ Medicare”
__

And, we KNOW why they love it. Socializes the cost of the crushingly expense of inevitable acute, LTC, and/or end of life care for those parents, leaving way more behind in the estates for The Rugged Individualists to distribute (Death Tax-free, of course).

I just finished not too long ago cutting more than $300k worth of private-payer LTC checks for my late Ma, as her POA. Wasn’t much left in the estate after she died. The attorney who did the Guardianship for me on my disabled WWII vet dementia-addled now late Pop tried to get me to “explore legal avenues for asset protection” — meaning foist off the nursing home care on the taxpayers, basically. So you can inherit more (minus, of course, the $300/hr cost of the lawyer for artfully setting things up).

I just gave her the “Talk To The Hand. Not Goin’ There” cutoff response.

Guest
Aug 5, 2013

I’ve struggled with this issue for decades and there’ve been times when I was not even willing to be as generous as Reinhardt. And this is not merely because I was cranky. The injuries of the victim of the impending motorcycle crash in his article may cost much more than a helicopter ride and a hospital stay. Indeed, they may leave that “individualist” with no income at all for the rest of their days. Then what?

Guest
Gary Nakarado
Aug 5, 2013

Brilliant! Let’s do it!

Guest
platon20
Aug 5, 2013

Govt politicians will fold the very first minute that CNN runs a sob story about how some poor bloke “forgot” to buy insurance and suddenly gets hit with a catastrophic illness w/ uncontrolled medical bills.

In light of such sympathetic stories in the media, the outcome will be inevitable — govt will write “exceptions” into any mandate so that their constituents wont be punished.

This is ESPECIALLY true since Democrats are the ones writing the legislation on healthcare. Seriously, do you really see democrats telling their constituents that they are “out of luck” by failing to sign up for insurance?

I can nearly guarantee you that wont happen. The only politicians who tell people “tough luck” are republicans, and the republicans didnt write the healthcare law.

Guest
mpv24
Aug 5, 2013
Guest
Aug 5, 2013

Good one!

Guest
Aug 5, 2013

A great post. You have it exactly right. The only government programs “conservative” Americans want are the ones they personally benefit from. If they are old or have old parents this certainly includes Medicare. If their son impregnates a young poor girl it would include Medicaid OB care. If their bank fails, they will appreciate the FDC. Just not those benefits they don’t use.

Guest
Aug 6, 2013

Several years ago there was a debate in-print between Malcolm Gladwell and Adam Gopnik on national health insurance. (I think it was in Harper’s or The Atlantic)

Anyways, the point was made that in general, it is men who want heroic heli-copter rescues and are OK with large deductibles, whereas it is women who must visit doctors much more often and want first dollar coverage.

I am a faithful reader of health care blogs, both left and right wing, and with rare exceptions this sexual divide seems to hold true.

This divide is also a part of the ACA debate. The angriest opponents of a mandate are men, and the strongest supporters of free contraception and free preventive care are women.

The same pattern may hold sway in coming national elections. Let’s see.

Guest
Al
Aug 6, 2013

U.R.:”My proposal is to make that a lifetime exclusion. An individual would have to choose one or the other system by age 25.”

I think it is a great idea!

Let us create an insurance company called the Social Solidarity Insurance Company and anyone that wishes to join can become a member at age 25 and pay for this pooled care.

Ahhh, do I hear one saying ‘that is not what I meant?’

I think I do hear that squawking already because those that actually join the company will have to pay the piper directly no longer believing that the piper is paid by someone else.

( Pers: I am hoping to leave your grandchildren with a free society where they can prosper as well and take moon trips with their children to decide instead of being told what the moon is made of.)

Guest
Barry Carol
Aug 6, 2013

I don’t think liberals would ever agree to even a five year ban on buying health insurance for young people who opted out of the health insurance mandate. They would say it’s unfair to penalize them for being young and immature and irresponsible and for perceiving themselves (wrongly) as invincible. Their hearts bleed too easily and they’re too quick to want to spend other people’s money to make themselves feel good and righteous about their claimed belief in fairness and social justice.

As for the broader issue of people wanting government programs that benefit them and their family but favor getting rid of other programs, I go back to something I’ve suggested numerous times before. Invite every large interest group to a summit to find ways to cut the federal budget deficit. The only rule is that each group can only recommend program cuts or tax increases that directly affect them. I’m tired of hearing people say cut spending but not my program or raise taxes but not those that I would have to pay. The greed and hypocrisy are stunning.

Guest
Aug 6, 2013

Barry, you seem to be missing the point here. It is precisely those rugged individualists, not liberals, who want to spend other people’s money. They don’t want to buy insurance, but they expect to be taken care of when they crash their bikes. Buying insurance is spending your own money.

Guest
Dr. Rick Lippin
Aug 6, 2013

Thanks Dr. Reinhardt,

Brilliant – I’m for it -But Uwe- this isn’t a “civic nicity” – It is a moral obligation of any nation that calls itself a civil society.

The US has not yet achieved that preferred status :(

Dr.Rick Lippin
Southampton,Pa

Guest
tomintexas
Aug 6, 2013

I have not always agreed with this author, but this time, he nailed it.

Guest
Peter1
Aug 6, 2013

I lived in Alaska for about 5 years – place is full of self described “rugged individualists. The joke is though that the anti-guvment type vent their worst as they walk to the mailbox to collect their guvment check.

“but to the extent possible we would cover their full bill – possibly at charges — by expropriating any assets they might have and garnishing any income above the federal poverty level they subsequently might earn.”

One question on the above Uwe, since we have the most expensive system in the world how would you arrive at the “appropriate” charges? The mandate forces us to buy the Cadillac in the high priced rental district.

If everyone spent their fun money on health insurance the economy might wake up and get those prices down.

Guest
Tom Leith
Aug 6, 2013

The Rugged Individualist would surely agree that any charges the hospital and docs care to make is “appropriate”, or at least not to be questioned by the gubmint.

A better question I think is how we arrive at the federal poverty level.

Guest
Barry Carol
Aug 6, 2013

While I would support denying people the chance to buy health insurance later if they don’t buy it when they are first eligible for it, I don’t think such a bill could ever get through Congress for the reasons I explained in my last comment.

One alternative approach might be to require those who didn’t buy the insurance initially to prove insurability if they want it later. That means they would need to pass medical underwriting unless they could qualify under a legitimate exception like losing employer coverage or coverage under a spouse’s plan or aging out of coverage under a parent’s plan. This is the way Medicare supplemental and most large employer health insurance plans work. Guaranteed issue cannot work unless there is a mandate to buy insurance coupled with a substantial penalty if you don’t buy it. Otherwise, the pool will be dominated by sick people and insurance will be too expensive for most people to afford and you wind up with an adverse selection driven death spiral.

Guest
Aug 6, 2013

Because the ACa tries to solve all health care issues through private insurance, albeit with subsidies, we have all become a little fixated on how to persuade or compel everyone to buy private insurance.

There is another solution, as follows:

– Treat emergency medicine as a public service, not unlike fire and police departments.

And pay for emergency care with taxes, not backbreaking user fees or backbreaking insurance policies that are needed to cover the user fees.

Every individual and every employer in the country would pay 1% of income, or whatever, and the money would go to emergency facilities.
Whether the money goes fee-for-service or in a global budget is very important, but not something to work out in one brief post.There is also an issue of how to pay for people who are uninsured when they come into the ER and are then admitted to the hospital.

Any form of taxes is less precise than user fees. I say, so what? Some of the people who need to call the fire department have caused their own fire by carelessness. We can live with this. Imagine the chaos if each of us had to sign a contract with competing local fire departments. As a whole we benefit for a certain degree of imprecision.

Bob Hertz, The Health Care Crusade

Guest
Aug 6, 2013

Far too sensible. 😉