A modest proposal for tweaking medical insurance coverage in a politically viable manner
You may remember a man named Rick Perry. While governor of Texas, he made a brief splash as the front-runner during the 2012 Republican presidential primary. He has been serving as President Trump’s Secretary of Energy since January, 2017.
At one of the televised debates, Mitt Romney, who happened to be worth a couple of hundred million dollars, challenged the veracity of something Perry had just said, offering to bet him $10,000. Perry declined the bet.
Romney's plan on medical insurance coverage
Why? Was he less confident than Romney as to who was right and who was wrong?
No, not at all! As many people watching the debate probably knew, you don’t get rich on the salary of the governor of Texas. Perry could hardly afford to lose a $10,000 bet – even though he was probably very sure that he was right.
That brings us to a basic tenet of the hottest new field of economics – that of the economic behaviorists. Almost everyone values something taken away from them more than the same thing given to them.
Suppose you are a panhandler begging for spare change. Someone hands you a five-dollar bill. That certainly makes you feel very good. When you get home, you realize that you have lost that five-dollar bill. Behavior economists would say that your sadness at losing the bill was greater than your joy of receiving it.
That brings us to the current debate over Medicare for all. Let’s begin with a basic fact: Our healthcare system costs almost twice per capita what it does in virtually every other rich country. In addition, from infant mortality to life expectancy, the healthcare outcomes are clearly better in most of these other countries.
So it should obviously be a no-brainer to switch from the hodge-podge of private insurance programs to Medicare for all. But tens of millions of American are quite happy with their current insurance coverage – whether it’s provided by their employers or if they pay for it themselves.
Medicare for all
So, you don’t even need to be a behavioral economist to figure out why there’s such strong opposition to creating a single-payer government-run healthcare insurance program.
Again, let’s look back at the last couple of years. President Donald Trump and nearly every Republican member of Congress has been bound and determined to abolish Obamacare, which had added tens of millions of Americans to Medicaid and to the private insurance rolls. And how would they replace Obamacare? The president indicated many times that they had “a great plan.”
As you’ll remember, they could never quite summon the number of votes they needed to abolish Obamacare. And in last year’s Congressional elections, the Democrats were able to regain control of the House.
How did they do it? Whether knowingly or not, they applied this basic tenet of behavioral economics: People value something being taken away from them more highly that something that’s given to them.
When Obamacare was initially enacted by slim Democratic majorities in both houses of Congress in 2010, the voters promptly put the Republicans back into control in that year’s election. Clearly, most of them didn’t value this new program. But eight years later, most voters were angry at the Republicans for trying to abolish Obamacare.
Today, some of the ten or twelve viable candidates running in the Democratic Primary are strongly supporting Medicare for all as our nation’s universal medical insurance program. But it should come as no surprise that so many Americans oppose this plan.
Why? As anyone with any common sense should realize, if so many other nations could provide better healthcare to all its citizens at half the cost, then it’s completely insane not to follow their lead.
So why can’t we all agree? Indeed, perhaps most of these same people initially opposed the introduction of Obamacare, and have since come to accept it – if not love it.
Well, you probably know where I’m going with this. They’re angry because they’re perfectly happy with their current insurance coverage. Why mess with a good thing by replacing it with something that may not be nearly as good?
We come back to the same reality that President Obama and the Congressional Democratic majorities encountered back in 2010 – many people did not highly value something that was being given to them. Similarly, at the current time, many Americans do not highly value being insured by Medicare for all.
But it gets much worse. Many of them absolutely hate being forced to switch from insurance programs that they like to one they might like a lot less.
So one might ask: Is there some middle way, some compromise that would be acceptable to most of those who want to keep their current medical insurance?
I think there is. Remember when President Obama famously promised that you could keep your current medical insurance if you wanted to? Well, regrettably, some people were unable to do this.
So, a way would need to be worked out that would provide an ironclad guarantee that not one person would be forced to give up his or her current insurance. Is that politically possible?
Conclusion on medical insurance coverage
Well, as many politicians have proclaimed, politics is the art of the possible. Perhaps the best possibility is to introduce Medicare for all as a completely voluntary program – a program that anyone at any age could voluntarily opt into.
On the downside, this would not immediately make our nation’s healthcare system much more efficient and less costly. Nor would we be providing universal healthcare.
But, given the vociferous opposition to radically altering a system that so many people like, maybe a partial change of medical insurance coverage is all that is politically possible at this time. And then, as more Americans realize how good the coverage is, they too will opt in. And then, increasingly, we shall begin to approach Medicare for almost all.