YOYO Health Care

Jared Bernstein of the Economic Policy Institute coined a phrase to describe economic life in the U.S. that is increasingly marked by job insecurity, savings substituted for pensions and a tattered safety net: You're On Your Own (YOYO) economics. This morning's news coverage of the General Motors-United Auto Workers settlement describes how YOYO economics is taking over health care -- the last bastion of employer-provided social insurance.

The Wall Street Journal's trend story describes how large employers are increasingly shifting their retiree benefits from comprehensive Medicare supplemental plans to individual payouts. This mirrors the Republican approach to universal health care for all workers and their families. We make a flat payment to the individual, and YOYO, You're On Your Own to buy policies in the individual market.

But, as the story points out, there are a few problems with that market:

Shifting people to the individual market is problematic . . . at least under the current set-up. It is difficult for people to understand what they're buying, and those with existing illnesses have trouble finding any coverage.

Indeed, the word that most health care economists and wonks use to describe the individual insurance market is "dysfunctional."

Sen. Ron Wyden (D-OR) last year introduced a comprehensive health care reform legislation that repeals the implicit tax break for employer provided health insurance (it's currently not taxed as wages), encourages employers to give the money to their workers, and requires individuals to go out and buy their own insurance plans. But to deal with the dysfunctional individual insurance market, Wyden called for a national regulation scheme for health insurers that would establish community rating for pricing individual policies (it pools risk by mandating that all policies within a geographic area carry the same price for the same level of benefits) and flat-out prohibits insurers from discriminating against potential customers because of previous health conditions, age, or their health status (except for smokers).

The GM-UAW settlement shows that employers are not going to be reliable allies in the push for universal health care. They will opt for any solution that insulates them from rising costs. No one should be surprised. They are not social enterprises in the business of providing benefits. They are in business to make money. That goes for the insurance companies who sell health plans.

So the great debate next year is going to be between those who want to "solve" the health insurance crisis by turning that portion of our lives into another version of YOYO economics and those that would rather see health like the public schools: a universal system that guarantees a basic set of benefits for every person no matter what their age, economic or health status. That doesn't necessarily mean single-payer a la Medicare for all. But it will take an awful lot of regulation to make the insurance industry deliver that result. The Democratic plans that leave current insurance policies intact (and all of them do except for Dennis Kucinich, who is backing single-payer) all rely on such regulations.

A great way to highlight the debate would be to put the issue of national regulation of the insurance industry squarely on the table. Congresspersons who want to guarantee universal coverage while keeping insurance companies in the game should introduce the community rating/no discrimination law now. Make the Republicans and whoever wants to push individual mandates and policies prove that they're willing to do what it will take to remove the word "dysfunctional" from the phrase "dysfunctional individual insurance market."

That debate in Congress next year would be a perfect complement to the debate that will be taking place on the campaign trail.

Posted by gooznews at September 27, 2007 08:27 AM