In the post above I quote Harvard professor of health policy and political analysis at Harvard’s Kennedy School of Government Bob Blendon as saying that voters perceive little difference between Obama and Clinton on healthcare reform. And I think he’s right. But that’s because most voters haven’t honed in on the fine points of their plans.
Those who have scrutinized the plans, and understand the economics of healthcare reform, see important differences—differences that could be deal-breakers.
In today’s New York Times, Princeton economist Paul Krugman argues that because Obama’s plan does not require everyone to sign up for insurance, it would be more expensive—and thus less likely to pass Congress. Without a mandate, Obama’s plan “would face the problem of healthy people who decide to take their chances or don’t sign up until they develop medical problems, thereby raising premiums for everyone else,” Krugman points out. He acknowledges that “Mr. Obama, contradicting his earlier assertions that affordability is the only bar to coverage, is now talking about penalizing those who delay signing up — but it’s not clear how this would work.”
Writing on The American Prospect today, economist Dean Baker from the Center for Economic and Policy Research responds to Krugman, saying that he knows how penalties would work:
“Obama has suggested that we can have a system of default enrollment, whereby people are signed up for a plan at their workplace.
“People would then have the option to say that they do not want insurance, so they are not being forced to buy it. However, they will then face a late enrollment penalty if they try to play the ‘healthy person’ game. When they do opt to join the system, at some future point, they will have to pay 50 percent more for their insurance, or some comparable penalty for trying to game the system. “
What Baker doesn’t say is what we will do with families who cannot afford to pay such stiff penalties when they finally decide they need insurance. Would we subsidize the penalties?