Gay Marriage to Be Legal in Iowa in Three Weeks

The Iowa Supreme Court ruled today that the state’s statute defining marriage as being between a man and a woman, “violates the equal protection clause of the Iowa Constitution.” As a result of the ruling, gay marriage will be legal in the state within three weeks. More, including a link to the opinion, can be found here

Competing for the Sick

One of the most common rejoinders to those who advocate a free market health care system is: how would private enterprise cover those with chronic illnesses?

This is a valid concern. After all, under the current system, a profit-seeking insurance company does not have an incentive to take on a chronically ill patient whose medical costs will exceed any monthly premiums that the company could charge.

But John H. Cochrane, the Myron S. Scholes professor of finance at the University of Chicago’s Booth School of Business, thinks he has the answer.

Speaking informally to reporters at a luncheon sponsored by the Cato Institute this week, Cochrane explained his proposal, which was presented in detail in a recent paper he wrote for the think tank.

In his view, the biggest problem with the current employer-based health care system is the issue of portability, because it affects everybody, whether or not they have insurance. The horror stories of those who lose their jobs and health care coverage, get diagnosed with cancer, surrender their homes, and declare bankruptcy permeate the media and provide the emotional force behind the drive for government-run health care.

Liberal policy analysts have proposed solving the problem by passing laws requiring that insurers grant coverage to anybody who applies and that they charge everybody the same premiums, regardless of risk factors or preexisting conditions.

However, when those ideas have been tried at the state level, the results have been disastrous — the artificially low premiums for the sick drive up the cost of insurance for the healthy. The higher cost deters healthy individuals from buying or maintaining their coverage, and there is a mass exodus of insurers from the state because they don’t want to be left with only the sickest patients. The liberal policy solution to this problem, which is caused by state intervention, is yet more government intervention in the form of a mandate requiring that all individuals purchase health insurance or face a fine.

Cochrane’s alternative solution is the creation of insurance policies that would protect individuals against a hike in premiums they would incur if they were diagnosed with a disease that moves them into a higher risk category.

While such health status insurance policies could be crafted in a variety of ways, one model Cochrane suggests would be to have the health status insurer provide lump sum payments that would be used to cover the cost of the higher premiums. To prevent fraud in the form of fake diagnoses, the payment could be made into an account that could only be used for medical expenses.

The major advantage of the idea is that it would create a competitive market in which insurers would actually chase after sick patients because they’ll be able to charge them higher premiums. It would also lower the cost of insurance for healthier individuals who would no longer have to subsidize the sick indirectly.

Under such a system, if individuals have lapses in their insurance, lose their jobs, or face financial setbacks, as long as they maintain their cheaper health status insurance, they’ll have the ability to purchase insurance should they get stricken with a disease.

Cochrane argues that health status insurance wouldn’t cost people any more than they pay for coverage right now, because today insurance companies are required to renew the polices of anybody they currently insure, and the risk that those customers might get sick in the future is built into the cost of the policies. Cochrane is suggesting that insurers sever those two elements, allowing people to maintain separate health status insurance policies.

Another advantage of such an approach is that right now, insurance policies are short-term contracts. With people moving from job to job and changing coverage so often, insurers have less motivation to encourage healthier habits among beneficiaries. However, health status insurance policies would be issued for the long term, meaning that companies would want to provide incentives for healthier living, perhaps translating into lower premiums for non-smokers and those who remain trim.

During the lunch, Cochrane addressed some of the potential challenges to implementing and sustaining such a system. The most pressing is: what do we do with the millions of Americans who already have preexisting conditions? In response, he acknowledged that there would have to be a role for government during the transition process to finance accounts to subsidize health insurance for those who are afflicted. “If we can get to a system that would be Nirvana, then I would be willing to support lump sum payments to individuals in order to get there,” Cochrane said.

The other complication is posed by the development of genetic testing, which could lead health status insurers to discriminate against people based on their family history as they now do against those with chronic diseases. However, Cochrane argues that this problem would be minor in comparison, because the price of a policy based on calculating the probability that somebody might get cancer is a lot cheaper than the price once there is a certainty that the person has cancer.

While Cochrane’s proposal is mostly conceptual at this stage, the key point, he said, is that there are ways that the free market can cover those with chronic conditions.

A Conservative Rorschach Test?

Sometimes I wonder what separates conservatives from liberals and libertarians on a gut level, before we really get into sorting through individual issues. When it comes to the role of government, I often side with libertarians on social issues (such as the legalization of drugs and on gay marriage), but once we move beyond the realm of what should be allowed by law, I’m more traditionalist. And I think that’s one of the reasons why I end up identifying as a conservative.

This photo spread in the French version of Vogue is a good example of the fault line I’m talking about. I posted two images below so as not to clog up the entire blog, but you can see the rest here.

My initial reaction, before any intellectualizing gets involved, was, it’s pretty appalling to mock the concept of motherhood and glamorize neglectful behavior that actually causes physical damage to the fetus.

Yet over at Jezebel, blogger Tabitha loves the spread, and expresses regret that it wouldn’t be possible in the U.S. because of the puritanical nature of our society. She writes:

French Vogue found the tenderness in mothering, but also the humor, the wackiness, the suggestion that it isn’t perhaps natural to all women, and the surprise….

Can you imagine the reader outrage if a similarly unsentimental editorial take on motherhood ever slipped past the censors at Condé Nast USA?

Jill, over at the blog Feministe, concurs with Tabitha, and there’s some debate in the comments to her post. One commenter writes: “Love it! I am so sick of the cult of the mother that has been growing to epic proportions in this country. It’s ridiculous.”

In my view, the fact that cultural taboos such as this exist in America is positive, yet to Tabitha and evidently this commenter, it’s something that makes us boring and backward compared to our culturally enlightened counterparts in Europe. I could be wrong, but I think showing these photos to somebody and asking, “What do you see here?” would be a good indication of where that person stands politically.

The Incredible Shrinking Dodd

Chris Dodd’s approval rating has sunk to 33 percent in Connecticut in a new Quinnipiac poll, which the director of the survey calls “unheard of for a 30-year incumbent, especially a Democrat in a blue state.” If an election were held today, Dodd would lose to Rob Simmons 50 percent to 34 percent, and he’s also behind other potential Republican comers:

Matched against two other possible Republican challengers, Sen. Dodd trails both State Sen. Sam Caligiuri 41 – 37 percent and former ambassador Tom Foley 43 – 35 percent, the independent Quinnipiac (KWIN-uh-pe-ack) University poll finds.

In the Dodd-Simmons matchup, Democrats back Dodd by only 58 – 27 percent while Simmons leads 87 – 6 percent among Republicans and 56 – 25 percent among independent voters.

Also, 39 percent of voters say they blame Dodd “a lot” for the AIG bonus mess, and 35 percent say they blame him “some.”

Another factor that the poll doesn’t take into account is that Dodd has received so much scrutiny over his financial industry contributors, that he may have difficulty raising as much money as he otherwise would have, potentially neutralizing another incumbent advantage.

While Republicans are no doubt salivating at their oppourtunity here, they shouldn’t get too far ahead of themselves. If things continue to look this bad for Dodd, he’ll most likely be challenged in the Democratic primaries, perhaps by Ned Lamont, who of course won the 2006 Democratic primary against Joe Lieberman before Lieberman became an independent. And in an overwhelmingly Democratic state, a Democrat without Dodd’s baggage would have a good chance of holding the seat, especially because ads will Rebulicanize somebody like Simmons in a general election. For that reason, I’d be curious to see how Simmons would poll against other Democrats.

Either way, this is not a seat you would have considered in serious danger a few months ago. Obama carried Connecticut by 22 points in November, and Dodd was reelected in 2004 with 66 percent of the vote.

UPDATE: a DailyKos diarist snarls:

Dodd has been in congress for 35 years, and a senator for 5 terms.  It’s no shame if he starts thinking about retirement.  Democrats have a strong bench:  AG Richard Blumenthal, Ned Lamont, or one of several congresspeople could step and hold the seat without too much trouble.

I just hope Dodd does not follow the course of his father, who cost the Democrats a senate seat in 1970.

White House Official Calls GOP Budget “Unrealistic”

A White House official, speaking on a conference call this afternoon, blasted the Republican alternative budget as an “unrealistic” proposal that was merely a series of talking points and a continuation of failed policies of the Bush administration. 

“I don’t think this was designed as a real plan that could be implemented in this country,” Rob Nabors, deputy director of the White House’s Office of Management and Budget, said. “I think what this is a series of talking points that they were hoping nobody would look behindâ€_ I think this is an effort just so they can say, ‘We can magically create more deficit reduction than President Obama.'”

Later in the call, he said the Republican alternative looked a lot like the type of idea pursued by President Bush.

“While we do appreciate the details that have been provided, these details don’t look a lot different from the details we saw from the previous administration,” he said. “These are the same tried and true policies that have failed this country in the past.”

When given the opportunity, I asked how we can trust that Obama’s spending proposals on health care, education, and energy would produce promised savings, given that the president’s budget would increase the public debt to $15.4 trillion by 2019 even under the OMB’s own projections.

“What you have when you’re looking at the President’s plan is actually a real plan with tough choices standing behind that plan,” Nabors responded. “I think when you look at what the House Republicans put out today, you have a series of hopes about entitlement reform occurring, but they’re not actually taking any steps to implement those entitlement reforms. We see promises about tax cuts but no real efforts to actually pay for those tax cuts. You see what I would consider to be ‘funny budgeting’ when you start to talk about how unrealistic it would be for Congress to actually go back and repeal two major bills that they just passed within the last six weeks.”

He continued, “One of the things you can look back at is, whose budget is more likely to be passed? Is it a budget that has tough choices, but choices nonetheless, or a budget that seems to punt these choices simply to hit a bottom line that they desire to hit for public relations purposes?”

I then interjected, “But what tough choices are there in the Obama budget that would increase spending to $5.1 trillion by 2019?”

He explained, “I think what you’re seeing is that we’ve been very clear up front that we need to do things in the short-term to put the economy on a stable path going forward. We need to do things to jump-start the economy and protect and preserve the jobs that need to be created in this country. But in the long term, we are being very strict about slowing the growth of discretionary spending, we’re being very strict about slowing the growth of defense spending. And we have specific proposals, not everybody in the world thinks they are the most popular proposals, but they are real proposals to start to address things like subsidies for more agribusinesses. The alternative from Republicans is $24 billion programs over the next decade that are completely unspecified. At least we have put on the table the types of programs that we believe could and should be cut in the future to make our numbers add up.”

According to the White House’s own numbers, the Obama’s budget would add up to debt totaling 67.2 percent of gross domestic product by 2019. That number would be 82.4 percent, according to the Congressional Budget Office.

How the GOP Alternative Budget Stacks Up

Today, Republicans released their alternative budget plan, this time with more detail and numbers. The challenge with judging it relative to the Obama budget is that the Congressional Budget Office has not evaluated it, and thus we cannot make an apples to apples comparison. The Obama budget looks much worse if you’re considering CBO projections than it does if you trust the estimates of the White House Office of Management and Budget. So, if you compare the Republican estimates to CBO projections of Obama’s plan, the Democrats can argue that the GOP is using rosy assumptions about its own budget and that the CBO is being too pessimistic about Obama’s budget. If, however, you compare it to Obama’s budget, Republicans can argue that the White House is relying on rosy assumptions about its own budget. There’s also the matter of the CBO baseline numbers, which project the budget based on what it would be like if we were simply to follow current laws. In order to try and sort through this mess, I created the two graphs below, which measure the growth of public debt both in dollar terms and as a percentage of GDP.

Under the GOP plan, the public debt in 2019 would be  $3.6 trillion lower than under the Obama budget if you’re looking at CBO figures and $1.7 trillion lower if you believe the White House. However, the GOP proposal still manages to increase the debt by $1.9 trillion more than it would increase by if we were simply to follow current laws.

So, it shouldn’t surprise readers of this blog to know that while I think the GOP alternative would be preferable to the Obama plan, I don’t think it goes far enough in terms of really attacking runaway spending. In fact, if Republicans could actually get their way, we’d still be looking at the debt exploding from the $5.8 trillion it was in 2008 to $13.7 trillion by 2019, or from 40.8 percent of GDP to 65.1 percent. For American taxpayers, it really is choosing between Scylla and Charybdis.