Avik Roy and Douglas Holtz-Eakin reply to the many people who have discussed their recent piece. I’m going to ignore the discussion of politics and “surrender” and just focus on the parts that apply to me.

I don’t want to be told I’m playing “gotcha” so here is exactly what is said:

Strangely, Aaron claims that private non-profit insurers in Switzerland are “closer to a ‘public option’ than anything we have.” No one who follows the insurance industry would agree. Indeed, the United States has plenty of non-profit insurers—Blue Cross Blue Shield, most notably—and their conduct in the marketplace is far closer to that of the for-profit insurers than it is to government payors. Aaron claims that “there is no ‘public option’ here” in the United States, which ignores the fact that more than 100 million Americans will soon be enrolled in the “public option” systems of Medicare and Medicaid.

Ok. “Public option” has a very specific meaning among health wonks, especially when it comes to health care reform. It’s not referring to Medicare or Medicaid, or even to non-profit insurers. Go google “public option”. Really! Go do it. I bet not one hit, for many, many pages, references either of those programs.



The public option, as even the insurance industry understands it (regardless of what Roy says), refers to a non-profit plan that met the requirements of the ACA that was to be offered by the government on the exchanges. It’s not in the law. In Switzerland, on the other hand, they require every insurance plan on the exchanges to offer a non-profit product that meets the requirements of their laws. So I think I’m correct in saying that’s closer to a “public option” than what we have here.

Of course, if you think that Medicare is a “public option” then you won’t agree. Then don’t use the very specific words “public option”. Say they have no Medicare.

Finally, Aaron says that he would applaud anyone who offered exchange-based coverage to the Medicaid population; he implies our plan does not, when in fact that is one of its core features: a serious misrepresentation on his part.

That’s not what I said. This is what I said:

When someone supports giving everyone below 138% of the poverty line massive subsidies for private insurance on the exchanges, I’ll applaud them. No one is. It would cost more than the expansion.

That’s because most plans want to give everyone a meager subsidy and then let them go buy insurance on a much less regulated exchange. That is NOT the same thing.

But look, this is getting silly. My problem with the original piece was literally one thing: the misuse of Switzerland.

If you want a system with less regulation and less mandates than ours, you’re going to have a really, really hard time finding one out there. If you look at the rest of the world, and you want to find an example of a system that’s arguably more market friendly, you’re left with Switzerland and Singapore (and maybe the Netherlands and Germany, but those have other unpalatable issues). Most people don’t want to suggest we become Singapore. So they go Switzerland.

There’s a problem, though. Switzerland is in many ways more regulated and mandated than the ACA, as I said before. Plus, it has some of the highest cost-sharing around (even more than we do), and it still spends more than almost every system but ours. So it doesn’t even support “more cost-sharing” as a way to reduce spending when compared to pretty much every other system. So what’s a person who wants free markets to do?

Well, you can either abandon the idea of using other systems to make your case, or you can pretend those systems are different than they really are. I’d rather people do the former, but many do the latter. They hold up Switzerland as if it proves something it doesn’t.

If you want to say Switzerland proves you don’t need Medicare and Medicaid to get everyone covered, so be it. That’s Wyden-Bennett. But you can’t say Switzerland shows we can do it without community ratings, without mandates, without more regulation, and without generous subsidies – because that’s how Switzerland gets it done.

That’s my issue. Nothing more.

@aaronecarroll

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