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Public Opt-Out?

October 8, 2009

I was intrigued last night by this recent proposal to introduce the public health care option as a federal default position, but then to give states the option of opting-out of the default.  It’s the option option.

Plainly, the objectives of this approach are primarily political — to get the votes in the Senate:

The proposal is envisioned as a means of getting the necessary support from progressive members of the Democratic Caucus — who have insisted that a government-run insurance option remain in the bill — and conservative Democrats who are worried about what a public plan would mean for insurers in their states.

But is it ethically permissible to sacrifice the interests of the unlucky minority in states that may, due to internal political pressures, opt out?  In other words, it appears that by supporting an opt-out option, some people will be unnecessarily disregarded. On its face, this seems like a difficult conundrum. It is particularly difficult if you take the argument seriously that health care is a moral imperative. If health care is a moral imperative, which I believe it is, then one ought not endorse policies that seem poised to leave people behind.  Better to try to get the whole package, the deluxe deal.

I’m not so sure…

I think it’s reasonable to offer the opt-out option. There are at least two reasons that I say this. The first is the pragmatic and obvious reason: there’s a risk that not supporting an opt-out option will ruin the chances of getting any public option legislation passed in the first place. But that’s too easy.

The second reason is that it’s maybe more democratic, in principle, to offer a state level opt-out option. Supposing that there are strong moral reasons to provide people with a basic level of care, it is not clear that the correct thing to do is to coerce states into taking advantage of that care, particularly if the representatives running the state are leery of the dramatic changes that may affect their state economies.

Now, obviously, states are different entities than individual people, and there can be some awful tyrannies of the majority in states with ill-informed or manipulated electorates — but that’s true for all states.  The important thing is not that we simply make the world better, but that we try to provide individual citizens with unfettered access to the decision-making processes that affect their lives.  In some cases, this will involve action at a wide, federal level, as when civil rights are directly usurped by pressures that keep some populations from having a say in their governance.  Federal civil rights protections can help to grease the wheels at the local level for more just public policy.  In other cases, as maybe in health care, the opportunities for manipulation of the affected voting and participatory electorate may — I say may, because this is really an empirical question — be facilitated by the largeness of the issue.  The elixir of ideology may more handily usurp clear judgment when the numbers are enormous and the risks are spread widely.  Drop the impacts of no public option down to the local level, where they may be more palpable, and it’s conceivable that the ideological pressures may be mitigated or disappear.

My suspicion is that widespread risk calculation may be corrupting the political judgments of individual citizens.  In other words, legislators and voters may be thinking too theoretically, precisely because they are looking at numbers in the 300 million range.  Pile the sick and ailing in one basket, and the healthy and robust in the other basket, and when you look across the landscape of the United States, it seems like a pretty poorly distributed risk pool. The likelihood is low that someone else’s lack of insurance will directly affect me, here, a person in the extremely healthy basket.  How to resolve such abstract risks?  Appeal to ideological presuppositions about the human condition, for instance.  Libertarians fall on one side, radicals on another, social conservatives on yet another.

Do the same piling in a smaller pool, maybe at the state level, where the populations are maybe closer to 5 million, and risk calculations begin to shift. Once the economies of those states that opt-in find their new equilibrium, those states that are otherwise trepidatious about making the plunge can make their decision based on more information.

Moreover, and I hate to sound like Tiebout here, because his is kind of a lumpy theory when applied to relatively inconsequential goods and services like street lamps and pretty buildings, but when you start talking about something as substantial as health insurance, people can (and will) migrate much more readily.  One can preserve some amount of individual agency while also offering up pressures for the political will to develop internal to states.

There are no guarantees, of course.  It’s hard to explain how people in perpetually disenfranchised positions continue to vote against their own basic interests. I’ll leave that discussion up to the social scientists.  But it is also hard to imagine that if there is a shifting around of the population of the Tiebout predicted variety, that this won’t shift state policies as well — either away from or toward the public option.

Practically speaking, will such movement overwhelm the healthcare systems of nearby states?  Unhealthy people could easily migrate into states where they will be better cared for.  They likely will.  At the same time, so might the risk averse.  I can imagine that a public opt-out option would also then add pressure to local state legislatures to batten down the state residency requirements.  Dunno.  These are primarily empirical questions.  It’d be interesting to see some data on this.

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One comment

  1. You should go look up how Social Security was introduced. For quite a long time not everyone was covered.

    “Most women and minorities were excluded from the benefits of unemployment insurance and old age pensions. Employment definitions reflected typical white male categories and patterns.[11] Job categories that were not covered by the act included workers in agricultural labor, domestic service, government employees, and many teachers, nurses, hospital employees, librarians, and social workers.[12] The act also denied coverage to individuals who worked intermittently.[13] ”

    I have a cousin who is still living, who as a teacher in NYC elected (it was optional, Mom Rabett chose SS coverage and has prospered) not to pay SS. This was possible at least into the 1950s. It was a bad decision, but many people made it.



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