One of the ways that today's paranoid right differs from previous right-wing movements is in its appropriation of civil rights language, which is why I call my series "Persecution Politics." For instance, Jerry Falwell once said, "Just like what Nazi Germany did to the Jews, so liberal America is now doing to the evangelical Christians." Pat Buchanan called Macy's "Seasons Greetings" holiday messages "hate crimes against Christianity." And of course, there are all the complaints of "reverse discrimination." Thus, the appropriation of MLK is a natural extension of the paranoid world view.

With reference to the "race to the bottom," benefit equivalence between basic and premium plans eases my mind somewhat, but I'm still concerned that the incentives are backwards. You write:

Ultimately, consumers would need to compare insurance plans for value and feedback from subscribers, and the proposed Exchange would do this.

But the healthy cheap riders don't care much about quality of service. They just want a low premium and won't worry about quality of service until they get sick. Thus, companies with cheap premiums and poor service could actually make higher profits than companies with higher premiums and better service because healthy consumers buy the cheap plans and sick consumers buy the quality plans. So what's the incentive to provide quality service and go beyond the letter of the legal regulation? This is the core of my concern.

Exactly, you should be gloating and preening like a pro-wrestler.

I don't claim to know Obama's rationale, but isn't mandatory coverage a win-win-win-win?

Dumbasses who don't want to buy insurance don't suffer for their folly. Hospitals don't have to have to provide free emergency care. Insurance payers don't have higher premiums because of free riders. And opposition from insurers has been less intense because of the expanded market, which is probably helping passage of the bill.

I agree that it's hard to measure the impact, but the free rider problem is basic game theory and affects almost any social institution. Think about all the workers who benefit from unions but don't pay dues. Free riders.

Although a public option, if it exists, will be required to offer all three tiers of plans, private insurers may choose not to, but none may decline to offer the basic plan covering all services at an actuarial value of 70 percent. They must therefore compete on the basis of the premiums they charge and the details of how they arrive at that 70 percent figure.

The point that I was making in the article is that if healthy people enroll in basic plans until they get sick and then switch to the premium plans, the basic plans will be money earners (because most members will be healthy), and the premium plans will be money losers (because most members will be sick). That seems like a recipe for a race to the bottom, where companies offer only the basic plans and cut corners every where they can to offer the lowest premiums and attract healthy customers. Healthy customers won't care about the cut corners b/c they can always get a better plan if they need one--unless no one offers a better plan. Do you know of anything in HR3962 that will prevent this outcome?

The "induced-demand" model states that in the face of negative income shocks, phy- sicians may exploit their agency relationship with patients by providing excessive care. We test this model using an exogenous change in the financial environment facing obstetrician/gynecologists: declining fertility in the United States. We argue that the 13.5% fall in fertility over the 1970-1982 period led ob/gyns to substitute from normal childbirth toward a more highly reimbursed alternative, cesarean delivery. Using a nationally representative microdata set for this period, we show that there is a strong correlation between within-state declines in fertility and within-state increases in cesar- ean utilization.

In addition, there are tests that a conscientious doctor might recommend to cover all bases but which cost too much to justify doing all the time. Any headache could turn out to be brain tumor, but as a society, we can't afford to give anyone with a serious headache an MRI. Limiting expensive medical tests and treatments with low probabilities of success offers one way to reduce overall health care costs.

Obviously, there is a question of finding the right balance, and I wrote this piece out of concern that we will go too far the other way, but I just wanted to point out that there is some advantage to financial limits on treatment.

The 2.5% tax does seem a bit low. Let's see. As a freelancer, I was able to find cheap plans for under $1000 per year, which is equivalent 2.5% of $40K. I'm not sure at what income level the subsidies kick in, but it seems like you might as well go with a cheap plan.

(Note: I moved to Philly from NYC. In New York, the cheapest plans were around $2500 per year, which would be equivalent to 2.5% of $100K. Big difference. In that case, it could pay to take the tax hit if you make less than $100K.)