interviews
Insurance Coverage Design
by Naomi Zewde
September 24, 2020
This interview with Naomi Zewde, an Assistant Professor in the Graduate School of Public Health & Health Policy at the City University of New York, and a research fellow at the Roosevelt Institute, was conducted and condensed by franknews.
Naomi | I focus on health insurance coverage and the economic and financial implications of insurance coverage design. I look at how these things affect household financial wellbeing.
franknews | We know that medical debt is rising. What is happening in the healthcare system that explains the increase?
The issue of consumer debt in general in America is almost like a slow fire.
If people don't have the resources to meet their basic needs healthcare, education, housing — these fundamental things end up being sources of debt.
In healthcare, people’s deductibles are growing at incredibly fast rates; deductibles are growing much faster than premiums, and certainly much faster than wages over the past decade. People are left exposed to a greater share of their medical expenses, and exposed to huge medical bills — typically more than what most people have in their savings. That creates a lot of stress and fear, and often the threat of that financial burden deters people from seeking care.
What drives the prices of care up?
We don’t know.
The United States spends more on healthcare, both in dollars and in percent of GDP, than any other OECD country, but it is not clear exactly what we are spending that on.
We have a lower life expectancy. We have fewer physician visits per capita. We have a higher rate of chronic conditions. Those who provide healthcare - physicians, nurses - are not necessarily reaping the benefits either. We know that the utilization rate of the healthcare system is not unique to the United States. So why are the prices so high? That is up for debate.
We do know a few things. One, we know that a lot of this money goes towards the vast administrative bureaucracy — something that is unique to the United States. We also know that the government in other countries set prices: they either operate as the sole purchaser and thus dictate prices or they dictate prices through legislation. In the United States, Medicaid has price controls, but private insurers can charge whatever they want. There is no real way for anyone to fight back. There's no designated person to say no, you're charging too much.
Based on your research, what effect does this have on households’ finances?
I have done work around housing evictions and medical debt. We found that Medicaid expansion reduces the rate of home eviction. Going into the research it was not necessarily clear what relationship the two would have, if any. It sounded plausible — people with chronic conditions, for example, end up having to choose between rent and care. But it is astounding to think about the fact that the design of our healthcare system can have these ramifications.
I also found, in a paper that came out last month, that for 25 percent of people who were uninsured before ACA, it's cheaper to file for bankruptcy than to reach a deductible of the subsidized ACA private insurance policy.
Wow.
It’s surprising right! But it makes sense and might explain why there is such low participation in ACA private insurance policies. The congressional budget office projected that 10 million more people would enroll in these plans than actually did; only 8 million people got these. They were way off. The paper investigates why.
And what did you find?
I suspected from the beginning that it was because the deductibles are so high. The median deductible for the silver tier coverage is $4,000. There is a sweet spot in terms of the subsidies that substantially lower your deductible and premium. If you make between $12,000 and $18,000 a year, subsidies will bring down the deductible to around $200. But once you make $24,000 a year as a single adult, you're facing between a deductible between $3,000 and $4,000. So in designing the policy, it was kind of like, we will give extra subsidies to lower-income households, but not in a way that reflects what it is actually it's like to live with these medical bills. It feels divorced from reality.
Our findings don’t necessarily mean the people have to declare bankruptcy. Bankruptcy sucks and hospitals also know that when you file for bankruptcy, they typically do not get anything out of it. So, they look to work with you. Neil Mahoney has a paper, Bankruptcy as Implicit Insurance, that essentially shows that hospitals tend to settle with consumers at their cost of filing for bankruptcy. Hospitals essentially say, whatever you were going to lose if you were to file for bankruptcy, just give that money to us instead.
That reminds me of what Deborah Thorne said in our interview with her: "As Americans, we often rely on credit cards to be our social safety net. And when that falls apart, we are left with bankruptcy.” What is your understanding of how we got to this place?
It's tied up with a social-political larger trend. I have been watching this show called the Black Journal from 1968 to 1977 with a bunch of progressive Black scholars.
I watched one that was right after Nixon got elected, and everyone was saying, "America is taking a turn towards facism. All of American’s white guilt money is gone.” I think that really well foretold this mass acculturation that happened under Nixon.
The United States is not unique in this march away from social egalitarianism over the last half of the 20th century, but we are living through the consequences.
How do we return protections?
There is this famous paper - It’s the Prices, Stupid. I think there needs to be some kind of direct effect on price.
You mentioned the government can do so by either acting as the sole buyer of care or passing legislation. What do you think is the best way to achieve fair prices?
Right. One way of doing so is through a single-payer system. I am actually working on a study now that is going to be published to the Roosevelt Institute that compares single-payer with a public option.
There are two things to know about single-payer that are useful in this context.
One, it would get rid of most of the bureaucracy involved in negotiating prices — the different insurance companies, the different kinds of billing, and different plans. Right now, every doctor's office has multiple people whose full-time job is to understand how to interact with every single different plan of every different insurance company. There are many people employed on the side of the insurance company as well. Under a single-payer system, that would be gone. There wouldn't be multiple different rules to understand, and that reduces the aggregate resource use that is allocated towards healthcare.
Two, a single-payer system is tax-financed. That is important in terms of equity. You get to decide what percentage of household income should be allocated towards healthcare. Basically, the way our healthcare system is designed now means that the more money you make, the smaller percentage of it you have to put towards healthcare.
It is regressive, and no one has a choice but to participate in it.
If we structure it as a tax-financed healthcare system, the way we fund most of our infrastructure, you just get to decide what percentage of household income you are going to take from each household along the income distribution.
interviews
The Partisan Politics of National Security
by Chris Capozzola
March 23, 2020
This interview with Chris Capozzola, MIT professor and author of Bound by War: How the United States and the Philippines Built America’s First Pacific Century, was conducted and condensed by franknews.
frank | Could you start by introducing yourself?
Chris Capozzola | My name is Chris Capozzola. I'm a professor of history at the Massachusetts Institute of Technology. I teach 20th-century US political and military history.
I want to talk about the politicization of the military. More specifically in this time period between World War II and Korea – when we see a real shift in Democrats' and Republicans' stance on the military.
I’m glad to have a chance to share this history, because I think most Americans in the 21st century take for granted that Republicans are the party of national defense, national security, and a big military, and that Democrats are the party against that. This was not always the case.
In the 1930s, we saw the reverse. The Depression was underway and war looming in Europe after the rise of Hitler. As president, Franklin Roosevelt was committed to creating an active place for the United States in the world, and understood the military as crucial to his goal.
Roosevelt faces opponents. Some within the Democratic party think of entering World War I as a mistake, and don't want to repeat it. The Republican party is concerned that expanding the US military would commit the US to being more active in geopolitical conflict , which might strengthen the Presidency at the expense of Congress, or the states, or the people.
Roosevelt has to navigate that tension as the war's really looming.
Once we enter World War II what happens?
In some ways, the debate about a military build up and aid for allies is intense and ongoing until December 7th, 1941. Pearl Harbor brings that debate to an end. During the war, there was bipartisan support for the war effort and for most efforts to expand federal power over the military.
It helps FDR with the effort that he had been making in domestic politics to expand federal power. I always like to say that the Democrats won World War II. They convinced the American public that a strong federal government that provides for its citizens and is deeply engaged in the world is the solution to their problems.
What is the context behind this Democratic position?
I think for many Democrats were from two directions in this time period.
On the domestic side, they are supporting Franklin Roosevelt and the New Deal. They really believed that an active federal government, at the national level, will do more for ordinary people to get them out of the Depression. They also remember Woodrow Wilson and his legacy at the end of World War I. Wilson was a Democrat. He wanted to bring the US into the League of Nations, but he was defeated, mostly by Republicans, but also by some Democrats. With Roosevelt, Democrats are pushing for the US to join the United Nations, and for the United States to establish NATO. They do not want to retreat from international affairs after World War II in ways that they had after World War I.
And after the war is over?
No one quite knows what the military should look like after World War II is over.
The military had expanded dramatically. 24 million men and women served during World War II. Everyone knew that it was not going to stay that big, but there were also new technologies – the atomic bomb, and the makings of what would eventually become the Air Force in 1947. No one really knew what kind of Army was needed. No one really knew if we should still have a draft. The draft was brought to an end after World War II. There were new policies for veterans, like the GI Bill, which was adopted in 1944. It was an effort both to reward veterans, and also to get them to show up at the polls and support politicians who supported veteran initiatives.
Everything was up in the air in 1945, importantly including, America's relationship with its wartime ally, the Soviet Union. The Second World War has created a very cautious alliance between the US and the Soviets against Germany, and that alliance just falls apart as the Cold War replaces the Second World War. As the Cold War emerges, you see a shift in terms of the parties and politics of national defense and national security.
What’s the shift?
Neither the Democrats nor the Republicans support Communism. Neither party wants to see the Soviet Union succeed. Both parties agree that Communism is a threat to the American way of life. However, they don't necessarily agree on how to approach the issues, and between 1948 and 1950 the Democrats are taking the heat for any setback in the war against Communists. Harry Truman, a democrat, is the president. As the Chinese Communist party under Mao's control is consolidating its power, Truman is charged with losing China. Republicans use Communism to critique the Democrats, and that becomes a central way that Republicans have challenged Democrats on national security.
Ever since then, Republicans have generally been pushing for stronger anti-Communist measures, and larger military forces, and the Democrats have been put on defense.
The next war the US enters is Korea. What’s the partisan response then?
That's why this period from 1949 to 1950 is so intense, because you have the Chinese Civil War and the Chinese Revolution that leads to a Communist victory. You also have news that the Soviets have the atomic bomb.
Once again, Truman, a Democratic president, gets the blame for Korea. The US experiences some military victories, but a lot of defeat. Very quickly, the war in Korea becomes a stalemate between the Communist and non-Communist forces. This makes it harder and harder for Truman to say that the Democrats have the right answer on defense.
What's the public Republican stance on Korea?
It’s two-fold. There's certainly bipartisan support for stopping Communism and for supporting American troops and allied troops in Korea. But there are also plenty of Republicans who want to take the war efforts a step further.
Truman doesn't want the war to get big because he knows it would start to affect the economy. It might require drafting large numbers of American soldiers, and he knows that the war is not that popular. Also, Americans don't quite understand the stakes of this war - its complicated and far away. It's not clear to Americans why this is part of American interest.
There are plenty of Republicans who are angered by Truman's limited war strategy. Including General Douglas MacArthur, who starts publicly advocating a much more aggressive war, even while he's serving in uniform under Truman.
Certainly through Iraq and Afghanistan. How does the electorate respond to the transition?
I think the transition happens during the Korean War, but I think we can see it playing out for the average American voter over the course of the Vietnam War in the 1960s.
Kennedy made moves to bring us into Vietnam, and Johnson, of course, expanded the war. He does this, in part, because he felt that, as a Democrat, if he did't send American troops to Vietnam, he would be seen as weak on defense. He feared that he would look as bad as Truman did for having lost China and Korea. Over the course of the Vietnam War era, you start to see the emergence of an anti-war position within the Democratic party. Senator Eugene McCarthy, a critic of the Vietnam War, challenges Johnson during reelection. .
This is where the Vietnam War is different from the Korean War. With the Korean War, there is a bipartisan consensus that the war needs to happen, that the Communists need to be stopped, and that Americans need to beat them -there was just division about who had the better plan. By the end of the Vietnam War, there is an anti-war wave in the Democratic Party, and that will remain an important force. It was critical of Reagan's Cold War policies. It was critical of the War in Iraq in 2003 and 2004, and continues to be a voice today.
Do you think there’s a clear Democratic line on military engagement or intervention post-Vietnam?
I don't think so. In fact, you see deep divisions within the Democratic party today and in the last 10 or 15 years about when to use military force. Bill Clinton and Secretary of State Madeleine Albright felt military intervention was necessary in the late-90s in Kosovo. Some of President Obama's advisors advocated a greater involvement in the war in Syria. But Obama's hesitation to committing US troops to Syria, reflected the ongoing reluctance within the Democratic party to engage in large-scale military commitments abroad.
It seems that there are similarities in this in terms of the Republican narrative. Since Korea, the GOP has been strong on defense, big on military. President Trump and a rising white nationalist sentiment seeks a return to isolationist conservatism. On the left, Senator Sanders moves towards pacifism. Actionably, how different are those stances?
I would make a distinction there. One wing of the Democratic Party has a clear spokesman in Senator Sanders – an anti-interventionist who would actually seek to reduce American troop strength, reduce the number of US missiles. President Trump, for all his talk has made few moves. And in the moves he has taken are anti-interventionist nor do they reduce the size of the military. Instead, he is simply shifting from multilateralism towards unilateralism.
Unilateralism is about going it alone. This is what President Trump calls "America First." There was, in fact, an organization in the 1930s called "American First," which sought to oppose international treaty commitments, the League of Nations, and multilateral forces. In that sense, Trump is not inventing something new. He's tapping into a very old strand in the Republican Party, the kind of thing that was right there in the 1930s, and that Franklin Roosevelt had been fighting against when he was trying to get us ready to fight Germany and Japan.
There is a hyper-clear difference in motive and context. But what’s the difference in terms of orders?
The difference would be very visible in military size and its power. President Trump has made no moves to reduce troop strength, to reduce troop presence at overseas bases.I think that an anti-interventionist president from the Democratic Party would make those moves. That's the difference between a reductionist approach, or even a disarmament approach, and a shift towards unilateralism.
Does this say anything about party ideas around hegemony or global order?
The years of the Cold War, when the US was a clear power on one side and the Soviets on the other, are maybe more of the exception than the rule. In the years before the Second World War there were multiple competing powers: Britain, Germany, the United States was rising. As we move into the 21st century, I think we’re looking at a more multipolar world again. The US will certainly be a strong power, but so will China, so will Russia, so will various European powers.
I think as that multipolar world plays out, and as Americans start to understand that, they will want leaders who can help them navigate that. A lot of Americans, of every political viewpoint, are still operating under a Cold War mindset. They are imaging that we will always live in a bipolar world, but we probably won't, and we might already not.
Do you think, politically, on the right and the left, we need to acknowledge US standing internationally?
Yes. I think there's also a space in between that's actually quite larger. It's something that critics on both the right and the left call, "The Washington Consensus," which is a shared bipartisan viewpoint that the United States should be the most powerful force in the world, that it will work through multilateral institutions where it holds a disproportionate power, and that this will keep the United States the force that determines, that sets the rules, of the global game.
That's the most common opinion, the one held in the middle by most of both parties. That idea isn't at the front of people's mindsets right now, in part because it's not the viewpoint of our current president, but it hasn't really gone anywhere. It certainly is part of the day-to-day operation of both civilian and military institutions.
Do you think the politicization of the military is inherently bad?
The politicization of the military is always bad, in the sense that it is bad for democracy in general.
That's part of what makes a democratic military democratic. By design military institutions are hierarchical and insulated from partisan politics and, to some extent, from democratic accountability. We have to trust them, and we trust them most when we feel like they represent us and that they reflect us.
Over the last 40 years or so, there has been a divergence in who serves in the US Armed Forces. This is, in large part, a product of the institution of the all-volunteer force in 1973, the end of the draft, as well as broader trends toward inequality: both inequality in terms of wealth, but also education and job opportunities particularly for young people in the 18-to-30-year-old range. This has basically made it less and less likely that all Americans will serve.
This is something that all Americans should be concerned about, and I'm not sure that there's a clear solution to it. I'm not sure that bringing back the draft is a solution to that. It certainly wouldn't give us the highly-skilled, professional, high-tech Army that we have now. It's not clear we should unmake the Army we have now just to solve social problems that are external to the Army itself.
There's a quote I think of often and will butcher, that is maybe misattributed to Thucydides, that says, "The Nation that makes a great distinction between its scholars and its warriors will have its thinking done by cowards and its fighting done by fools.” Do you feel like historically there was a lesser divide because the draft or size of the wars, or is this a reflection of rhetoric over time?
I think it's a reflection. I mean, certainly, the draft was the mechanism, but it wasn't the cause, if that makes sense.
Right.
The service in the US Armed Forced by large swaths of the male population was caused by the draft. But the US Armed Forces have changed, and would have changed even if we kept the draft. We are an incredibly technologically advanced military right now that does best when people join and stay for a long time to learn skills. But as they do stay in the US military, they start to develop its own values, and when those values start to diverge from the values of the population that doesn't serve, then those differences get accentuated.
But I'm not surprised that only 1% of Americans have served in the US Armed Forces. I always compare that statistic to the fact that only 1% of Americans are farmers, but we still eat every day. But you might also say, "Well, we don't live as close to the land today. We don't understand our land. We don't understand our food." I think that same disconnect is sort of happening with the military.
We don't necessarily understand the choices that the military makes, we don't understand the service that they do on a daily basis. I'm not sure we can undo either our food system or our defense system, but we should think about what kinds of indirect effects they're having on our society.
I feel bad asking historians to predict the future, but I’m going to anyway. Where do you think we go from here?
Well, yes, you're right. Historians don't like to predict the future. But when we are asked to, we know one way to get it right every time, which is to say, "This too shall change." I really do think that is the case.
When some sort of demographic shift happens, or, God forbid, some kind of military crisis happens, they could shift rapidly again.
The tasks of the US Armed Forces will also change in the future. We tend to think that large land wars with hundreds of thousands of infantry soldiers are over, but they might not be. There will be other crises, particularly related to global public health, to the global climate emergency, to natural disasters. That may require a different kind of military, and it would probably require different ways of thinking about who serves in it.