I count both Ramesh Ponnuru and Ezra Klein as friends.  (I'm so post-partisan.)  Why, oh why must they force me to choose between them??

Ponnuru had an op-ed in yesterday’s New York Times where he reaffirmed his membership in the Anti-Universal Coverage Club.  Klein responded in a way that’s sure to satisfy his base, but I think he left the reality-based community wanting.  Are you ready for the fisk?

Klein suggests that if "80+ percent of Americans . . . think the system needs fundamental changes or a complete rebuild," then 80+ percent of Americans must support universal coverage.  Hmmm, bit of a stretch.  In fact, I can recall one poll where nearly one-third of likely Democratic primary voters rejected universal coverage.

Klein suggests that giving consumers the freedom to avoid unwanted state health insurance regulations would mean that Arizonans wouldn't get coverage for colorectal cancer screening, and that there would be no mammogram coverage in Idaho.  Mmm, that's good crazy.  I refer my right honorable friend to the episode where The New Republic's Jonathan Cohn made a similar claim about mandates for prostate and cervical cancer screening.  I looked up the services covered by the plans made available to the Cohn family by the University of Michigan.  It turned out that six out of the seven available plans cover both prostate and cervical cancer screening — even though Michigan requires insurers to cover neither.  (I offered to wager Cohn a fancy dinner that his family has coverage for both, but I never heard back from him.  Foolish, really, to let me know where he gets his insurance. Klein would never give me such an opening . . . or would he?) What Ponnuru proposes is to let Arizonans and Idahoans and everyone else choose what their health plan covers.   Imagine that: people rationing medical care according to their preferences, rather than the preferences of employers, interest groups, bureaucrats, health policy wonks…  Why Klein clings to such regulations despite zero evidence that they actually increase access to the targeted services is beyond me.

Klein criticizes Ponnuru for proposing to replace the current tax preference for job-based coverage with a tax credit available to everyone, much like John McCain proposed during his (latest) presidential campaign.  Ponnuru cites a study estimating that tax credits would reduce the number of uninsured by 20 million.  Klein counter-cites one study estimating that tax credits would have zero net effect on the number of uninsured, and a second study estimating that those who transition from job-based coverage to the "individual" or “non-group" market would pay an additional $2,000 per year for an identical policy.   Klein's criticisms sound persuasive -- provided you know precious little about the topic.  For one thing, the two studies Klein cites are actually the same study.  Pity, really.  Had Klein found a second study to support his position, perhaps it would not have been quite so flawed as the one he did find.  Here's what I wrote back in September about that study's flaws:

Thomas Buchmueller et al. estimate that replacing the tax exclusion for employer-sponsored insurance (ESI) with Sen. John McCain’s proposed health insurance tax credit would have zero effect on the uninsured. Yet their estimates neither incorporate nor even acknowledge factors that would tend to increase coverage. First, workers who lose ESI would see their wages rise significantly as labor markets force employers to “cash out” those workers.

That effect would help all workers afford health insurance — but particularly older and sicker workers, because they would get cashed-out more.

Second, the authors estimate that non-group enrollment would double, yet they ignore that administrative costs would fall in a thicker non-group market.

So that $2,000 mark-up really wouldn't be $2,000.  Even if some mark-up remained, workers could reduce their premiums by purchasing less coverage.  Not all that crazy a concept, considering that the tax treatment of job-based insurance encourages people to buy too much coverage.

Then there's this effect, which would further reduce premiums for healthy workers:

Third, the authors acknowledge that employment-based insurance forces the healthy to subsidize the sick, yet they ignore that the non-group market would reduce premiums for a majority of workers by allowing them to avoid that hidden tax.

The study's authors also ignored the premium-lowering effects of McCain's proposal to allow people to avoid unwanted regulatory costs (e.g., mandated benefits):

Fourth, though the Congressional Budget Office estimates that state health insurance regulations increase premiums an average of 13 percent, the authors ignore that McCain’s proposal to let consumers shop nationwide for insurance would further reduce premiums by allowing consumers to avoid that hidden tax as well.

A few random clarifications.  Klein fears living “in a space where insurers could still discriminate based on pre-existing conditions.”  That’s Church-of-Universal-Coverage-speak for, “I want price controls on health insurance.”  Government can outlaw the practice of charging higher premiums to the sick, but it cannot outlaw the reasons behind those higher premiums.  So when government prohibits insurers from competing on price, insurers respond to those underlying reasons by competing to avoid the sick.  Yes, yes, it’s that pious preference for price-controlled premiums that unleashes the beast of adverse selection — and prevents the market from developing innovative insurance products that help sick people pay those higher premiums. Klein fears a world “where millions of Americans will still lack access to health insurance,” because to the devout, access to insurance matters more than access to health care.  Klein fears that when people move from ESI to the individual market, risk pools will get smaller and insurers will get stronger.  Yet risk pools would get bigger, and insurers weaker relative to consumers.  Klein believes we can “ensure that all Americans have health coverage, [and] that their coverage is comprehensive,” and that we can do all that without rationing “access to health services.”  How?  Just “bring down costs in the system.”  Riiiight.

To cap things off, Klein claims that Ponnuru and I think the U.S. health care sector as it exists is “fine.”  I really can't blame him for arguing with straw men.

In the end, Klein’s case against Ponnuru boils down to the same absurdity I found in Buchmueller and colleagues' case against McCain:

The McCain plan would eliminate forced subsidies: of the sick by the healthy (via ESI and community rating) and of particular providers by unwilling consumers (mandates for chiropractic coverage, etc.). Buchmueller et al. would have us believe that if we stop robbing Peter to pay Paul, not even Peter would benefit. A more balanced critique might have been more persuasive.

Klein spends a lot more time thinking about health policy than Ponnuru does. But you'd never know it.