ObamaCare Rollout: Feds Use “Nudge Theory” to Get “Consumers” to Sign up for Five Years (Not One)

In this post I’m continuing the analysis of the final version of the basic application for ObamaCare that I began here. I’m going to look at how ObamaCare “nudges” citizens consumers into “opting” to renew their eligibility automatically for five years, instead of fewer years, or not at all.

Here’s the distinction between “opt in” and “opt out.” (As a dyslexic I find myself getting as confused with “out” vs. “in” as a I am with “right” vs. “left.” So I certainly hope I get this long explanation right.) From the University of Miami’s Miller School of Medicine:

  • an “opt in” requires an action or affirmation by an individual for inclusion; the default is exclusion;
  • an “opt out” requires an action or affirmation for exclusion; the default is inclusion.

“Opt out” is where a checkbox is checked that is in the interest of whoever’s selling you a product, but not necessarily in your best interest. Like so:

[x] Yes! Sign me up for 36 months of Newt Fanciers’ Digest for the low, low price of $14.95 per issue!

You’ve all had the experience of signing up for something online, and having to carefully uncheck all the checked boxes? You’re opting out; the default is inclusion, so you have to undo that. But not everybody goes to the trouble, which is why sleazeball marketing companies use the tactic. Banksters liked to use “opt out” to sign you up for over-draft protection (i.e., lots of lovely rents) on ATM overcharges, a practice so vile that even the Fed couldn’t stomach it, and required “opt in” instead.

Leading me by a natural association of ideas to ObamaCare! How does “the final version of the basic application” handle opt in vs. opt out? Well, not so crudely as Newt Fanciers’ Digest. But they set you up for “opt out” (default inclusion) anyhow. Let’s see how.

First, let’s look the draft 26-page “Single Streamlined Application”.

Figure 1


Here are the key passages as text for Figure 1:

I understand this renewal process will occur each year for the next 5 years unless I tell the Marketplace that I don’t want to renew, or if I leave the Marketplace. I also understand that I can change my answer later. If I don’t check the box, I can select less than 5 years. (Display check box.)

a.(If box is unchecked when submitted, display the following.)

I give permission for my eligibility for help paying for health insurance to be renewed for a period of:

i. 1 year
ii. 2 years
iii. 3 years
iv. 4 years
v. Don’t renew my eligibility for help paying for health insurance

Although the language (“If I don’t check the box, I can select…”) is convoluted, it’s clear that if the citizen consumer takes no action (does not check the box), they will be presented with options that start with one year and end with not renewing at all. Only by checking the box will the citizen consumer be signed up for 5 years. The draft single streamlined application, in other words, used “opt in”; affirmation by the citizen consumer is required for the maximum 5 years.

After the draft “single streamlined application” was introduced, the White House got its hands on the form and revised it, framing its revisions — aided by what retrospectively looks like kayfabe performed with the help of Time‘s Joke Line — as reducing burdensome paperwork. From Obama’s presser:

You know, we put together initially an application form for signing up for participation in the exchanges that was initially about 21 pages long.

And immediately everybody sat around the table and said: ‘Well, this is too long, especially, you know, in this age of the Internet. People aren’t going to have the patience to sit there for hours on end. Let’s streamline this thing.’

So we cut what was a 21-page form now down to a form that’s about three pages for an individual, a little more than that for a family, well below the industry average. So those kinds of refinements, we’re going to continue to be working on.

Of course Obama is too artful to lie unless he really, really has to. And indeed the White House really did cut down the form for individuals (although making the process more cumbersome for families of four). A neat piece of misdirection! Obama, as we have seen, did not mention one major revision the White House made: Involving consumer reporting agencies in the eligibility determination process. Nor did he mention a second major revision: Converting the ObamaCare application form from opt-in to opt-out. Let’s see how that works in the final version of the basic application:

Figure 2


Here are the key passages as text for Figure 2:

To it easier to determine my eligibility for help paying for health coverage in future years, I agree to allow the Marketplace to use income data, including information from tax returns. The Marketplace will send me a notice, let me make any changes, and I can opt out at any time.

[ ] Yes, renew my eligibility automatically for the next 5 years (the maximum number of years allowed), or for a shorter number of years:
[ ] 4 years
[ ] 3 years
[ ] 2 years
[ ] 1 year
[ ] Don’t use information from tax returns to renew my coverage.

So how do we know the White House changed the final version of the basic form from “opt in” (affirmative action for the maximum 5 years) to “opt out” (affirmative action for less than 5 years)? To begin with, it’s right there in the language of the form: “opt out.” Now look at the checkboxes. You’ll notice at once that none of them are actually checked, leaving open the possibility that none will be checked.* Presumably there will be a rule issued to cover that case; any guesses which option will be the default? Clearly, “5 years,” from two cues: (a) the starting “Yes,” (at least there’s a comma and not a exclamation point, preserving some dignity at least); and (b) it’s first. (If you’ll look again at Figure 1, you’ll see that “5 years” was originally last, not first. “Choice architects” in the White House reversed the order.**) Why is the first item important?

When presented with a list of items to check, citizens consumers tend to treat the first item as the default, and check it. User Interface maven Jakob Nielson from the designer’s perspective:

In lists of items, make sure the ones the user is most likely to want come out on top or are made to stand out.

And Nielson on citizen consumer behavior:

How gullible are Web users? Sadly, the answer seems to be “very.”

Professor Thorsten Joachims and colleagues at Cornell University conducted a study of search engines. Among other things, their study examined the links users followed on the SERP (search engine results page). They found that 42% of users clicked the top search hit, and 8% of users clicked the second hit. So far, no news. Many previous studies, including my own, have shown that the top few entries in search listings get the preponderance of clicks and that the number one hit gets vastly more clicks than anything else.

What is interesting is the researchers’ second test, wherein they secretly fed the search results through a script before displaying them to users. This script swapped the order of the top two search hits. In other words, what was originally the number two entry in the search engine’s prioritization ended up on top, and the top entry was relegated to second place.

In this swapped condition, users still clicked on the top entry 34% of the time and on the second hit 12% of the time.

So, the draft ObamaCare application (figure 1) was “opt in,” where citizens consumers affirmatively chose the maximum 5 years, and were presented with the one year option first, and the final ObamaCare application (figure 2) is explicitly “opt out,” where citizens consumers are presented with the maximum 5 year option first (so the greatest proportion will choose it), and the default isn’t even stated let alone visible (though I’m guessing it, too, will be 5 years).

* * *

So, manipulating citizen consumer behavior — all for their own good! — by structuring their default choices…. Does that remind you of anything? It should: That’s classic “Nudge Theory” as expounded by the Administrator of the White House Office of Information and Regulatory Affairs in the first Obama administration: Cass Sunstein, the University of Chicago loon — sorry for the redundancy — who proposed the Okhrana-like scheme of “cognitive infiltration” of “extremist groups”.*** Anyhow, “nudge theory” was and is Sunstein’s Big Idea. Here’s a taste from Sunstein’s blog:

Decision makers do not make choices in a vacuum. They make them in an environment where many features, noticed and unnoticed, can influence their decisions. The person who creates that environment is, in our terminology, a choice architect. The goal of Nudge is to show how choice architecture can be used to help nudge people to make better choices (as judged by themselves) without forcing certain outcomes upon anyone, a philosophy we call libertarian paternalism. The tools highlighted are: defaults, expecting error, understanding mappings, giving feedback, structuring complex choices, and creating incentives.

Man, “libertarian paternalism.” I dunno. I sure don’t know many people marching under that banner — like not any libertarians I know, and not any paternalists either — but somebody in the West Wing certainly is, because look how they manipulated those defaults! (Some post-2008 technocratic campaign hagiography attributed Obama’s victory to nudge theory as opposed to, say, a crash using up the last of the goodwill from FDR’s time the Democrats had on the balance sheet.) Here’s an often-cited example of how nudge theory’s choice architecture works in practice. From Sunstein’s blog (“Obama proposes savings nudges”), The Times in 2009:

One key finding in that research is that people are more likely to contribute to a retirement savings account, like an employer-sponsored 401(k) plan, if they are enrolled automatically. Workers have usually had to sign up for the plan, something that large percentages of people either postponed or never did at all.

Under automatic enrollment plans, employees are automatically signed up unless they explicitly ask not to participate.

Many large and medium-size companies have already adopted automatic enrollment plans, but White House officials said the new initiative was aimed at very small firms that often use a simpler system called the “simple I.R.A.”

Under the new initiative, the Treasury Department and the Internal Revenue Service will publish new guidance for small businesses on how to use automatic enrollment for the simplified plans. It will also encourage employers to institute an automatic “step up,” which increases a person’s saving rate each year or with each raise.

Leaving aside the 401(k) vs. Social Security policy discussion, the choices of the “choice architects” themselves seem unnecessarily constrained: Why are they focusing only nudging people to join the 410(k) program, and not nudging them to pick plans that won’t rob them blind with management fees? Even presuming good faith on the choice architects’ part — a little hard to do, given that they replace The Noble Lie with The Noble Default Setting — their efforts turned out to have the effect of enriching the rentiers at everyone else’s expense. One can only hope the same doesn’t happen with ObamaCare!

* * *

I’m not an ethicist, so I can’t go much further with Nudge Theory than to say it feels creepy, manipulative, and predatory to me, rather like one of those books on becoming a Player. Here’s a philosopher on Nudge Theory:

The folk singer Karen Dalton once said that she sang softly because she wanted people to listen to her. This strikes us as paradoxical. Certainly people are more likely to listen when you raise your voice. Indeed, this is the expectation of the short-term effect. But the long-term effect may be precisely reversed. Think of a grade school teacher who is prone to raise her voice. This may be effective in the short term, but she may have to raise her voice more and more and the overall effect may be that more children would have listened to her had she never raised her voice to begin with. Similarly, there is research showing that the death penalty has a deterrence effect in that the rate of pardon by the governor correlates with the rate of violent crime in subsequent years. (Gittings and Mocan 2003) This is consistent with the brutalisation effect—capital punishment may contribute to a more violent culture and may increase violent crime in the long run.

Now it may be the case that repeated Nudging in public health and pension funds may have short-term positive effects at best. Nudging may not create sustainable effects on people’s behaviour for the long-term; as time goes on, the level of Nudging required to retain this effect may increase. Just as Karen Dalton did not want to raise her voice, knowing full well that some people would zone out, we should not be lured by the short-term success of Nudging either. To warrant long-term success, we should let people make their own decisions while providing minimal aid. My point is that short-term success of Nudge may be consistent with long-term failure. The long-term effect of Nudge may be infantilisation, i.e. decreased responsibility in matters regarding one’s own welfare.

Well, yes. Infantilization is the flip side of paternalism, no? Consumers. Not citizens. Anyhow, if Nudge leads to the need for more Nudging, that would be a self-licking ice cream cone, wouldn’t it?**** So, as the ObamaCare rollout continues, we should probably look for more places where Nudge Theory is being practiced, and when it begins to shade over into compliance.

* * *

The bottom line on the ObamaCare application form for me is this: The White House changes to the form were hardly about how many pages long it was; that Obama, in his presser, would omit to mention the introduction of consumer reporting agencies into the eligibility determination process, and would also omit to mention the change from “opt in” to “opt out” makes it very difficult to believe that the ObamaCare rollout process will be marked by good faith on the part of its most prominent advocate. Shocker, I know.

NOTE * I don’t know why they used check boxes instead of radio buttons, the standard when a single item on a list is to be picked. I can only speculate that a list of radio buttons should have the default selected, and they didn’t want to make the default that visible.

NOTE ** I don’t know why the White House wants to default to 5 years. Nor do I know whether the years are tax years, calendar years, or whether the clock starts ticking when the form is signed. Maybe that’s somewhere in the legislation, since it doesn’t seem to be tied to electoral politics. For me as a citizen consumer, 5 years just doesn’t make sense. Why make that kind of commitment to a program I don’t even know will work? Do I get a discount if I sign up for more years? No? So WTF? What’s in it for me? I got no incentive, Cass!

NOTE *** Hence, I imagine, Obots, for some definition of “cognitive.”

NOTE **** The work of Outis Philalithopoulos on “academic choice theory” is relevant in this regard.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. CB

    OT, I guess:

    If another SC vacancy comes up during Obysmal’s term, Cass Sunstein may be the nominee.

    Having looked over, but never chosen, the 401(k) “menus” of investment options in several companies, I wondered who made the choices of plans and plan managers……….and why. I mean, some of the choices were so plainly bad, I had an inkling the investment management companies were making it worth someone’s while to choose them. Just a thought.

      1. CB

        What got me was the fund flipping and switching and shuffling by would be day traders with too much time on their hands. They jumped at every little shadow in the market and followed dubious advice from the favorite columnist du jour. But the fund companies chosen by the people who make those kinds of decisions was the tip-off that all was not well: the choices at some companies were lousy not matter how you divvied up your money–sorry, allocated. (I still call turntables record players.)

  2. Jim Haygood

    ‘For me as a citizen consumer, 5 years just doesn’t make sense.’

    Indeed, it only makes sense if you resemble the drone who drafted this form: that is, a wage slave who pulls in a constant but lowish salary, year after year.

    In reality, people’s incomes vary a lot. Some years, through choice or otherwise, they don’t work. Other years they get a windfall from a capital gain or an inheritance. And so forth.

    Now such normal people face the headache of calculating, every year, whether they qualify for a health plan exchange (in which case, they have to forfeit their financial privacy) or not, and having to switch health plans every time their status changes.

    Reportedly, one exception to this Orwellian horror is if you spend more than 330 days a year outside the USSA … an excellent incentive to go on permanent vacation from Obama’s health care police state.

    1. Wells Fargo Must Die

      I think it makes some sense. A significant portion of the people on ObamaCare are going to be heavily subsidized and will just roll over what ever policy they have. Just like in Corporate America where something like 80% of people never change their health coverage option from year to year. Or never get a new electricity provider after a state deregulates. Instead of going to the trouble of making selections year after year, an individual can just be re-enrolled.

    2. jrs

      “Indeed, it only makes sense if you resemble the drone who drafted this form: that is, a wage slave who pulls in a constant but lowish salary, year after year.”

      In some wonderfully empowered workplace where such a drone has complete autonomy over their work. And if you’ll buy that …

      Nah, everyone knows all this stuff has probably been approved at the top, maybe not Obama, but still a fish rots …

    3. bluntobj

      Also a likely way to automatically claw back subsidies if income changes reduce the allowable subsidy in future periods, thanks to the lookback clause.

  3. banger

    Nudging is fine if the intentions of the nudger are to help us. But in the case of this administration their intention is, always, to deceive and cheat us. I don’t think they sit around and say that to each other it’s just inherent in the type of person who ends up in positions in this administration. In some ways, I prefer the ne’er-do-wells from the right to the “do-gooders” from the other right-wing party.

    Sadly, even if we are wrong we have to assume the intentions of the federal government is to enrich the rich and cheat the rest of us–until proven otherwise.

      1. banger

        The Democrats market themselves as politicians that will do good things for the people which in fact they have no intention of doing at all. American politics is now just a show–it’s not real. Politics goes on underneath the surface. I’ve seen it up close and contemporary reporters will not report on the way things actually are.

    1. diptherio

      I have to disagree about nudging being ok “if…” Who’s to say what’s in my best interest (apart from me)? What assurance can anyone ever have that the person tasked with nudging us all for our own good a) is actually nudging with our benefit in mind; and b) that they actually know the most beneficial way to nudge people. ISTM that even well-intentioned nudging is subject to the law of unintended consequences.

      You’re right that these nudgers can’t be trusted, but I doubt that any nudgers could be.

      1. banger

        People who love us often understand better what we need. We are not isolated individuals we are deeply connected to others. In actuality all the people we interact with are nudging us somewhere the trick is to discern the underlying motivations.

        1. Lambert Strether Post author

          That’s a least partly true; people have different tolerances for what they see as manipulative behavior, even if “for their own good.” Mine is very low.

          However, you’re talking about people who love us. People who love us don’t generally demand that we interact with them through by provided structured data through a form, the topic here.

        2. bluntobj

          “People who love us”

          Seriously? In the context of this political administration?

          More like the Ministry of Love going on now.

      2. jrs

        Yes, basically this rejection of paternalism is usually interpreted as libertarianism, but while the anti-authoritarian impulse is there, it is not necessarily any such thing. It’s rather a desire for real democracy, from which power flows from the grass roots, the bottom up. Not imposed on us by our betters who know what’s best for us. Not that you won’t search for such democracy especially on the Fed level like Diogenes in this country where you will find no such thing.

  4. cwaltz

    From a pricing standpoint it makes sense. A 5 year contract should lock in YOUR prices and terms and THEIR premium (and I use that term loosely because my experience has led me to believe that the insurance companies cherry pick what they consider grandfathered and new, and I’ve seen nothing to conclude the Feds will enforce regulation.) For example, my insurance company does not cover annual exams because the policy was “grandfathered” to exclude this cost to THEM however, the insurance company somehow managed to change the terms to their advantage to up the cost of lab work to 5% for ME.

    The rules for them should be simple. Once you change the terms of a policy,you no longer get to call yourself an old policy. If a premium changes then you’re a NEW policy, not an old one. I won’t hold my breath on the enforcers actually making things better for average citizens. Nowadays enforcement seems to be a way to extract kickbacks to enforcers, not a way to correct things for consumers.

  5. Ferrous Male

    If a sufficient number of younger realize that they are overpaying for insurance in order to subsidize older Americans’ health care costs, and that they (generally) make out better if they opt for the penalty (tax), then, Obamacare falls apart. Therefore, it makes sense to try to lock in as many consumers as possible, in order to maximize subsidization for a modest period of time. I presume that as time goes on, consumers would increasingly acquiesce to the status quo, further securing Obamacare’s future.

    1. ambrit

      Dear FM;
      Another possibility is that Obomneycare falls apart from internal dysfunctions. As Medicare has shown, medical types opt out of what they perceive as “non-sustainable” programs when possible. Capitalism at its best. Without some sort of governmental coercion of the medical profession itself, the medical services to the “lower orders” collapse. With no viable options left, the mob rejects the system in its entirety. That’s when Homeland Security comes into its own and starts earning its money. (All hail the return of the Salary Men!)

      1. jrs

        Medical providers opt out of Medicaid patients because the reembursement is too low (compared to what they can get otherwise). That’s it period. No need to obsfucate what really is the most basic of economics. Of course even doctors not being purely economic (wo)man will sometimes see some Medicaid patients, but they limit the % of their practice it takes.

    2. Lambert Strether Post author

      The lockin might be especially important for youth, too. Five years of an income stream with very little outlay. They really are thinking like an insurance company. The notion of public good or health care as a right is completely foreign to them.

  6. clarence swinney

    Joe/Marist poll shows 64% put Jobs ahead of Debt Reduction.
    We know how to reduce the Deficit but not how do we create NEW industries
    and millions of new jobs..The out sourced jobs return? Forget that dream.
    I have read only that spending like 500Billion on infrastructure will
    revive our dormant economy. Debt is important. Fed has kept interest rates low
    but higher rates will come. It is called good news that the 2014 Budget projects the first below 1000B Deficit since 2008. 700B is not good news. Zero billion is good news. We can balance our budget. Congress can do it. A higher “effective” tax on wealth estates and income.
    Public finance campaigns over six months. Ban any gift with a financial value as gift to employees of the Federal government . Overturn Corporation as a person. Expire Bush Tax Cuts.
    Eliminate Obama Payroll Tax Cut. Means Test Social Security and Medicare.
    It was disgusting to hear employees of large hotel on Collins Avenue in Miami Beach
    tell me that wealthy winter residents get S ocial Security checks each month. It is disgusting to know some of my dearest friends get Social Security and Medicare and are multi-millionaires.
    I love them like brothers but their logic turns me off. “We paid for it” logic. Yes! They paid for free cheese Ag gives out at local armory but they will not go get it.. That would be shameful!
    Our National Income is 14,000 Billion. In 2014, the budget projects tax receipts at 3100B.
    That is a 22% Effective Tax Rate. That is why we rank third as Least Taxed in OECD nations.
    Let us build Industry not more Billionaires from gambling in America Derivative Casino.

  7. Goin' South

    Since this is still about health care, this is a little relevant.

    In yesterday’s thread, Lambert, you were quite skeptical that citizens could organize something like an electric or medical coop on their own. You insisted on examples.

    Here’s a nice little story from your own Maine. It tells how the citizens of Vinalhaven Island replaced a failing, privately owned electric utility with their own coop. Yes, the capital to build the system came from a Fed loan, but the organizing was all done at the local level, apparently focused in that great New England institution, the town meeting. This was after the idea percolated up through the coffee shops and hair parlors. (” forming an electric cooperative was as frequent a topic of public conversation as the wholesale price of lobster”)

    The real work of organizing the coop and filling out the loan applications was done by locals–for no pay I’m sure. Note the quote:

    “The boys who went to Washington to get that money, they really did a good job for Vinalhaven.”

    This happened not in the 30s as with most locales, but in 1983. Surely our democratic abilities have not deteriorated so much in 30 years that we can no longer accomplish something similar.

    This was the same way the water coop was formed where I grew up.


    1. lolcar

      The issue is not with the ability of a local community to organize hiring a doctor and provisioning a clinic. The issue is that 80% of medical costs are incurred by 20% of the patients. How do you organize an insurance pool of only a few thousand people? Why would the young people in the community pay equally into a common pool when thirty or forty years down the track they might have moved half way across the country?

      1. washunate

        Well said. I’m surprised that the basic costs of healthcare are so poorly understood. The vast majority of expenses are incurred by a small and mostly predictable group of people (in an aggregate sense – chronic conditions, age-related issues, lifestyle influences, etc.). Some unpredictable events that cause big medical bills, like car crashes, are specifically covered outside of health insurance.

        Without absolute guaranteed portability across both time and space, there is no reason for people who don’t need much healthcare today to pay for people who do need a lot of healthcare today via insurance policies; insurance doesn’t even make sense as a concept when it is fragmented in arbitrary 12 month periods.

        If all we’re talking about are basic preventive care (teeth cleanings, well women exams, physicals, immunizations, eye exams, etc.), then we’re not discussing the meat of the healthcare sandwich, so to speak – the multi-billion dollar hospital franchises and drug dealers.

        1. Susan the other

          And revolutionary research like stem cell treatments have been strangled in the crib. Gee, I wonder who the murderer was.

        2. jrs

          “insurance doesn’t even make sense as a concept when it is fragmented in arbitrary 12 month periods.”

          You’re on to something here, what good is insurance you may have put thousands upon thousands of dollars of your money into in your life and barely used, when it might not be there when you actually need it because you hit a period of unemployment? Something like that is not even worth of the rather debased term insurance, because it doesn’t even diminish risk adequately.

      2. Goin' South

        We are coming at this from completely different directions. You’re worried about creating a system that works to serve those already taken care of–the typical corporate employee who gets transferred around or switches locations to get a bump in salary.

        Most of the poor who are left without real healthcare don’t live that kind of upper middle class life where they head off across country to go to college, then hop around the country every few years because of corporate job transfers or headhunter calls. They are born, live and die in the same locale. They can’t afford to move.

        I’m looking at a system that leaves millions of those people out in the cold. Medicaid is a lousy solution that’s getting worse by the day. Obamacare is a nightmare. These systems are built to erect the maximum number of bureaucratic barriers to keep people out. When the sick come in the door, the response is “Fill out these forms” rather than “how are you feeling.”

        When it really comes down to it, the elites don’t want to provide medical care for large numbers of us. They aren’t going to let anything through that makes for real positive change for millions of us.

        If the political system at the federal level and most states is going to do nothing to help us get care, we must either suffer without or figure out some way to provide something for ourselves. Primary care would be a start, and that is something that is not beyond the realm of the possible with the combination of the coop model, an active local citizenry and health care professionals more interested in healing than profit. If some government agency existed to provide some start-up funds as the REA did for rural electrification, that would be great, but that may not happen. Alternative means may have to be pursued.

        And not everyone is so calculating as to worry about whether they’re getting the full bang for their buck of contribution at every stage of their lives. After all, the young have babies that require some level of care. Children need healthcare. Even the young can get very ill.

        Not all of us think like bean counters.

        1. Lambert Strether Post author

          No, not all of us think like bean counters. And some of us like to see concrete examples of success when a case for a policy approach is being made. I know I do, when life and death matters like health care concerned. One reason I think ObamaCare is immoral is that it’s a gigantic experiment on people’s health without their informed consent. You seem to be proposing a similar experiment, except with a different policy approach.

          So, as part of being informed, I’m asking a very simple question: Can you give me examples (apparently I have to say “in the health care field,” otherwise you’ll give me another public utility) where your approach has been tested and worked? If you can’t, I can’t imagine why anyone would give their consent to it. Alas, it’s not possible to perform an appendectomy or repair a detached retina with rhetoric or good ideas. How easy life would be if it were!

          1. Goin' South

            This conversation has gotten so reminiscent of this imagined dialog from Graeber’s “Fragments of an Anarchist Anthropology” that I couldn’t help quoting it here:

            “Skeptic (that’s you, Lambert): Well, I might take this whole anarchism idea more seriously if you could give me
            some reason to think it would work. Can you name
            me a single viable example
            of a society which has
            existed without a government?

            Anarchist: Sure. There have been thousands. I
            could name a dozen just off the top of my head: the
            Bororo, the Baining, the Onondaga, the Wintu, the
            Ema, the Tallensi, the Vezo…

            Skeptic: But those are all a bunch of primi-
            tives! I’m talking about anarchism in a modern,
            technological society.

            Anarchist: Okay, then. There have been all
            sorts of successful experiments: experiments with
            worker’s self-management, like Mondragon;
            economic projects based on the idea of the gift
            economy, like Linux; all sorts of political organiza-
            tions based on consensus and direct democracy…

            Skeptic: Sure, sure, but these are small, isolated
            examples. I’m talking about whole societies.

            Anarchist: Well, it’s not like people haven’t
            tried. Look at the Paris Commune, the revolution
            in Republican Spain…

            Skeptic: Yeah, and look what happened to
            those guys! They all got killed!”

            I don’t happen to view Single Payer as sacrosanct. There are lots of problems with it even if it were implemented, and I view the chances that it will ever become reality in the U. S. as very remote considering that a D President with the D House and 60 D votes in the Senate wouldn’t even allow it to be discussed. I don’t view it as irresponsible to criticize it and suggest other alternatives. In fact, it seems foolish to me to cling to that very far-off (at best) solution when so many need something now.

            I offered the REA example as a reasonable analogy since what was involved was communities getting together to solve what had previously been seen as an intractable problem–bringing electrical power to farmers. You first misconstrued the way the program worked, and I’ve offered a correction. Rather than acknowledging that you were wrong about the way rural electric coops worked, you’ve resorted to distorting my proposal, likening it to a “gigantic experiment.”

            All I’m advocating is that we try a coop approach in unserved communities.

            Otherwise, this conversation is getting very reminiscent of ones I’ve had with DK “handlers” trying to declare certain points of view out of bounds.

          2. lambert strether

            @GS Super. Listen, I’ll take a copy of Graeber’s book with me the next time I go to the doctor. Apparently, it’s good not only for the waiting room, but the operating theatre as well.

            Adding… “Sacrosanct” is straw manning. Single payer, in my mind, is a good policy that I can back up with evidence and show that it works. Where people’s health is concerned, that’s important to me. I understand your desire to use people as guinea pigs to test out vague anti-Statist theories that you can’t back up with evidence. I just don’t happen to view people as test subjects, that’s all. Your mileage may vary, and apparently does.

            And adding… Elsewhere on the thread people raise issues which imply your “test” isn’t ready for prime time. Have you considered addressing them?

          3. jrs

            Actually it’s always a tension I think. Activism on a large scale (I imagine that’s what we’re supposed to do to bring single payer about – although voting in Dem primaries might help if you actually have someone who is ammenable AND you can stand to be affiliated with that party at all – ie a registered Dem) or doing what one can locally? Get involved working to build a local farmers market or be an activist to change agricultural laws? Craft a zero waste policy working with city hall at the town level or oppose obama on keystone xl and climate change policy? The big picture in that particular case (it’s global warming, not local warming – haha) absolutely does need to be addressed of course. And all the while whatever you do, most people in the world will be free riders socially, and do nothing beyond their jobs and families.

          4. jrs

            Of course I think some people are going neither for activism (protests etc.) nor community building but rather just going for mass conversion on a broad level. The only point being to convert everyone intellectually to single payer (and then we’ll have it?). What if the people were already there?

            If you are a writer that’s what you do, so it is and so be it. It doesn’t really answer the question for most people who aren’t professional commentators: What should I do to change things? Because debating on message boards is more just playing around for most people than changing anything!!!

          5. Lambert Strether Post author

            @JRS I’m all for activism, which is why I highlighted fracking activism, carré rouge, Occupy, etc. all last summer with Campaign Countdown, and in Links when the story presents itself. However, I’m pretty bad at on the ground stuff. Not my talent. So cum grano salis whatever I say. There’s a lot of good activism on the ground: PNHP, Mad as Hell Doctors, nursing unions: All have activist components. The legislation and rule-making processes for the state exchanges provide excellent “hooks,” also news hooks. Letters to the Editor, believe it or not, are very effective, both for locals (who will congratulate you) but also for Congressional Offices.

            I’m not against co-ops, either. In fact, single payer should fund them! If and only if they can be shown to work. So far, there’s no evidence of that on offer.

        2. lolcar

          Whether or not the doctor is more interested in healthcare than profit, he/she IS going to expect to be paid. It’s hardly just “bean-counting” to ask how much, by who, and for what standard of care?

          1. ambrit

            Dear loclar;
            To mix it up a bit… Professions don’t have to be solely about the money. How about the German experience with teachers? The hook there is social status. In this example, status was disassociated from money and tied to professionalism. I believe Krugman blogged something about it once, about being Doctor Doctor Professor, or some iteration of such. Being recognized as a qualified professional was enough to lift the practitioner into a “higher” plane of social existence. Status counts in social affairs!

      3. Lambert Strether Post author

        One reason provisioning medical care is not like supplying electricity or water.

        So we can now cross all the public utility coop analogies off our list as evidence, leaving us with one big nothing-burger.

        Actually, to be fair, we have the argument that because David Graeber says no evidence (for the workability of non-statist medical coops) needs to be provided (here) because there’s just bound to be evidence somewhere. I find that a little meta, but YMMV.

  8. cupcake

    FWIW, thanks for the detailed analysis Lambert.
    Liked the ‘opt-in’/’opt-out’ explanation, and the related discussion of radio buttons and check boxes.

  9. washunate

    Keep up the excellent series. The irrelevence of ObamaCare will be seen increasingly clearly as it is forced to spell out details to actually do anything.

    Wealth concentration and quality healthcare are simply irreconcilable, diametrically opposed goals – you can only advocate one or the other.

    1. Lambert Strether Post author

      Thanks. ObamaCare is far from irrelevant, and I expect the administration to do whatever it takes to create the perception of success, at least in the political class; they’re good at that. But I think I can mark them up some, and maybe create some space for better things. TINA, always TINA. Until TIAA.

      1. washunate

        I mean irrelevant in the sense of actually addressing the major healthcare challenges in our society. I very much agree with you, it will be quite relevant for the political dog and pony show.

        After all, it’s already a resounding success. It passed. It exists. Laws have been amended. Box checked. W column increased +1. Website enhanced.



  10. Expat

    “Ha, ha, ha. The peons are so cute when they think ‘democracy’ exists.”

    There is not a piece of legislation written, a military base constructed, or a food stamp provided that is not somewhere, somehow designed to increase profits for a corporation or aperson. And I don’t mean the obvious, fortuitous beneficiary of a subsidy, a contract, or a purchase.

    Let’s not confuse capitalism and liberty. We have the former in heaps and less and less of the latter.

  11. ambrit

    How about a Nudgie Award for most pernicious political speech of the month, or week, or day. (I’d be fascinated to see how the ballot is structured.)

    1. Lambert Strether Post author

      @ambrit I like the Nudgie Award concept, for the most pernicious political speech of the month. (I think we’d have to restrict the field to higher-ranking members of the political class making speeches in major venues, though, and not go after some random assistant professor somewhere, the way the right often does). You could make a proposal in comment, and if there was enough collective enthusiasm in comments, I might color code it. (I say “might” — might — because those close readings take a ton of them, even they are fun to do). No shooting fish in a barrel, though! The obvious bullshit isn’t nearly as pernicious as the bullshit that’s conventional wisdom!

      1. ambrit

        One reason the Right is so successful is that they distort and take out of context as a rule. Agreed, NC isn’t an appropriate venue for propaganda, (huh!!??,) but a Bureau of Nudgeable Memes would be useful. With its army of Auto-bots to spread the good news far and wide, some traction can be gained. (Sort of like a ‘Hasbarists for World Peace’, if you will.)
        True, some discrimination is needed. Maybe not so much status of barker, but importance of subject. (I’m aware of the “Fuzzy Factor” in human communications. Such is life.)

  12. Susan the other

    Time for a nationwide sick-in. Let’s all suddenly get so acutely ill that we are squatting on the sidewalk. I’d love to watch the on-the-beat reporter try not to gag. And what a fitting comment this action would be.

  13. AbyNormal

    Thank You Lambert for the detailed opting insights.

    once again allow me to wrap my peabrain around this…we’re expected to make concrete decisions, while hunting a box to be checked or not, which will result in the welfare of our physical & financial lives, based on flawless accounting records from irs and our world class rating agencies…during some of the worlds most turbulent times

    Trees lose their leaves in blizzards like these.

  14. MLS

    Not to critique ObamaCare specifically, but it’s because of things like this why the right’s message of “smaller government” resonates with so many people. Our federal .gov has repeatedly shown themselves to be unable to perform many simple tasks (granted the above is not part of a simple task), or worse yet try and force fit a huge number of people into some standardized one-size-fits-all solution that is best for no one. The result so many times is a clusterf*ck of epic proportions. People have no confidence in a government that consistently warps incentives and drives unintended consequences.

    Reasonable people understand that there is a role for government and they do provide services that people value, but what bothers so many of these reasonable people is not some abstract concept of “less freedom” or “losing my rights” but the notion that they so often are force fed a solution to a problem that may or may not exist.

    1. Lambert Strether Post author

      I’ve had some success with non-ideologues by arguing that if you want a smaller state, the thing to do is end the empire and the security state that comes with it (on which both non-tribal/apartisan left and right agree), and that single payer (which handles, in essence, back office functions, as opposed to the NHS model) is something that a smaller state should do. If you can drag the discussion onto saving a ton of money and lives too, you’ve got a chance.

      1. MLS


        I’m with you on ending the empire and the MIC that comes with it, although there are legitimate issues to sort through: in many cases others (our allies) don’t have to spend on defense because we do it for them, essentially providing security on their turf. In a post-WWII world this made some sense as it prevented the buildup of another superpower, save the old Soviet Union. Today this is less of an issue as a stronger Germany or Japan probably enhances our security in their respective regions rather than pissing off our neighbors since we appear imperialistic.

        The other issue is that the DOD is like every other .gov agency – their power, influence and importance is determined by their budget, not the other way around. No agency head is going to accept budget cuts because it diminishes their power and authority. This is why you get $400 toilet seats and $80 hammers – that money has to get spent or it doesn’t get apportioned in the next budget.

        To be sure, these are climbable mountains, but the reality is that they are very difficult things to get through.

        The other main issue with a large government is that it makes co-opting by corporations a worthwhile endeavor and increases the odds of regulatory capture. With a smaller gov’t that doesn’t have it’s hand in so many industries, corporations might actually be forced to compete on their own merits rather than use the existing complex to extract rents from society. And make no mistake, a small government likely finds it easier to enforce laws and levy severe penalties for wrongdoing and negative externalities when say, Exxon isn’t paying your bills.

        1. lolcar

          The only reason corporations bother to try and co-opt the government is because it’s so big and powerful. Therefore shrinking the government will almost automatically make for more honest corporations and government officials – seems an iffy proposition.

          Government spending : Bangladesh – 16% of GDP ; Burma – 8% ; Cambodia, Guatemala – 14% ; Turkmenistan – 12%. Is it not worthwhile for corporations to co-opt government officials in these countries? The well-known corruption problems there suggest otherwise.

          1. MLS

            Broadly speaking you make a valid point but I’m not certain that comparing a host of third world governments to that of the U.S. in terms of cronyism is apt. I don’t have any unique insights into those countries you list, but I would submit that other institutions that are weak or lacking contribute greatly to the corruption you find there. Is there a well-defined legal system? What about property rights for individuals? Is any kind of patent system enforced? What about basic rights such as free speech and religion? Not that our institutions in these matters are by any means perfect, but they are better than most.

            That said, a small government by itself most likely does not ensure a reduction in cronyism, it probably has to be tied to things like meaningful campaign finance reform and term limits. There’s undoubtedly other elements that could help as well.

          2. lolcar

            I’m not certain that comparing a host of third world governments to that of the U.S. in terms of cronyism is apt

            You’re right. Direct comparison doesn’t make sense. Third-world countries typically don’t have the institutions that allow for somewhat honest governance in first-world countries. But it does show that a small government is just as co-optable as any other. As long as your government runs the police force and the army, it’s worth paying off. If you’re leaders can be be bought and sold, eliminating the Departments of Education, Transport, and Environment isn’t magically going to stop Monsanto from lobbying to make seed-saving illegal, to choose a random and particularly egregious example.

  15. Brooklin Bridge

    Sorry if this is slightly off topic, but I’m curious if anyone has heard anything more about Congress exempting itself from Obamacare.

    1. Lambert Strether Post author

      I haven’t heard anything more about it since that flare-up and the subsequent “Just a bureaucratic issue, nothing to see here, please move along.”

      1. Brooklin Bridge

        Thanks Lambert, I suspect if you haven’t heard – and I realize that’s not infallable, they are keeping it pretty quiet which stands to reason.

        Members of Congress want to participate in Obamacare just a little bit less than they are burning to come down with Herpes. And making that public by their vote to exempt themselves and their aids, especially if it was a secret vote that leaked, would go along way in instructing the public about the actual value of the ACA in general. Being aware of this, I imagine they are going to great lengths to secretly put as much distance between the disease ACA and themselves as they can.

        Congress’ actions speak far more eloquently than those who keep insisting that no one should knock Obama’s love child with fascism, or all the other wonderful things he has done where we have to fight back tears of pride such as warrantless assassinations, .

  16. casino implosion

    Christ…all this cass sunnstein nudging is going to end up making me a libertarian.

  17. dbak

    Once upon a time this used to be an interesting site. Now it seems to devolved into a bash Obama at every opportunity. Every new program that helps the poor and the needy is nitpicked to death. I don’t know how well Obama care will work, no doubt there will be many tweaks required. But the commentators here seem determined to bury it before it even has a chance to get off the ground.It would be interesting to know how many of the naysayers here have health insurance. If they have had to survive without any they might not be so cynical. There is an old saying ” The perfect is the enemy of the good” This program is unlikely to be perfect but for the many who have no insurance at it will be a definite improvement. Let us not forget There are those that have a vested interest in seeing it fail. It shouldn’t be hard the the brilliant minds on this site to figure out who they are. For your imformation I do have a very good health plan but every year the premiums go up sharply.

    1. NotTimothyGeithner

      Could the DNC send better Obots?

      As far as “off and running,” Barack Obama took office in January 2009 with a historic majorities and a mandate to present a radically different version of healthcare. He’s had long enough.

      1. washunate

        It is humorous how bad the pep rally has become.

        But I do see this as progress. When the best defense of corporatist Dems is that we don’t know how well their programs will work six years after they ran for President, I figure we must be getting closer to some event horizon where something has to change about our political system.

        Just hopefully it is change for the better.

    2. Lambert Strether Post author

      Thanks you for sharing your concern. How does the post “bash Obama”? Well, except for documenting the minor problems he has with truthtelling.

  18. Super Cynical

    A. Jolie isn’t concerned about Obamacare, she’s wealthy enough to comfortably removed her tits according to genetic odds. And since no one will confuse the cost of her tit removal with “being on the dole”, our corporate owned Government continues to rule unthreatened, and really doesn’t care if you live or die. They’ll gladly throw you from your houses while announcing “programs”. Block you from the hospital too with fine print. Designed to partially fail for profit, that’s Obamacare.

  19. Jim S

    Lambert, I’m grateful for your careful analysis.

    Reading comments I see the speculation about price lock-in, but don’t see the link–maybe it’s intended as a means to catch and fine non-participants who have failed to file taxes for a year(s)?

    1. Lambert Strether Post author

      I don’t think there’s a commitment to price lock-in, but that’s not the same as a commitment to program lock-in. I think for public relations and to get people invested in the choice they have made (this is another nudge thing), the 5 year lockin is enough.

      1. Ms G

        Price lock-in would not be consistent with how Insurance Companies profit mission, which is “growth,” i.e., prices must always increase because that’s where the rents come from and that’s what gets “grown.”

        Thus, I would be that there is (1) no price lock-in as a quid pro quo for the “consumer’s” 5 year commitment and there is (2) au contraire, the unilateral right of the insurance company to increase rates, deductibles, copays, change what’s covered (decrease it, that is). Just like credit cards can change their rates at any time for any reason — and the “exchange” policies are graded like credit cards: Loser Bronze, Silver, Gold, Platinum, etc.

        It would not surprise me that the Insurance Companies have already had discussions with CMS/HHS and Obama that they want the 5-year commitments (secured by whatever sleazy means necessary, including but not limited to, “opt-out” features) with full freedom to jack up rates etc.

        Readers, please correct me if this is off the reservations and you’ve heard otherwise.

        1. skippy

          All contracts are renegotiable from a position of power, the very fact, that this abortion of a social contract has been shoved down the citizens gob, is indicative, in light of the industry’s machinations, a sign of things to come.

          skippy… idioms pathos precludes any other alliterative~

  20. Ep3

    Wow yves. When’s it gonna stop? Will there ever be anything Obama won’t do to reward the rich? Every day you report a new post about how lower he sinks. He is just downright evil. And I hope history is smart enough to gloss over him (except for that all holy asterisk his finance lords wanted: ‘first black president’).

  21. dbak

    Lambert calling anyone who disagrees with your constant criticism of anything the president does an Obamabot demonstrates an inability to view issues in a rational way. For your imformation I did not vote for Obama in 2004 as I viewed him as too inexperienced. The facts of life are this, as I have learned over many years, rarely do we get the ideal choice we would prefer when we vote and must choose the lesser evil. What are the the other options might we have? It is easy to be critical, but unless you have a better idea that is possible to achieve quit the name calling and try to look at issues from all sides.

    1. AbyNormal

      what? are you on dailup??…takes 2 min. to create a blog, which ‘should’ have enough self-storage for your awe inspiring ego.

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