President Obama to Set Rules for Health Insurance Companies And

Taking his health care reform push to the real world, President Obama hits, campaign-style, stops in Bristol, Virginia and Raleigh, North Carolina, in red states he turned blue last Fall.

Today he will outline eight specific consumer protections that he wants to be part of reform:

• no discrimination for pre-existing conditions,
• no exorbitant out-of-pocket expenses,
• no cost-sharing for preventive care,
• no dropping of coverage for serious illness,
• no gender discrimination,
• no annual or lifetime caps,
• extended coverage for young adults, and
• guaranteed insurance renewal.

Have you had problems with your insurance companies? Let us know what your experiences are below.

One of the most appealing arguments for government health insurance is the perception that it's "a sure thing." No matter how powerful reputational incentives are, a private health insurance might go out of business, or fall into the hands of a myopic CEO. With government health insurance, on the other hand, you know that you're covered, right?

This is a prime example of what psychologists call a pseudocertainty effect. Tversky and Kahneman originally explained it using two hypotheticals (my paraphrase):

Hypothetical #1: You play a two-stage game. There is a 75% chance that the game ends in stage 1 and you win nothing. However, if you make it to stage 2, you get to choose between $30 with certainty, or an 80% of $45.

Hypothetical #2: You choose between a 25% chance of $30 or a 20% chance of $45.

Most people take the first choice in Hypothetical #1, and the second choice in Hypothetical #2, even though they are mathematically identical. T&K's explanation: Hypothetical #1 looks better due to a "pseudocertainty effect." People are misled by the fact that the P(A|B)=1, even though B itself is far from certain.

What does this have to do with health care? Well, government health care is a sure thing conditional on (a) getting high-quality care for (b) a treatable ailment (c) in a timely manner (d) without getting a secondary infection... etc. In other words, like private health care, government health care isn't a sure thing at all.

Now you could object, "It's not about a pseudocertainty effect. It's about a higher likelihood of good health with government health insurance." If you go down that route, however, you've opened yourself up to a barrage of tough questions. What evidence is there that government health insurance raises life expectancy - or any other major measure of health? Even if it does, is the extra cost worth it? As Tversky and Kahneman showed, people will pay a lot to go from near-certainty to perfect certainty. They're far less eager to pay an arm and a leg to go from a 45.3% chance of living to 80 to a 45.5% chance living to 80.

My point: While "certainty" is of the most appealing arguments for government health insurance, it's silly. But if proponents stop using it, it's going to be a lot harder to win over public opinion. It's a choice between persuasion and honesty. Take your pick.