Life after Obamacare

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Protesters against Obamacare

The American health care system has been at the center of political debate for roughly three score years and ten – the Biblical lifespan. Today’s debate is thus very much one that has outlived itself.

Most presidents since Harry Truman made healthcare-for-all a major objective. Lyndon Johnson, in the face of vehement opposition from conservatives like Ronald Reagan, delivered a scaled-down version – covering just the elderly and poor children – in the form of Medicare and Medicaid, respectively. By 1992, Americans were demanding relief from a system few could afford, so President Bill Clinton decided to make it his first major initiative. Led by his wife, First Lady Hillary Rodham Clinton, this did not end well – but it did largely end the debate for years. Finally, the 2008 presidential contest revolved around promises to solve these problems once and for all, and what eventually became known as “Obamacare” emerged as the first, and defining, legacy item of Barrack Obama’s tenure.

Republicans have spent virtually every minute since attacking it and campaigning on a pledge to repeal it.  Now, they finally have their chance. Despite having passed legislation to repeal Obamacare roughly 50 times (each one predictably vetoed by Obama), Republicans have found it surprisingly difficult to do so now that they actually can. 

In a sense, this is hardly shocking: healthcare is incredibly complex – a fact that comes as a surprise to noone except, apparently, President Donald Trump. The industry consumes one-sixth of the nation’s economy. American healthcare is intensely focused around expensive technologies and drug therapies. Few Americans pay for the bulk of their care or understand either the coverage or the care they’re purchasing or need. There’s no real logic to the system that’s evolved. And, meanwhile, it’s literally a matter of life and death.

Nonetheless, you might think Republicans could actually do what they’ve been promising for nearly eight years. The problem is that what the GOP actually cares about is inconsistent with what voters – even their voters – actually want: that Obamacare repeal is really entirely about providing the funding to enable Republicans to enact a massive tax cut for the wealthy has been an open secret since Trump blurted it out early in his tenure. In order to come up with that kind of money, the government needs to stop paying for healthcare for a lot of people – over 20 million Americans, in fact. It’s easy to see why this trade-off is one Congressional leaders are eager not to make explicit.

No matter how little the current version of “healthcare reform” is really about healthcare, however,  that doesn’t change the fact that it will have dramatic healthcare effects. So, it’s worth discussing not just the GOP’s real agenda – tax cuts for the wealthy – but also its healthcare agenda, because it certainly has one.

There are two very different, though inter-related, issues in healthcare reform: affordability and access.  The former involves restructuring a massive portion of the economy in a highly technical field so that more Americans can get what they need better than they do today, at lower prices. The latter – since, no matter how efficient and low-cost you make it, some people still won’t be able to afford care – is a relatively simple issue of subsidization and income redistribution. Republicans have spent eight years exploiting the unsatisfying nature of the former to attain their real goal of dismantling the latter. They could easily do so with only minor tinkering to the larger reforms that involve the middleclass (such as protecting people with pre-existing conditions), but, so far, the ideological purists amongst them have insisted that simple repeal doesn’t go far enough.

What really exercised most Republicans about Obamacare (other than Obama) was its expansion of Medicaid, the program for the poor, and asking the wealthy to pay for it. But setting aside Republican aversion to making the rich pay for anything, principled conservatives have an ideological aversion to anyone’s healthcare being paid for by someone else.

If a third party pays for something, then the actual consumer will buy more of it, and spend more on it, than otherwise. This is, in theory, economically inefficient. It also allegedly makes people irresponsible in their purchasing, dependent upon others, and likely to grow hair on their palms. In fact, conservatives seriously interested in healthcare  don’t even like private insurance – people banding together to lower their collective risk – because, well, it means people banding together, acting collectively, and thus leading inexorably to Bolshevism. Thus, there are for many principled conservatives deep philosophical reasons for wanting to roll back not just Obamacare but also Medicaid, Medicare, and, in fact, the entire edifice of health insurance, public and private, that’s been erected since World War II.

This morass originates in an historical quirk. A century ago, health insurance was a small-scale, isolated experiment, intended to make it possible for working people to obtain care, and doctors to get their business, without running up bills patients couldn’t afford to pay – something like what we’d recognize today as catastrophic coverage. But the vast majority of Americans remained without much care, or coverage.

During World War II, however, the federal government decided to treat employer-provided health insurance unlike wages, as neither taxable nor subject to wartime wage/price controls. This created an artificial incentive for provision of health insurance through employers – a situation so understandably popular, though illogical, that it has persisted to this day and is virtually unrepealable.

Yet serious thinkers on both ends of the ideological spectrum recognize it as problematic. For liberals, an employer-based system leaves many – especially with lower incomes – uncovered, while locking others into jobs they might otherwise leave, simply to retain coverage. To conservatives, it puts employers on the hook for health care costs and leaves consumers without meaningful price signals so that health care is overconsumed and over-expensive. The Republican solution – at least, for those genuinely concerned about improving health care and not just gutting it – is to go back to an entirely free market or, in lieu of anything that extreme, at least reduce government regulation so that more insurers can sell more insurance options to more consumers. This would indeed, as conservatives claim, produce more affordable policies – but it would do so by permitting policies that cover very little. Republicans tend to believe that that should be up to you, however, and if you make a bad purchase, well, that’s the price of freedom.

Democrats, in contrast, tend to see healthcare as not like any other market good because most people aren’t really in a position to judge which treatments they should be purchasing and, besides, it’s one thing to say you forego that million-dollar private jet if you don’t value the convenience that highly, and another thing to say you can forego that million-dollar procedure because you (or, more likely, we) don’t value your life that highly. That’s why liberals believe we need government to step in and remedy the failures of a “market” that can never be a real market – and to ensure some minimum level of care for everyone.

Obamacare was thus a compromise from the liberal perspective. A probable majority of Democrats, and certainly the party’s base, favors a European-style single-payer system, in which government supplants the private insurance market. Obamacare, however, not only retains private insurance but basically uses the government to support it. Now, Republicans – through eight years of unrelenting assault on Obamacare’s government-aided market and then proposing the destruction of health insurance as most Americans know it – are leaving the liberal dream of single-payer as the Last Man Standing.

There are other alternatives, however, that better reflect the direction the world is headed – one of weakened states where other entities, including businesses, provide more and more of what used to be thought of as government services. Healthier lifestyles would do more to improve health and prolong life than the far more costly medical interventions the American healthcare system tends to favor. Health insurance – which now more resembles pre-paid phone plans or all-you-can-eat buffets than true insurance – could be reformed to encourage better results, cheaper and more efficacious preventive care, and evidence-based treatment – and many private organizations, both for-profit and nonprofit, are beginning to do so on their own. In short, the market actually could provide the solutions the country needs – although it could probably use a little government impetus to do so (including competition from a so-called “public option” insurance plan).

But in today’s polarized either/or environment, both parties are locked instead in a duel to the death between a pre-20th Century vision of a market unpoliced by government and a mid-20th Century vision of government supplanting the market. This is, in short, the last great battle of the 20th Century.

It’s fitting that this final life-and-death struggle between the welfare state and its discontents is being fought over life and death. But, whichever side prevails, the outcome will probably turn out already to have been dead on arrival.