Both pieces openly acknowledge what the liberal side has been saying for a long time — that Obamacare is a three-legged stool, and that you can’t keep the pre-existing-condition regulations (“guaranteed issue”) without keeping the rest. Klein and Suderman then, fascinatingly, land on conclusions exactly opposite to the ones that liberals would land on. Both Klein and Suderman would do away with guaranteed issue, community rating, and all the rest. They would then replace Obamacare with catastrophic insurance, health savings accounts, high-risk pools, and so forth. Fundamentally, they don’t view health care as a human right, and they don’t believe that government has any business getting involved in the insurance market. If you start from those premises, you’ll likely end up where they do.
You get this sort of clarity from op-ed writers, but not from elected officials. I would posit that that’s because the moral basis of Obamacare is in line with most Americans’ values: most Americans would, I think, agree that you shouldn’t be denied care just because you had a pre-existing condition. (A close friend’s son had open-heart surgery very early in life — I want to say before he turned 2 years old. Do we want him to be uninsurable for the rest of his days?) Having granted this premise, elected officials can either give Americans something in line with their moral values — that is, Obamacare or stronger — or can do what writers at Reason would find congenial, tear off the Band-Aid, and give them health care that’s stingy and (by most Americans’ lights) immoral. It’s no wonder that conservative politicians hesitate to take the orthodox-economist position; or, having taken it, refuse to admit that that’s the position they’ve taken. The BCRA can only pass most Americans’ moral muster under cover of darkness.
Parts of the orthodox-economist position are in line with wonky liberalism. Suderman, for instance, writes that the tax deduction for employer-sponsored health insurance “is the original sin of the United States health care system,” and is “[w]orth more than $250 billion annually.” Many liberals would love to get rid of it; I certainly would. There’s a liberal case against it: it’s regressive, and it makes a dollar of health insurance worth more than a dollar of salary, with the predictable effect that employers pay less in salary and more in health insurance. (I’ll look around for research on how much of Americans’ well-documented wage stagnation can be explained by this tax preference.)
The much-maligned “Cadillac tax” in Obamacare sought to do away with this regressive tax expenditure, albeit stealthily. High-value employer-based health-insurance plans would be taxed, and the definition of “high value” would not be adjusted for inflation. So over time, more and more health plans would be subject to the tax. The dream was that high-value health plans would slowly fade away and salaries would rise; we’d take away with one hand (the Cadillac tax) what we gave with another (the tax deduction).
I have no problem granting that this is ugly: to correct one tax sin, we create another. It’s the embodiment of a libertarian parody of how government works. While granting this, I’m sympathetic: politics is the art of the possible. My liberal dream also collides with the art of the possible: I’d prefer something akin to the Canadian system or expanding Medicare to everyone, or expanding the VA hospital system to everyone, but those are also not yet possible. We take what we can get for now.
In any case, it doesn’t matter: the Cadillac tax was unpopular with everyone, including labor unions. Orthodox economics runs up against the art of the possible.
I’m happier with a discussion centered around the Philip Kleins and Peter Sudermans of the world than I am with one centered around Paul Ryan and Mitch McConnell; at least the former are more honest about what they want. Though this, from Suderman, is misleading:
Medicare, meanwhile, offers a huge system of federal benefits to older Americans that typically run far beyond what most have paid in. Its introduction was associated with explosive growth in hospital-costs inflation during the 1970s.
That was absolutely true about Medicare … in the 70s. It’s not true anymore. The keyword you want to Google for here is the “prospective payments system”. See this review from the Centers for Medicare and Medicaid Services, for instance. Suderman has better arguments than this; I wonder why he chose to use a poor argument there.
Obamacare featured lots of experiments to control costs, including the Independent Payment Advisory Board, which Sarah Palin famously derided as “death panels”. It’s somewhat isolated from the political process, presumably because politicians realize that doing what’s right will often be at odds with what voters want.
I don’t believe, though, that any number of experiments in cost control will sway those of a libertarian cast of mind, because I believe we’re fundamentally having a debate over values rather than one over implementation details. I’m happy that those values — the desire for universal coverage against the belief that health care should be treated like any other market good — are out in the open. Let’s argue it on those moral grounds.