The reactions to the problems with the website for the
health insurance “exchanges” or “marketplaces” set up by the federal government
for the majority of states which decided not to set it up for themselves are
not surprising. (The websites for the marketplaces set up by states and the
District of Columbia are, according to press reports, operating much better
than the federal website.) The Democrats are very concerned and worried; some
are quite critical of the Administration; and they want this fixed as soon as
possible. The Republicans are saying that the problems with the website are
evidence for their contention that the Affordable Care Act (“Obamacare,” though
I will refer to the law as “ACA,” which is a less politically charged term) is
way too complicated, that the Administration is incompetent, and that the law
will collapse of its own weight because the financing is based on too rosy
assumptions and because the ACA is an inherently flawed restructuring of the
U.S. health care system. Some go further and use the website’s problem to
rift on the failure of liberalism or, in
a remarkably stupid article, “progressive government.”
The Democrats’ reactions are natural and understandable. I
will focus in this post on the Republican’s reactions and attacks on the ACA
and argue that they are disappointing, demonstrate a bankruptcy in policy ideas
and proposals, and, unless most everything goes terribly wrong with the ACA
over the coming year, are not helpful to the Republicans politically. Republicans
should be offering creative ideas to improve the U.S. health care system while
preserving the role of private insurance companies. It is interesting in this
regard that the current complexity charge the Republicans throw at the ACA help
make the case for a single-payer system (essentially some form of Medicare for
everybody), which some Democrats would prefer. In other words, Republicans
should be wary of an ACA failure, since this would increase the probability
that the U.S. will eventually adopt a single-payer system. What the Republican
attack on the ACA fails to take into account is that the health care system in
the U.S. prior to the law’s enactment was unsustainable. The U.S. was (and is)
paying more per capita on health care than other industrialized countries,
while not covering everybody and achieving poorer public health results. In
addition, though it has come down recently, health care inflation has been too high
and an aging population means more demands on the U.S. health care system.
While one can criticize the ACA – it is far from perfect – the status quo ante
is not an option, but many Republican are giving the impression that this is
what they want. One who does not is Michael
Gerson, but the sketchy idea he proposes, health insurance vouchers for
everyone, is far from a fully thought-out proposal.
The ACA can be fairly attacked for not doing enough to
contain the cost of health care. Republicans who do that use this to make the
case that the ACA is too expensive, and, therefore, should be repealed. They do
not offer proposals about what to do about the cost of health care and it is
far from transparent pricing practices (for example, see Steven Brill’s long
March 4, 2013, Time article, “Bitter
Pill, Why Medical Bills are Killing Us”).
Perhaps Republicans think that market competition alone will solve
this, but it did not under the health care system existing prior to enactment of the ACA. Further, they fail to acknowledge that part
of the reason for the excessive cost of health care in the U.S. is the much
higher administrative costs here than in other countries. Part of this is due
to the overly complex billing system and the need for health care providers to
deal with multiple insurance companies and policies with different coverages
and allowances. Some standardization among insurance companies and policies
might help in reducing administrative costs.
Another blind spot of Republican is that they seem to worry
about costs only when it is the government that is footing the bill. However,
excessive health care costs are a problem whether it is paid for by private
insurance and patients or is paid for partly or completely by the government.
Even if one does not believe that affordable basic health care should be
something a country as rich as the U.S. should provide all its citizens one way
or another, one needs to concede that excessive spending on health care is not
conducive to a well-functioning economy. Society as a whole is paying the
health care bill, regardless of government involvement.
Also, it is clear that there is no perfect health care
system and that there will always be complaints. For example, after World War
II, the government of Clement Attlee set up a health care system in Britain which
is probably the most socialist of the major industrial countries. I took the
opportunity while traveling in England a few years ago of asking people what
they thought of the National Health Service. Though the people I talked to were
hardly a representative sample, I received a variety of responses ranging from
highly positive to quite critical. (For those with the means, there is option
of paying for supplemental private health insurance, which apparently can mean
less waiting time to see doctors.) However, that the country as a whole is
proud of the NHS was made evident during the opening ceremony of the 2012
London Olympics, in which it was featured.
Now, the NHS is not a model for the U.S.; it is not
compatible with our political culture. There are other options. While no option
will please everybody, it is necessary for the U.S. health care system to be
fixed, both to be true to our values of compassion and fairness and to mitigate
a growing burden on the economy.
While today’s Republican Party gives the impression,
sometimes explicitly and sometimes implicitly, that they do not consider
compassion and fairness as appropriate goals of government, it is somewhat
surprising that the party seemingly does want to address the economic
implications of increasing health care costs, especially if this means more
government involvement. In fact, some in the party are desirous of making
Medicare less generous because of its costs, but reducing Medicare expenditures
by raising the age of eligibility may not reduce total health care
expenditures. In fact, it may increase them because Medicare apparently has
been better at keeping the prices in pays health care providers in check than
private insurance companies. Republicans should not ignore that excessive
spending on health care by society as a whole is excessive spending on health
care, no matter who, in the first instance, is doing the spending or how it is
financed.
There is a consensus that the House Republicans made a mistake
by adopting the strategy of its Tea Party faction in shutting down the
government and threatening a government default if they did not get their way
in defunding or delaying provisions of the ACA. While there is less of a
consensus on the current Republican strategy of attacking the ACA, the
persistent negativity is also a political mistake. Michael
Gerson is right about that. Now that the Obama Administration and Congress
have used ideas, including the individual mandate, originating in conservative
think tanks and implemented in Massachusetts with the support of then Governor
Mitt Romney, the Republicans are not advancing any proposals to fix the health
care system. They are apparently betting on the ACA’s collapse as a way to win
back the Presidency and both houses of Congress. Even with the website
problems, that is likely to prove to be a bad bet. Some important aspects of
the ACA, for example, those involving pre-existing conditions and increasing
the age for which young people are eligible to be covered on their parents’
insurances are popular. No doubt the insurance subsidies to those who qualify
will also be popular. And, as pointed out in the New Yorker, contrary to Republican
claims, the ACA in fact benefits many small businesses by lowering their health
insurance costs and promotes entrepreneurship, since leaving a job to start a
small business does not mean losing access to affordable health insurance.
Republicans should favor that.
When I worked at Treasury, some of the political appointees
there would sometimes cryptically say that you can’t beat something with nothing.
As a purely political matter, the Republicans should develop sensible health
care proposals that they can sell. Being in favor of the status quo ante is
both bad policy and bad politics. Perhaps due to their frustrations and their
internal problems, that seems to be the Republican position. A political
strategy which can only possibly succeed if there is a near-term collapse of
the ACA, and maybe not even then, is symptomatic of larger problems the
Republicans have in defining themselves in a way palatable to the American
electorate.
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