Anybody who says they know how this thing is going to play out is unbelievably full of shit. Seven months is a long time in politics – seven months ago, we were just coming off the August recess and the meme was taking hold that a passel of sign-wavers with guns were somehow representative of “real America.” I don’t think anybody anticipated that things would go down the way they have.
So after a year of wrangling, we have a bill that’s more or less along the lines of the Nixon proposal from 1974 – which Democrats, egged on by unions, turned down in the expectation they could get something better after the elections. Of course, the denouement of Watergate and the Ford interregnum (Whip Inflation Now!) pretty much put things on turbo-puree to the point where nothing ever moved again on large-scale health reform – sure, there was COBRA and cat-health and some nibbling around the edges, but it didn’t come up again until the Clinton effort in 1994. Which failed pretty spectacularly, putting things on hold for another sixteen years. Looking back at the health program Roosevelt ran on in 1912, or the health package cut from Social Security at the last minute in 1935, one gets the general impression that you can only do something really big every fifteen to twenty years, and you might not get it. Medicare wasn’t exactly a landslide, and the party that then decried it as a slippery slope to socialism is the same party now campaigning against Obama’s bill because it might threaten Medicare.
David Frum nails a lot of this in his own blog. In the absence of any other leadership following the 2006 and 2008 meltdown of the GOP, Republicans have essentially turned to their noise machine to lead them. The flaw in this, of course, is that the needs of talking-head blowhards are substantially at odds with the needs of a practicing party-in-government. Which means that instead of negotiating to drag the bill in a better direction, the Republicans in Congress were bound to a strategy of scorched earth. And the more the rhetoric ramped up, with its socialism and death panels, the more they were locked in – as Frum said, “How do you negotiate with somebody who wants to murder your grandmother? Or – more exactly – with somebody whom your voters have been persuaded to believe wants to murder their grandmother?”
Right now, I daresay that the vast majority of people wailing about their defeat – or crowing about their victory – have absolutely no idea what’s actually in this package. Which is not surprising – most of the last three months’ worth of screaming has been about various aspects of Congressional rules and process that are like Etruscan calculus to people whose civics education ended with “I’m Just A Bill.” But the general outline is pretty logical, so try to keep up:
* All insurance relies on more people buying it than using it. The larger the pool of insured people, the cheaper the overall cost to the insurer.
* Insurance presents a paradox, in that insurers make a profit by NOT providing the goods or services for which they charge.
* Therefore, insurers have every incentive to find all possible means of not providing those goods and services. In the health insurance field, this generally revolves around exclusions for “pre-existing conditions” – which have in the past included the likes of pregnancy or domestic abuse.
* Insurance companies, therefore, require a non-market force (i.e. the government) to ensure (ha!) that they will deliver goods and services for which they are paid.
* However, requiring insurance companies to cover everyone no matter what creates a perverse incentive; i.e. nobody buys insurance until they become sick, which destroys the large pool of insured people we mentioned above.
* Consequently, if you’re going to insist that everyone have coverage, you’ve got to make sure they get coverage. In a genuinely government-run system, this would take the form of single-payer insurance. To wit: everyone gets insurance, and pays the government for it via taxes. In a non-single-payer system, this means you are obligated to obtain insurance from somewhere.
* If you have a job with health insurance now, that’s where you’ll get your insurance. If you have Medicare, that’s where you’ll get your insurance. If you are not getting your insurance that way, and you’re not sponging off your folks, you now have to buy some insurance. This is butt-expensive in most cases, because of all that business about pre-existing conditions and the size of the pool.
* So the next step is to maximize the buying power of these folks. This is accomplished through the “health exchanges”, which is a fancy term for “making a big pool.”
* For insurance companies, this big pool represents a whole bunch of potential new customers.
* For said customers, this pool gives them the same purchasing power as a big corporation has; they have more programs to choose from and said programs will probably cost less than if they were out on their own, thanks to the negotiating power and economy of scale that comes from a large pool.
These three things – a coverage mandate for insurers, a purchase mandate for the insured, and a mechanism for maximizing the market interaction between the two – are at the core of the reform effort. It’s the same thing that passed a few years ago in Massachusetts under that wild liberal Mormon, Mitt Romney (and Multiple Choice Mitt is running like hell from it with the Invisible Primary only months away). It’s also damn near the only way to get at universal individual coverage without actual government-provided insurance.
Now, there are other things that can come into play here – for instance, selling insurance across state lines. But when this happened with credit cards, all the providers moved to the states with the least restrictive regulations, which is why your credits cards all come from Delaware or North Dakota and charge you ricockulous interest. I suppose you could sell across state lines if you had some overarching federal regulation, but I’m not sure how much of that is in the current package. There’s also the notion of a “public option” – allowing people to chose Medicare or some other government-provided insurance as one of the competitors in the exchange. A lot of people considered such an option to be necessary to put real cost-control pressure on insurers. A lot more considered it to be the camel’s nose under the tent for an actual government-run single-payer system. Whether this is a good or a bad thing largely depends on whether you are a teabagger or a dirty fucking hippie.
Notice that most of what I’ve said has been about availability. Actual cost is another barrel of bourbon altogether. The big expenses in this scheme mostly revolve around providing subsidies to people who are now obligated to buy insurance, which more or less boils down to an expansion of Medicaid. The funding mechanism seems to be a general tax hike on some folks who can probably afford it (especially after twelve years of the Bush II tax relief) and, more controversially, a tax on certain big-ticket health plans which heretofore have not been treated as income (much to the chagrin of unions who negotiated such packages in lieu of pay hikes). But even this is more about the cost of the insurance, rather than the cost of the actual care.
I think the thing most people are counting on is that if everyone has insurance, they will actually go see the doctor before things get to the point where they wind up being wheeled into the emergency room with an exploded ventricle. It’s a hell of a lot cheaper to tell somebody their cholesterol is 224, outline how to change their diet, and maybe prescribe some statins or something, if the alternative is to do nothing and then try for a balloon angioplasty and triple-bypass fifteen years down the line (with corresponding inflation to match). This is probably why you see a lot of talk about “bending the curve” rather than “slashing costs,” especially since one of the biggest cost-reducing moves would be to just sign everyone up for Medicare and do away with all the redundancy and administrative overhead of a hundred different insurance companies.
But that’s the course we’ve taken: a plan that was literally Nixonian thirty-six years ago is now at the left edge of what can get through Congress. Which in itself is a remarkable thought, especially since the current opposition to the Obama health care reforms stems almost entirely from the Nixon-era “Southern Strategy”. It’s not the least coincidence that the opposition comes freighted with racial code-words (if not outright epithets*) and the language of violent rebellion; the Tea Party movement is the last gasp of the same forces that propelled everyone from Tom Watson and Cotton Tom Heflin to George Wallace and Orval Faubus. The same South that was a third faction, passed to Democrats in 1876 and on to Republicans in the 1960s, is now the Republican party in name and practice – and they bet everything on stopping Obama. The actual content of the plan was never relevant; all that matters is that Obama has to lose. Like I said, nobody knows what the next seven months will bring – but if the Republicans fail to capture at least one house of Congress in November, they will have to think long and hard about the fruits of being the party of the Confederacy.
* The word is “epithet,” meaning “an adjective or descriptive phrase expressing a quality characteristic of the person or thing mentioned; such a word or phrase as a term of abuse.” The word is not “epitaph.” But then, I woudn’t expect mental defectives** like Karl Rove or Michael Steele to grasp the difference.
** That was an epithet. Learn, morons.
