Wednesday, September 16, 2009

Have the Democrats Outsmarted the Republicans on Health Care?

In their attempt to defeat Obamacare, Republicans have focussed their criticism on the public option, painting it as the most objectionable feature of existing proposals. Senator Max Baucus, Democrat of Montana, has now proposed a plan without the public option. This leaves the Republicans in an awkward position, especially since Baucus's plan is projected to cost less than earlier proposals. If Republicans oppose the Baucus plan, they surely risk the ire of voters who will be told during the mid-term elections, "The Republicans blocked a plan that would have covered the uninsured and reduced the deficit."

The problem is, the public option was never the crucial issue; instead, it was the mandate to purchase insurance. Once government mandates insurance coverage, it gets to define what constitutes insurance, which means it can ban pre-existing condition clauses and the like. The mandate also"justfies" large subsidies for insurance, to avoid non-compliance with the mandate. So, an individual mandate, which the Baucus plan includes, implies a rapid takeover of the entire health care system by the federal government.

Something like the Baucus plan will pass. It will either cost far more than existing projections, if government administrators fail to impose the restrictions on reimbursements that generate the projected cost savings, or it will involve massive rationing of care.

The Democrats played it perfectly. The Republicans got sucker-punched.

77 comments:

Michael Kitchens said...

Professor Miron-

You seem to be always spot on in your analyses. Here again, you accurately point out that the Republicans have been paying attention to details about the bill (albeit, important ones), but fail to hit the critical issue.

You suggest that "the public option was never the crucial issue; instead, it was the mandate to purchase insurance." Therefore, if a plan-- like the Baucus' plan that has no public option--is presented, the Republicans will be backed into a corner.

I would raise this question. What if a plan is then raised that eliminates your proposed crucial issue (i.e., no mandates to purchase insurance)? (Now, I know this may be unlikely).

My point is that I think the issue is far more basic than that. A free society should not have their money taken away and redistributed to others. While President Obama claims that the public option will be self-sustaining, it is unlikley to be the case. I don't believe there is any gov't program that is not subsudized by taxes, special loan rates, and/or monopoly power. The basic issue is that gov't should not be in the insurance game--period. Much of the high cost of insurance is because of gov't regulation (e.g., mandates on what an insurance plan has to contain, no purchases of out-of-state insurance).

As always, you provide a compelling argument, and in this case you are right. I just believe that the issue is more fundamental than you suggest.

Thank you for your time in posting an interesting read every day.

Jon from Bkln said...

I agree with Mr. Kitchens. I would take it further though. Why mandate emergency room care? That's where all the money goes. Why should my hard earned money be spent on treating a sick immigrant from Guatemala? In a free country (where everyone pays their own way), I should be able to keep my money and the Guatemalan should have to pay for his own medical care. If he can't pay, he dies. That's life (or in this case, that's death). I challenge anyone to find a flaw in this argument.

Michael Kitchens said...

Hi Jon... I too would agree that ALL the ways in which the gov't takes from you to give to another is inconsistent with a free society and immoral. So, in turn, I would agree that mandated emergency room care, which as you say is a large cost, is inconsistent with a free society.

If I could follow-up your comment, though, I would just emphasize the MANDATEd emergency care is what I would oppose. Somtimes, proponents of gov't run health care assume that opponents want to throw out the sick and lame in the street because they can't afford it. I am an opponent of gov't health care, but I don't want to leave the sick and lame to fend for themselves. I just think that there is a stark contrast between gov't mandates (i.e., forcefully taking money to give to another). I am fine with a hospital, an individual, or a group/organization that voluntarily contributes money or care to those who can't afford it. Indeed, I believe such a system would be more effecient and less ridden with fraud.

So, I don't want to put words in your mouth, but I wouldn't go so far as to say that "if he can't pay, he dies." I would just suggest--as I think you are--that gov't run health care is not an act of love or charity. It is a forceful act.

John Thacker said...

Do you really think that there is no time to criticize the mandate? Republicans have already been complaining about several different things in the bill, and have certainly shifted at different times what their loudest complaint is. They've been focusing on bills other than the Baucus bill.

Anti-mandate ads write themselves, using Obama's Primary Debates.

msouth said...

Short version: the Republicans would not have fallen into this trap if they saw their mission as "defending liberty", rather than "whatever they can think of next to stay in/regain power".

Truth said...

Republicans and Democrats are two faces of the same party, this is why neither party EVER "realizes" the critical issue.

Daniil Gorbatenko said...

Yes, the real Trojan Horse for single payer is the mandate not the public option.

Republicans could have a chance to destroy both if they showed that e.g. Krugman is shamelessly justifying the public option because it will offset the increase in markert power of the private insurers as a result of the mandate.

Jacob M said...

With all the new regulations going to be put in the insurance industry, must cover pre-exsisting conditions and so forth, the mandate is a must. If the mandate is not there, nobody would get insurance until they need it. No matter what bill passes we will not get the proper reform that we need.

jeff in indy said...

if i recall correctly, didn't medicare exceed guessimates by nearly 9 times? at any rate, the CBO may have come to the rescue again today. they affirmed that the baucaus plan may reduce the deficit; however, part D participants will take a massive hit in benefits to finance it. and us (soon to be) oldster's vote...

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