I’m far from an expert on health policy. Like many Americans, I’ve spent the past year studying the contours of our nation’s health care system in order to attempt to reach an informed and rational conclusion on the various proposals being put forth. In so doing, I’ve reached two broad conclusions about health care in America: 1) the current system is unsustainable unless something is done to bring down the cost of care and 2) the legislation that President Obama will sign into law will almost certainly ensure that our nation reaches its health care breaking point much faster than it otherwise would. That’s because ObamaCare focuses on ensuring universal access to health care without doing anything to reduce costs, and as anyone who has taken a basic economic class knows, an increase in demand for a good or service absent any change in supply means an increase in price. ObamaCare’s almost certain passage essentially changes the conversation about health care into this country from one about access to one about cost. And, interestingly, that conversation is one that favors conservatives. As such, the president may be about to sign away his second term.
No one is claiming that the current health care system wasn’t chalked full of archaic regulations and perverse incentives. And those were things that conservatives favored changing just as much, if not more so, than leftists. Republican thinkers and politicians advanced a variety of ideas to increase access to health care in a manner that would be less costly and less intrusive than those proposals put forth by Democrats. Allowing Americans to purchase insurance across state lines, incentivizing preventative care, and creating new ways to pool risk, such as association health plans and high-risk pools, were all ideas put forth by various prominent Republicans. And Sen. McCain’s plan, as articulated during the 2008 presidential campaign, would have given every American the means to purchase at least a basic health care plan on the individual market through the provision of refundable tax credits, paid for by ending the tax deduction for employer-based care. Together, these ideas would have expanded health care coverage to a near-universal level without expanding government, adding to the deficit, or yielding the myriad of unintended consequences that sweeping changes always produce. And the plans put forth by Republicans would have lowered the cost of care in the long-term instead of increasing it.
ObamaCare, meanwhile, is essentially an attempt to nationalize the financing of health care while still leaving that financing mechanism in the hands of private insurance companies. No matter what the final bill looks like, it will almost certainly contain the provision known as guaranteed issue, meaning that insurance companies will be required to sell policies at the same rate to all purchasers. A few states have this now, and those states just happen to have the highest premiums in the nation, largely because insurance companies are forced to offset the money they lose on insuring the old and sick by raising premiums on everyone else. So ultimately, not only will ObamaCare turn insurance companies into public utilities and destroy the health insurance market, it will dramatically raise the cost of care for the typical middle class American.
The silver lining is that, as in Massachusetts, where a comparable plan was implemented, ObamaCare will probably result in 90-plus-percent of Americans being insured, meaning that the national conversation will turn away from universal coverage, which Republicans can never win, because even when they put forth good ideas, swing voters simply don’t believe the GOP will implement those ideas. So essentially we’ll have a health care system on this country that everyone theoretically has access to, because everyone will either have private insurance or be covered by Medicare or Medicaid, but that no one practically has access to, because private insurance premiums will go through the roof and because federal entitlements will continue to pay less for medical services, and thus be accepted by fewer medical professionals. That will transform the health care conversation in this country into one about cost: the cost of care, the cost of the entitlements, and the fact that the nation is on the verge of bankruptcy. And that will create a massive political market for a small government party to re-emerge to make the hard choices necessary to bring us back from the precipice. If ObamaCare passes, the nation and the Republican Party will almost certainly swing hard right on fiscal issues.
December 21st, 2009 at 10:55 pm
MUST READ!! From Erick Erickson at RedState: The Senate Democrats declare a super-majority of senators will be needed to overrule any regulation imposed by the Death Panels.
Sorry for the length of this quote, but it’s rather necessary:
Oh. My. Goodness. They’re making up the rules as they go!
December 21st, 2009 at 11:27 pm
Somebody mentioned Currently, a 60-year-old likely would pay five or six times more for private medical insurance than someone in his twenties but it may not be true always check http://bit.ly/7bwEx2 for lower price coverages
December 22nd, 2009 at 12:03 am
[...] the liberal base still seems divided over the value of reform many argue does more to enrich the health care industry then alleviate the financial burden shouldered by [...]
December 22nd, 2009 at 2:10 am
Spam alert on #2.
December 22nd, 2009 at 11:16 am
DaveG, there are some who say the bill does have cost controls in them. See here: http://tinyurl.com/yfcfcha
What do you think of this?
Also, I get the sense that you are in favor of this bill passing, because of how it will all play out – the uninsured and the sick and the entrepreneurs will be able to get insurance, the republicans will get elected, and the republicans will improve the legislation/health care system to make it more cost-effective than it is now. Best of all worlds.
Is this right?
December 22nd, 2009 at 12:10 pm
Interestingly enough, we hear by many that Massachusetts did not address the cost reduction parts in its health care plan. However, it was just reported on the Senate floor that preiums went down siginifcantly over the last t.5 years. To quote: An overall decrease in premium cost also is consistent with the experience that the state of Massachusetts had after they enacted similar reform to what is now being conseidered in the Senate. There has been a substantital reduction in the cost of nongroup insurance in that state. In fact, the average individual premium in Massachusetts fell from $8537 at the end of 2006 to $5142 in mid 2009. That’s a 40% reduction in premiums for the coverage. This is at a time that the rest of the nation was seeing a 14% increase.
December 22nd, 2009 at 12:13 pm
Dave,
This is a very interesting take, and, as usual for you, it makes eminent sense.
December 22nd, 2009 at 12:18 pm
Conservative,
It could also be pointed out that under MassCare the state has saved a small fortune on Emergency Room costs.