Health Care Reform and the Great Switch
Personally, I thinks it’s fairly likely at this point, that one of the current “health care reform” bills will become law. However, though I come to this with characteristic lateness (increasing busy-ness seems to make topical blogging near impossible) I think it’s worth spending a moment on one of the fascinating contradictions which has gone mainly unremarked in the whole debate.
One of the primary arguments put forward by advocates of health care reform over the last 2-3 years has been, essentially, that health insurance companies are evil. People froth at the industry term of “medical losses” for when insurance companies pay out for medical expenses. (Something which, in fact, happens with over 80% of the monies collected in the form of insurance premiums.) Others rail against how the profit motive has destroyed health care and driven costs to astronomical levels — apparently oblivious to the fact that there are several major not-for-profit insurers, and they don’t provide care any more cheaply than for-profit ones. And yet, despite these and many other rhetorical assaults on the whole idea of health insurance as a commercial product, the centerpiece of the proposed health care reform bills was to legally require everyone in the US to purchase health care insurance, and then provide government subsidies for those who couldn’t afford the premiums. (Thus “shoveling” government money into the insurance industry in the same way in which Medicare Part-D, which all good progressives are now against, did with the pharmaceutical industry.)
Why in the world did a movement which had so long railed against private insurance suddenly decide to require and subsidize it, rather than pushing for the government or non-profit approaches to health provision which had so long appealed to it?
One answer is, of course, political pragmatism. The bills as constructed were very nearly able to pass — indeed, I remain mildly surprised that they didn’t. Though now that they’ve become so unpopular (as was probably inevitable once people had a bit of time to think about them) I no longer think it’s politically possible. But there was a time when it seemed like these bills were just moderate enough to pass. Still, why was this moderation acceptable to the health care reform movement? It’s almost as if the environmentalist movement suddenly got behind a “compromise” bill which required everyone to buy Hummers, while subsidizing those who couldn’t afford it.
Frankly, I think, pragmatism covers a lot, that and the political tribalism which led people to think that anything supported by the Democrats and labeled “health care reform” must be something they would like, regardless of what the actual content was.
However, there is, I think, a more interesting explanation as to why progressive strategists considered this a good first step in health care reform: On the surface, it would seem that these bills would have greatly strengthened private insurance, by forcing every American to buy into it. However, it would have in the process set up an opportunity for outrage. There were two highly predictable results of the legislation as drafted:
1) The cost of health insurance would go up for most people, due to the requirement that insurance companies issue policies even to people who were already suffering major health problems, and not charge people who were old or sickly significantly more.
2) Insurance companies would post record profits, because even if new legal requirements make them slightly less profitable, the acquisition of 20 million or more new clients would life their total dollars in profit even if their profit percentages went down.
The combination of health insurance rates rising even higher and insurance companies posting record profits would allow progressive populists to level the charge that insurance companies were profiteering. This would lead naturally to a demand that insurance rates to regulated. “We tried to work with the free market,” the rhetoric would go, “but the insurance companies were driven by greed and tried to profiteer on people’s suffering.” Of course, price controls will lead rapidly to either bankruptcy on the part of the insurance companies, rationing, or nationalization — quite possibly all of the above. Or, perhaps, to an elaborate appearance-saving approach in which prices are fixed on the front end while costs are subsidized on the back end, turning insurance companies into public entities in all but name.
So while the current bills certainly do nothing to nationalize or “socialize” medicine, it is probably a pretty decent step for those who think that is a good idea.