A Footnote to History

In 1949, an up-and-coming young Representative from California, Richard Nixon – not yet Tricky Dick – was running for the Senate. His candidacy and personal philosophy was an odd amalgam of instinctual progressivism and ritual anti-Communism. He was fresh from his personal triumph in unmasking Alger Hiss as a Soviet spy, using the famous “pumpkin papers” from Whittaker Chambers.

One of his key campaign platforms was – wait for it – essentially ObamaCare for Californians! He thus augured Mitt Romney’s program as Governor of Massachusetts many years in the future. Nixon won but never followed through on this, and probably it was never possible in the political climate of the time, but isn’t that a wondrous thing?


ObamaCare: a Republican Shibboleth

Say the word ObamaCare to most Republicans and all they really hear is the initial five letters, i.e. our ex-President’s name.

In the minds of these Republicans – such as they are – ObamaCare is a stand-in for President Obama himself. Their visceral, and sometimes racial, animus to Obama was entirely transferred to this legislation. It was his signature achievement and came to represent everything about him. You can’t separate the two. Repealing ObamaCare came to be thought of as handing an ultimate defeat to their despised foe. This is true even with the fig leaf of replacing it with “something better”, but with scant thought about what that might be, as events have amply demonstrated.

But with Obama comfortably retired to a life of leisure, and facing the realities of a health care system incessantly described as “one-sixth of our entire economy”, the Republicans flinched. The uncomfortable fact, still not yet acknowledged by Republicans, is that ObamaCare resembles democracy in being “the worst institution, but better than any other that we can devise and enact.” Oh yes, the socialist nirvana of a wholly government program like Bernie Sanders’ Medicare for All is alluring to progressives, but don’t hold your breath. We are not yet Sweden and in my opinion never will be, thank God.

Too many people now depend upon some of ObamaCare’s popular provisions to even contemplate risking their loss. It was the genius of the Obama administration to ensure that enough people were hooked on their nostrum to make it effectively comparable to Social Security as a third rail of politics. To this end they tied what was promoted as a public/private health insurance system for those not covered at work to a massive expansion of Medicaid. The original purpose of Medicaid was as a social health care program for some but not all individuals with limited resources. Just as FDR never intended Social Security to be a full backstop against income insecurity among the elderly, Medicaid had a targeted focus on those most in need. Now this was transmuted into a general welfare program extending well above the poverty level and with few meaningful restrictions. Once states accepted this lure, and most did, even many under Republican control, how could they possibly explain relinquishing this largess for an uncertain alternative?

Of course, it isn’t over yet. I expect that attention will now go toward the compromise being worked out by Sen. Lamar Alexander (R, TN) and Sen. Patty Murray (D, WA). If it emerges as a real piece of legislation, it won’t be able to carry the label “repeal of ObamaCare”, so will the Republican majorities in either House of Congress pass it? Frankly, I am skeptical. You might ask whether the President would then sign it, but I can make a confident prediction here. He will. And it really doesn’t matter much what its provisions entail. Trump is hardly an ideologue – that requires actually having some ideas – and he sorely needs a legislative victory. These have been few and far between so far and the future of the rest of his agenda seems bleak without this win under his belt.

A 21st Century Modest Proposal

One of the most consequential activities we pursue from the standpoint of health and safety is automobile driving. As a result, the government has passed numerous regulations that require safety features, from seat belts to intricate electronic control systems. These are not optional. The auto manufacturers must implement them, and they must do so in a manner that meets rigorous test standards. In many cases, drivers must use them. Disabling airbags, except under special conditions, is illegal. And in many jurisdictions, driving without attaching your seat belt can result in a stiff fine. You can’t choose a cheaper car that isn’t as safe because Big Brother says so. And if you are a highly skilled, youthful driver you can’t substitute your skill set for the mandated technology because … well, just because. There can be little doubt that all of this improves driving safety and has contributed to saving many lives, although it obviously adds a substantial amount to the cost of ownership.

Obamacare applies this logic to health insurance. It requires a full spectrum of care provisions that are very comprehensive and very protective. These are not optional, whether you want them or not and even when they don’t apply to your personal circumstances. So, men must pay for maternity benefits and everyone must pay for drug abuse counseling. The logic behind this is that bundling full services in this manner makes them affordable for those in real need. If you can’t afford such comprehensive protection, the government chips in with subsidies.

Don’t you think that it would be consistent, returning to the automobile case, for the government to use safety testing data to qualify car models for sale in the U.S.? Perhaps the top five models on the test scores each year would qualify. Actual qualifiers might change from year to year, but historically it is obvious that some brands would dominate the list. I suspect that over time all of us would be driving a Volvo sedan or something like that.

Consider this. We are spending enormous amounts to make automobile driving safer but nevertheless as many as 40,000 people died on our roads in 2016 and an estimated 4.6 million more were seriously injured, according to the National Safety Council. If you include all costs from this carnage, the NSC estimates that $432B was lost as a result. So, wouldn’t yet more federal regulation be warranted? Isn’t this almost comparable to the need that spawned Obamacare? So why shouldn’t its model be employed once again?

Where would this take us? Convertibles, for example, are so unlikely to qualify that no sensible manufacturer would try to make them for the U.S. market. If you don’t like or need a four-door sedan, well that’s just too bad. Many more currently optional safety features would become mandatory: lane assist, braking assist, 360 degree proximity detection, sonar-assisted separation control, drunk driver interlock, and so on. These would make cars much more expensive of course, but who can place a value on the lives saved? If you can’t afford this, then probably government subsidies will be needed, paid for by taxes on the usual suspects. I have little doubt that this would save many lives. So, not doing it, as they now say about repealing Obamacare, is tantamount to condoning mass murder.

I think you get the idea. Why stop at health insurance with this concept. And for that matter, why stop at automobiles? How about food too? Obesity is a terrible health scourge and it is getting worse in the U.S. every year. Shouldn’t we get those unhealthy foods off the market and apply stringent standards for what can be sold? It is true, I think, that this might be a bridge too far and might fall prey to the flaw that eventually killed the noble Volstead Amendment. It is very hard to prevent people from finding fatty, salt-ridden foods, and many avaricious criminals would be happy to serve this taste for the forbidden. Still, we could probably make it fairly difficult and expensive to achieve morbid obesity. Surely that would discourage some, and every life is valuable.

We could make life so much safer if we only follow this concept to its logical conclusion. Wouldn’t that be wonderful?

A Radical Obamacare Solution

Regardless of how the faltering Republican effort fares, no one is going to be satisfied with what is done with Obamacare. The current law has obvious flaws. It may not collapse as Republicans predict and probably hope, but it is far from the solution originally planned by its supporters. Moreover it is in a financially precarious situation. So, what to do?

The two sides in this debate are irreconcilable. One reason is pure politics. Each side has deeply held and fundamentally different ideas of the proper relationship between government and the governed. Another reason arises from differing projections for how each of their prescriptions will work in practice. Yet neither side is being given a fair opportunity to test its ideas in the real world. We just get half measures and flawed compromises.

The first reason can’t be addressed via any specific issue, and most definitely not by the emotionally charged case of health care. But the second one could be evaluated by a scientific experiment!

How about this idea? We let Congressional Democrats design their “optimum Obamacare”, i.e. with any changes they believe would make it work better, including just making it a true single-payer, uniform system like they have in the U.K. Congress then passes this bill intact, with Republicans holding their noses as they vote. However – and this is the key provision – this plan would be completely optional on a state-by-state basis. States could accept Improved Obamacare or they could reject it entirely. They couldn’t equivocate; it would be all or nothing. I think the default should be rejection, to account for miscreants who simply can’t make up their own minds, but that is open for debate. I am also assuming that Trump doesn’t interfere with this experiment.

No doubt many red states would reject this plan, probably including a majority of the states. Meanwhile big states like California, New York and Massachusetts, plus several others, would gladly accept it, and they may actually comprise a majority of the population.

That would set up the experiment. This shouldn’t be too difficult for insurance companies to handle from an actuarial perspective. There would be very large population groups under each of the two circumstances, and there would be only the two to consider.

After a few years the results should be clear. Democrats believe that those states accepting Improved Obamacare would flourish, with abundant, affordable and high-quality health care. Health care providers would accept their new reality and easily adjust to it. Meanwhile, Republican states would rejoice that the federal meddlers were finally leaving health care decisions to the people, with a free-market proliferation of products that meet individual needs and pocketbooks. I suppose it is conceivable that both circumstances would be successful, since people truly do have different perceptions of what is good, but I strongly doubt it.

One side is going to look longingly over the fence at a neighboring state. Voters will importune or force their legislators to reverse their initial choice. Meanwhile, people will vote with their feet and move to where the grass is greener. The same is true for individual providers. Doctors and insurance companies will gravitate to the environment that suits them best. Over time, one side or the other will give up and the country will finally have what it actually wants from border to border, and not just something which some Congressional ideologues think they want. There might be some irreconcilable holdouts. For example, I could conceive of the entire country rejecting Improved Obamacare while California stubbornly goes its own way. But what is wrong with that?

Of course such an experiment would be a bit cruel. That is the nature of scientific experiments on human subjects. Those in the political minority in a state would suffer the choice of the majority. But isn’t that how our system mostly works anyway? In any case, if I am right, the experiment will naturally terminate in at most a few years as one approach proves its case in practice and the other fails. And if unexpectedly both are actually successful in their own ways, meeting the differing desires of their states, that would be a success too.

Yet Another Belief Shattered

I used to believe that the non-partisan Congressional Budget Office (CBO) is a good authority on the consequences of future laws. Actually, their projections are not always on the mark – see Obamacare for example – but what they are attempting is hard so one can’t expect perfection.

But just now they submitted a projection for the future after Obamacare repeal that is breathtaking in its irrelevance. The Democrats in Congress have pounced on it like a starving lion on red meat. It shows many millions losing insurance entirely and costs doubling for those lucky enough to remain insured. Senate Minority Leader Charles Schumer positively waxed poetic in his wrath and disdain.

What are they actually projecting? It turns out that they are dutifully but mindlessly using as their basis the repeal of Obamacare with no replacement – ever, period. This is like your surgeon telling you your life expectancy after heart removal but with no replacement in prospect. How useful is that?

I haven’t heard a single Republican say that there will be a repeal before a replacement is available. In fact, both Trump and the Congressional Republicans have stated exactly the opposite. Of course, the devil is in the details. Their replacement might be terrible and have dreadful consequences. No one yet knows, and certainly not the CBO.

The one genuine fact from this CBO estimate that Democrats could crow about is that it seems to show that Obamacare must be lowering overall healthcare costs to consumers, not the opposite as Republicans usually say.

chuck-getting-itOne possibility occurred to me that might redeem the CBO a bit. Perhaps they are simply responding to a query by Senator Schumer, who obviously would like the bleakest possible outcome. I don’t think they have the authority to respond, “Screw you, Chuck. We aren’t about to put out such misleading garbage.”

And there is always the possibility that the situation envisioned by this estimate is precisely what Senator Schumer plans for our future. When asked in an interview whether Democrats will help Republicans pass a replacement that is less generous and comprehensive than Obamacare, he answered with a resounding “No!” He added, “If Republicans destroy our health system [Obamacare?], we won’t throw them a lifeline.”  That seems a bit cruel to the American public, but it certainly gives Democrats a weighty cudgel for 2018. Crafty?

The Future of Obamacare

changeahead1-copyTrump’s cabinet choices make it clear that he really does mean to drive a stake through Obamacare. In particular, his choice of Rep. Tom Price to head Health and Human Services puts one of the foremost critics of Obamacare at the helm of its management. But – cliché alert – the devil is in the details. Republicans in Congress can effectively repeal it through a reconciliation process, which requires only a bare majority in each house. (See the postscript below for details.) They have only a two seat margin in the Senate, so caucus discipline must prevail if this is to work. But it seems unlikely that they would wound their new President by resisting. However there is a nuance. This cannot be done quickly. A reconciliation process can only be associated with a budget bill, so this stratagem must await development of a suitable budget. That will take months in the new Congress.

Replacing Obamacare with a plan more to conservative tastes is an entirely different story. This must go through the normal legislative process and would be subject to a likely filibuster in the Senate. However Trump has pledged that there will be no interim period where 20 million people have no alternative for medical insurance. The Senate could of course invoke the nuclear option and change their rules to forbid a filibuster. But that is a slippery slope that Senators would be loathe to risk. So what’s the plan?

Here’s what I hear. When they repeal Obamacare, they will delay its demise for enough time – they hope – to produce a replacement. This will probably push actual termination well into the future. The Republicans believe that given the choice of no plan or one that they don’t much like, Democrats in Congress will cave. But Chuck Schumer, the new Senate Minority Leader, begs to differ. He says he won’t budge on anything that Democrats consider to be minimum health coverage. Sticking points will likely be contraceptive coverage, federal subsidies, expanded Medicaid and the issue of pre-existing conditions, at the very least. And he evidently believes that Republicans will flinch before tossing all those millions over the cliff.

So, we are heading toward a colossal climax that will make our periodic budget battles look like child’s play. I hesitate to predict the outcome given my prognostication record during the election but, never daunted, here I bravely go.

Trump can’t give in on his first big policy fight or else his Presidency is toast. But Democrats desperately need a banner to wave in 2020 so they could be willing to sacrifice some people now for what they see as the greater long-term good. I predict that there will be no replacement at all and we will simply return to the situation before Obamacare was created. Eventually, of course, we will come up with some sort of solution to our nation’s healthcare crisis, but not now and not soon.

obamacare-cartoon-5I am not predicting this because that is my wish, but I am not so sure that it is actually a bad outcome. Obamacare is actuarially unsound and it is headed toward a catastrophic collapse in any case. Moreover, the number cited of those at risk, 20 million, is basically a lie. Many of those “benefiting” from Obamacare essentially have fake policies. If you have a massive deductible, as much as $14,300 for a family under the Bronze plan in 2017 for example, what use is this other than as disaster insurance? It should reduce the number of medically-induced bankruptcies, but for customary medical insurance it is close to useless. For the vast majority their premiums simply lower their standard of living. True, there are subsidies available under certain conditions that mitigate this problem, but they don’t eliminate it. If you live paycheck-to-paycheck, as even many relatively well-off families do, paying thousands of dollars out-of-pocket before insurance kicks in is out of the question.

The bottom line is that we will eventually, and for many conservatives reluctantly, acknowledge that a public, single-payer plan is the only workable solution. Most advanced societies have already reached that conclusion and predicted disasters have not occurred. So I finish my foolhardy prediction by saying that the eventual resolution will be something like Medicare for all. In the meantime, expect some pain and conflict.

[POSTSCRIPT] One of my smart followers has pointed out that the reconciliation process cannot achieve full repeal of Obamacare. That is correct. All that is possible is to delete those sections of the law related to taxes and spending. This would include subsidies to buy health insurance, tax credits, the full expansion of Medicaid and penalties for not having insurance (considered taxes by the Roberts Court). This guts the law and makes it even more obviously a financial disaster. True, provisions that allow children to remain on their parents’ plan until age 26 and the popular protection against refusal due to pre-existing conditions remain intact. Actually, Trump has already said he likes those provisions. But this will remove even the currently flimsy financial props of Obamacare, leaving at best a zombie law. Costs would be prohibitive and few insurance companies would even bother to participate.

Our Galaxy Note7 of Health Plans

obamacare-cartoon-july-15-4During a speech at Miami Dade College last Thursday, President Obama drew an analogy between Obamacare and Samsung’s unfortunate Galaxy Note7 smartphone. You know, the one that bursts into flames in your pocket?  I imagine in retrospect he might wish he wasn’t so inadvertently revealing.

When one of these companies comes out with a new smartphone,” he said, “and it had a few bugs, what do they do? They fix it. They upgrade – unless it catches fire, and they just – [laughter] – then they pull it off the market. But you don’t go back to using a rotary phone. [Laughter.] You don’t say, well, we’re repealing smartphones.

Samsung was smarter than that, although they did initially try the “fix and retain” ploy. Then they quickly recognized that its design was fundamentally and dangerously flawed. So they pulled it completely off the market and reimbursed all of its customers. Putting lipstick on a pig rarely makes it a beauty pageant winner. Samsung isn’t transitioning to making rotary phones; they will continue to make excellent smartphones that do what they are advertised to do without exploding.

Republicans have long argued that Obamacare is hopelessly flawed and that it must be repealed and replaced with something workable. They are right, but they can’t be trusted to follow through. They basically still support the public healthcare system that has been failing us for decades. Hillary should make this a priority, but do you think she is smart and brave enough to take it on after seeing what happened last time?

Obamacare was always a jerry-built structure based on faulty assumptions and vain hopes. It took the essence of a public plan, with all of its advantages, and packaged it into a public/private patchwork that is actuarially unsound. They did this with the best of intentions because they desperately wanted something and this was all they could get.

What this shows to me is that our Democratic politicians have really big hearts and really tiny brains. They seem to be a living counter-example to Darwin’s Theory of Evolution. Of course Republican politicians, with their tiny hearts and tiny brains, are evolutionarily recognizable throwbacks to our early Triassic forebears.