The Morning After

Yesterday the House passed the Senate’s bill for health-insurance reform, which the President will sign. Democrats trumpeted realization of a century-old dream of universal health care. Republicans, as usual, decried rampant socialism and foretold the Republic’s imminent destruction.

Neither claim comes even close to being true. Even after all the transition periods have expired, we will still have over 15 million uninsured―about 5% of our population―only one-third of whom will be illegal immigrants. If a significant fraction of them opts to pay fines, rather than accept the “mandate” to buy insurance (at presumably higher cost), there may be more. And we will still have a health-care-system dominated by private, for-profit insurers.

With his usual penchant for accuracy and understatement, the President described yesterday as making major reform, but not radical reform. It would take radical reform, i.e., universal Medicare, to come close to realizing past presidents’ and many Americans’ dreams of simple, truly universal and reliable health care.

So what have we done? What did the House accomplish yesterday?

We seem to have established five simple principles, as follows:

1. In what is still the richest society on Earth, and the one that most prides itself on justice and fairness for individuals, it is unacceptable and embarrassing to leave 15% (moving toward 20% if the bill had not passed) without access to health care. So we’re going to cut our uninsured fraction down to about 5%.

2. Health-insurance in the United States will still be run largely by private, for-profit enterprises. The two major exceptions―Medicare for seniors and Medicaid for the poor―will continue, and Medicaid will expand.

3. Private insurers will be required to stop their cruelest and most outrageous practices, such as excluding pre-existing conditions and dropping or gouging insured people when they get sick.

4. We will experiment with various means, including governmental regulation of exorbitant rates, state-by-state insurance “exchanges,” fees for outcomes and quality (rather than just for services), and standardization of data processing, to make the system work better and control costs.

5. When all the dust settles and the transition periods end, people who get their insurance through their employers will have “portability,” i.e., their health insurance won’t lock them into a job they hate.

That’s about it. Now that wasn’t so bad (or good), was it?

At least this list hits most of the points I made over two years ago about what consumers really want. [search for “Any system”]

Unfortunately, our President, one of our brightest, most talented and most admirable leaders in the last half-century, is going to have to spend the next six months of his precious time explaining these simple points to dummies. In the process, he is going to have to overcome another flood of lies and propaganda, which presumably will be more subtle and less obviously ridiculous this time.

Then there are the legal challenges. I’ve made some mistakes on this blog, and one of my biggest was overestimating Chief Justice Roberts. I thought he was sincere in his Senate hearings. But he seems to have snookered both the Senate and the nation with his good looks, charm and carefully calculated silences. His votes and opinions on the Court so far reveal him to be the worst sort of results-oriented ideologue (aka, “judicial activist”) who ever sat on the Court. And its seems that rest of the Court’s conservative ideological wing (Justices Alito, Scalia and Thomas) will follow wherever he leads, with Scalia and Thomas leading the charge yet further into the Right-Wing Flames of Hell.

So there should be four reliable votes on the Court to beat back or emasculate health-insurance reform, beginning with its “mandates.” As usual, Justice Anthony Kennedy will set our nation’s course and seal our fate.

I have more confidence in him than perhaps his decisive vote in Citizens United (the corporate “speech” case) would suggest. He has always been as close to an absolutist on the First Amendment as we have on the Court today. When it comes to allowing the people to set their own policy on as vital a matter as health care, I think he will let Congress rule.

It’s not as if we don’t have precedent. Seat-belt and motorcycle-helmet laws raised the very same arguments for unchecked personal liberty and against government paternalism, and they passed constitutional muster. Health insurance is more expensive than seat belts or motorcycle helmets, but the principle is the same: society has the right to require individuals to buy things that make them safer when their safety, in large numbers, impacts the viability of society as a whole. Health insurance differs only in degree, not kind, and I think Justice Kennedy will so hold.

As for myself, I’m now agnostic on mandates, at least those in the bill now passed. I opposed mandates (and Hillary) strongly (1, 2, 3 and 4) during the presidential primaries, in part because I believe that economic legislation works bests when it cleverly adjusts the economy, instead of mandating an economic result. But my major objection was always political. I thought mandates played into the demagogues’ hands.

In that I seem to have been wrong. Rather than rely on the single credible argument against the President’s plan, the demagogues turned to outrageous and obvious lies, including “death panels,” “government takeovers,” and pitting their own pitiful knowledge of economics against the nonpartisan CBO’s expert predictions.

Who could have predicted that all Republicans would follow Village Idiot John Boehner, Mitch McConnell and Karl Rove over this cliff of ignominy? In attributing basic rationality to our elected representatives, even Republicans, I was insufficiently cynical. I thought Boehner and crew would rely on decent but weak arguments rather than bald lies. Mea culpa.

As for substance, the new law is supposed to add 32 million insured. That’s a bit over 10% of our 307 million population. Most of them will be overjoyed to get some fairly-conceived, reliable health insurance that they can afford. A few will grumble at the mandate, and even fewer will skip the insurance and pay the fine. I can’t imagine that the entire population of dissenters (including unwilling buyers and fine-payers) will exceed of 5% of the whole. (Maybe that’s why the demagogues didn’t take this bait.) In accounting, 5% is barely material.

Paul Krugman thinks the mandates are what make the system work, because otherwise young, healthy people would opt out, making the pool smaller and raising premiums. I can’t see how 5% more or less will make much of a difference, either in the pool or in financing. If our state-by-state and employer-by-employer pools are too small now, as I believe they are, they are too small by a factor of at least two or more, not just 5%. And in a world where private premiums go up as much as 39% every year, a 5% one-time hit is not going to make much difference. Krugman may have a Nobel Prize in economics, but the numbers just don’t impress me, and there are too many unknowns to predict anything accurately.

So economically, I don’t think mandates matter much either way. And politically their day is past. It’s up to the courts to judge them now.

In my view the bill’s worst feature is its provision for insurance exchanges. According to reports I have read, they will operate state by state. That is, they will do nothing to establish the national insurance pool and national market for health insurance that we so sorely need. And they will allow states ideologically committed to maximizing private profit, such as Texas, to ignore or emasculate the exchanges and make them irrelevant.

To get an idea how likely this is, peruse the Washington Post’s tally of final House votes on the bill, showing what percentage of citizens lacks health insurance in each Member’s district. If you focus on Members representing 20% or more uninsured who voted no, you’ll find nearly all hail from southern states, plus Oklahoma. In other words, the states that most need universal health insurance are the ones most ideologically opposed to providing it.

Arranging so-called “exchanges” on a state-by-state basis means that exchanges in these states will accomplish nothing. There’s some poetic justice in that. Maybe some day citizens of these states will wake up and discover how states’ rights and a pack of lies have undermined their individual economic interests. Then maybe they will hold their representatives accountable.

On the other hand, exchanges will provide an additional option for big progressive states like California, Massachusetts and New York, which mostly don’t need them. So a lot more needs to done providing alternatives to the current private health-insurance market nationwide.

In the final analysis, this exhausting year-long debate has been much ado about little. We haven’t solved the health-care cost problem or even postponed the cost explosion. We haven’t mandated a “government takeover” or replaced private bureaucrats with government ones. But we will have restricted the private bureaucrats’ worst cruelties. And in bringing an additional ten percent of our population into the health-care system, we will have made all of us more secure. Finally, as Krugman has noted, we even managed to get Congress to disbelieve a pack of outrageous lies―by a margin of 3 out of 535.

With Pablo Picasso, we can say that these results are a whole lot better than the alternatives. But they are hardly cause for victorious wassailing, notwithstanding all the work it took to get here.

Now it’s back to work. We still have a nation to save. Our national glide path on climate change, energy independence and financial reform is still unambiguously down. The good news is that our talented President, now clearly a winner, has more energy and power to pull up on the stick.

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