The PPACA Didn’t “Entrench” the Health Insurance Industry
The latest health care thread involves several people making an assumption that’s worth debunking. Feeble heighten-the-contradictions arguments against the PPACA generally involve claims that the PPACA made “real reform” less likely because it entrenched the health insurance industry. The obvious problem with this argument is that the PPACA did no such thing. The health insurance industry is profitable, and as long as it is allowed to cherry-pick customers and has no obligation to use any particular percentage of premium revenues — both of which were true under the status quo ante — it was going to continue to be. The idea that the health insurance industry would wither away had the federal government just did nothing is sheer fantasy. And you know who didn’t think that the PPACA was a good deal for the health insurance industry? The health insurance industry. Because the insurers expressed some initial tepid support for reform in the abstract, there is an ongoing perception among many people that the Obama administration cut a deal with the health insurance industry. But, as both Remedy and Reaction and Obama’s Deal clearly report, there was do such deal. The administration did cut deals with the pharmaceutical industry and with practitioners, but not with the health insurance industry. And as a result, the industry spent immense amounts of money (as JfL points out, 40% of the Chamber of Commerce’s budget!) trying to kill the PPACA. Ultimately, the insurers withdrew their nominal support too, but it doesn’t matter anyway. I am just amazed to see progressives believe that the stated positions of industry lobbies matter more than where they spend their dollars, which is unimaginable in any context other than finding pretexts to attack Obama. (Wal-Mart says they’re not anti-union, so I guess we have to take them at their word!) The health insurance industry certainly doesn’t agree that the PPACA was a good deal for them, and they’re right. It immediately places substantial restrictions on them, it doesn’t make single-payer less likely, and Laura points out it makes the hybrid public/private systems (cf. France, Singapore) that are even better than single-payer a little more likely.
As for the related argument that the restrictions on the health insurers won’t matter at all because of “regulatory capture,” this is a faux-sophisticated argument. First of all, it proves too much — by the same logic, we might as well repeal the Clean Air Act and the Civil Rights Act because we can’t insure perfect enforcement, which is silly. Moreover, the PPACA will much less subject to regulatory capture than many other areas of regulation. Regulatory capture is most prevalent when 1)legislation established vague goals that have to be put into practice by regulatory agencies, and 2)regulations provide diffuse, indirect benefits to the population as a whole that don’t apply to individuals in particular. The PPACA provides clear statutory rights to direct benefits. If insurers refuse to provide insurance based on pre-existing conditions, they’re not going to be able to stay out of court. This is not to say that a Republican administration couldn’t have done significant damage to the PPACA as it was being implemented, and might make enforcement worse at the margin even after it has. One of the people involved in this discussion does, in fact, tend to ignore the consequences of Republican appointments to federal agencies and the federal judiciary for after-the-fact implementation in favor of onanistic fantasies about how losing the White House is secretly winning. (Spoiler: it’s not me!)
Then, let us deal with some of the most misplaced self-flattery in known internets history:
if something makes actual reform more difficult, it may not improve the status quo. By your logic, legislators should never oppose a bill due to a poison pill provision.
You seem to have a very binary mind. The leftists you despise think several moves ahead in the chess game. You are constantly criticizing things you don’t understand.
Right, if you fail to perceive that checkers with most of the pieces missing is really eleventy-million dimensional chess, it’s because you just can’t understand the incredibly complex and sophisticated progressive case against the PPACA. (I also enjoy the non-sequitur about “poison pill” amendments. These amendments work because they make legislation on balance worse than not passing it at all. An amendment that makes legislation less good but not worse than the status quo isn’t a “poison pill”; it’s a compromise. They are irrelevant to situations in which legislation improves the status quo.) Anyway, like any progressive who was alive in 2000, I understand immoral and painfully naive heighten-the-contradictions arguments perfectly well. I make fun of them because they don’t make any sense, and in the case of health care reform the betray a comprehensive unfamiliarity with American political history and American political institutions.
The PPACA is not optimal policy; far from it. Neither was anything passed during the New Deal. But by expanding access to insurance and expanding (and improving) Medicaid, provides very substantial and tangible benefits to many people. This places a very high burden of proof on those who would leave these people to death or suffering for imaginary future gains. To oppose the PPACA on heighten-the-contradictions grounds, you need a very plausible story about how a substantially better health reform bill can pass in the relatively near term. And there could not possibly be less basis for this assumption. As already noted, the idea that the heath insurance industry was facing imminent collapse is dreaming in technicolor. The institutional framework — and trying to pass yourself off as a tough-minded leftist if you don’t understand this is a joke — that protects vested interests and makes major reform legislation immensely difficult will remain in place. The uninsured will remain a relatively powerless constituency, and the interests that oppose single-payer will remain very powerful and need only capture one of many veto points. Politics is about power, not teleology — there’s no natural tendency to move towards ideal policy solutions. And think about the politics for a second. Having seen two Democratic presidencies in a row founder on the shoals of health care reform, can anyone seriously think that the next Democratic president in a similar situation will stake her or his presidency on a more ambitious health care plan? That’s crazy, and would be completely inconsistent with actual American political history. The failure of the PPACA would have rendered federal health care reform a dead letter for generations, and ensured that the next reform attempt wold be substantially more timorous.
To inflict real damage on other people because of an (entirely baseless) belief that it will make a better (and unprecedented) bill harder to pass after we’re all dead may be many things, but it’s not progressive. And if the American political context changes so radically that European-style healthcare is viable, the PPACA won’t stop if from happening.