Ducks, Camels, Stallions and Health Care Reform

We political scientists have a plethora of theoretical rules of thumb, analytical frameworks, and inferential strategies that we use to weigh data presented to us. Here's the one I like: If something walks like a duck, swims like a duck, and quacks like a duck, the probabilities are high that the thing in question is a duck.

We also have this observation: A camel is a horse assembled by a congressional committee.

Which brings us, today, to one of several postings I'm planning on health care reform.

Paul Krugman of the New York Times has helpfully summarized the commonalities of the health reform plans now floating around Congress. According to Krugman's column today, all of the plans rest on four pillars: regulation, mandates, subsidies and competition. Chastising the "Blue Dog" democrats for refusing to go along with their more liberal brethren (who hail from safer districts), Krugman warns that if you "knock away any of the four main pillars of reform . . . the whole thing will collapse — and probably take the Obama presidency down with it."

I think Krugman is right about the system collapsing. But what's more interesting is the unnecessary load these pillars are carrying. Let's go one by one.

Regulation--Krugman means the nationwide imposition of rules that "would prevent insurance companies from denying coverage based on your medical history, or dropping your coverage when you get sick. This would stop insurers from gaming the system by covering only healthy people." Regulating insurance, though, has traditionally been the responsibility of the states. That's why people in different parts of the country get different kinds of coverage. The current plans in Congress would shift this responsibility from the local level to the national level. It's just another way of saying that the feds are going to take responsibility for health care from now on.

Quack!

Mandates--The plans tooling around Congress right now would require everyone to pay, in some way, for health insurance. The objective here is to force the healthy young people into the health insurance system, because otherwise, the concept of insurance won't work. Insurers need a large pool of people who won't be making major claims for benefits to finance the relatively small pool of sick people who will be making claims for benefits, and, of course, to turn a profit. If you only have sick people in the pool, and they all make major claims for benefits, the insurance company can't stay in business.

But . . . 'mandate' is such a clunky, bureaucratic, and vague word, lacking emotional resonance. Hmm, what's another word for a government requirement to take money out of your pocket and give it to someone to whom you'd rather not give it? I know! The word is 'tax.'

Quack Quack!

Subsidies--Health care reform will encounter strong opposition unless everyone can afford it, and so, to the extent that health care coverage costs more than a person can afford to pay, all of the current proposals have the government making up the difference. From the standpoint of the person receiving the subsidy, the subsidy is a discount; from the standpoint of society, a subsidy is a way of making the cost of the thing being subsidized more compatible with a person's resources. This works the same way that, say, a flat tax, extracts an equal percentage of a person's income, regardless of whether the person is rich or poor.

Quack! Quack! Quack!

Competition--The current Democratic proposals call for the creation of a "public plan" that would compete with private insurers so as to hold down premiums charged by the for profit insurers. I don't think I even need to explain this one.

Quack! Quack! Quack! Quack!

There you have it, all of the elements needed to make a single-payer system grow and prosper: a national health care regime, supervised by the national government, supported by a general levy, calibrated not on market values but on a person's ability to pay. Congress is merely trying to change the names of its major components so as to befuddle and confuse the good folk in the hinterland beyond the Beltway. I don't think it will work. Most people can recognize a duck when they see one.

Unfortunately, in assembling all the parts, Congress has an extra piece--private insurance--and it can't quite figure out what to do with it. If it were smart, it would simply recognize that the piece is extraneous, throw it away, and end up with a fine, sleek, muscular stallion. Instead, it's insisting on using that piece, and so it's going to settle for a camel, superbly adapted to the political environment, but awkward, lumberingly slow and ugly.

For Krugman, this would be acceptable. His theory, as he explained it on This Week With George Stephanopoulos, is that it is more important to pass something now and refine it as we go. He points to Massachusetts, the only state to have adopted an insurance mandate for all residents thus far. He notes that Massachusetts has achieved universal coverage, and, having found that its plan for controlling costs was somewhat deficient is trying to address those shortcomings in the next iteration.

I'm grateful for the delays the "Blue Dogs" and yes, even the Republicans are demanding. The last time the government tinkered with health care, we got Medicare Part D: a law rich on benefits but poor on cost control. Congress simply didn't do its homework on that major legislation, missed the law's long term financial, impact and set the country on a path to financial ruin. When we're talking about legislation that will affect every American and transform 17% of our economy, we should take our time, ask good questions, and understand what the real numbers--best case and worst case--are. We've waited over 60 years for national health care. I believe that some form of health care will pass this year. It's worth a few more months to make sure everyone understands what's going to happen and that whatever the government does will ultimately work. It's not clear that Krugman is right, that failing to pass health care reform will doom the Obama presidency. What is clear is that if we get this wrong, we could doom the country.

I will admit, though, to my own naive agenda. I want this process to slow down because I believe that once people truly understand that what Congress is considering is likely to be an expensive way of achieving universal coverage, Congress will go back to the drawing board and sketch out something serious. My hope is that they'll forget about all the nonsense, perhaps laugh about the folly, and deliver the kind of health care plan that, according to polls, an overwhelming number of Americans want. You see, at the end of the day, most people would probably want a stallion instead of a camel.