The real pur­pose of Oba­macare

Up­end­ing Amer­i­can health care is in­tended as a step­ping­stone to sin­gle-payer

The Washington Times Daily - - Metro - By Robert W. Merry

Pres­i­dent Obama’s Af­ford­able Care Act is prac­ti­cally dead. Mean­while, the old sys­tem it was meant to re­place is dead. Thus, Amer­i­cans face a long and bit­ter strug­gle over what kind of health care sys­tem they will have.

Look­ing at it from Mr. Obama’s po­lit­i­cal phi­los­o­phy, the sit­u­a­tion isn’t all bad. True, he took a huge cred­i­bil­ity hit with his oftre­peated prom­ise that Amer­i­cans could keep their doc­tors and health insurance if they liked them. His po­lit­i­cal stand­ing isn’t likely to re­cover from that.

Still, he moved the coun­try sev­eral steps closer to gov­ern­men­tal con­trol over health care, which is what he re­ally wanted. As the coun­try strug­gles to pick up the pieces from the mess he cre­ated, one big op­tion will be a sys­tem even more fully un­der gov­ern­men­tal con­trol. Ex­pect a new lib­eral push for some­thing ap­proach­ing a sin­gle-payer sys­tem, in which the gov­ern­ment pays for all health care costs, ei­ther through gov­ern­men­tal con­tracts with insurance com­pa­nies (as in Canada) or by con­struct­ing and run­ning its own health care pro­gram (as in the United King­dom).

Though Mr. Obama fa­vored such an ap­proach, he couldn’t sell it for two rea­sons: First, most Amer­i­cans liked their med­i­cal plans un­der the old sys­tem; and, sec­ond, Amer­ica is in­trin­si­cally wary of big-gov­ern­ment so­lu­tions that in­trude un­duly into their pri­vate lives. So he opted for Oba­macare.

Oba­macare brought forth a tremen­dous in­crease in fed­eral in­ter­ven­tion into health care and held out prospects for even more. The idea was to con­trol the price and pa­ram­e­ters of cov­er­age in ways that pushed more and more Amer­i­cans into the health care ex­changes set up un­der gov­ern­men­tal aus­pices. No more in­di­vid­ual-mar­ket cherry-pick­ing, in which health care cus­tomers could se­lect insurance plans de­signed for their spe­cific needs — no pre­na­tal care for women past child­birth age, for ex­am­ple, and no big de­ductibles for largely cat­a­strophic care for young and healthy peo­ple not wor­ried about rou­tine health needs.

That’s why Mr. Obama’s “you can keep it’’ prom­ise was so egre­gious — be­cause he and his top of­fi­cials knew the idea all along was to squeeze the in­di­vid­ual insurance mar­ket prac­ti­cally out of ex­is­tence and get those peo­ple into the ex­changes. There’s more to come, as em­ploy­ers re­spond to loom­ing insurance-rate in­creases and cum­ber­some man­dates by elim­i­nat­ing em­ployee health-insurance pro­grams and opt­ing in­stead for de­fined con­tri­bu­tion to­ward em­ploy­ees’ in­di­vid­ual health op­tions — which means, most likely, the ex­changes, where gov­ern­men­tal con­trol reigns.

That’s not what most Amer­i­cans ex­pected. They thought, based on what they were told, that the gov­ern­men­tal ex­changes would op­er­ate in par­al­lel with the old, pri­vate pro­grams, and they could choose which path to fol­low, their old path or the new.

Thus, the con­tro­versy over the evap­o­ra­tion of the in­di­vid­ual insurance mar­ket is only the be­gin­ning, and a small be­gin­ning at that. But it un­der­mined the coun­try’s trust in Mr. Obama so pow­er­fully that he felt com­pelled to re­verse the pol­icy and seek ways to res­ur­rect the old in­di­vid­ual mar­ket. That’s where the fate of Oba­macare was sealed.

By re­vers­ing him­self as he did, Mr. Obama struck a blow to the very heart of his own health care con­cept, which rests on the premise that peo­ple who don’t have insurance or only mod­est poli­cies must be forced into more ex­ten­sive poli­cies with big­ger price tags. The idea was that those ex­panded premi­ums would un­der­gird the ex­changes’ risk pools by pay­ing for the sub­si­dized health care of less well-off peo­ple. As The Wall Street Jour­nal puts it, “On the ex­changes, in­di­vid­u­als earn­ing more than $46,000 [a year] or a fam­ily of four above $94,000 don’t qual­ify for sub­si­dies and must buy over­priced insurance. If th­ese middleclass Oba­macare losers can be forced into the ex­changes, they be­come fi­nanciers of the new pay-as-you-go en­ti­tle­ment.’’

The Oba­macare en­ti­tle­ment can’t sur­vive this risk-pool hit, how­ever po­lit­i­cally im­per­a­tive it was to save Mr. Obama’s stand­ing with the Amer­i­can peo­ple. As more and more Amer­i­cans find their health care plans fad­ing into obliv­ion, the re­sult will be so­ci­etal dis­rup­tion and waves of po­lit­i­cal anger and ag­i­ta­tion. Thus, Oba­macare will die, and some­thing will have to re­place it.

That some­thing won’t be the old sys­tem, with its 47 mil­lion unin­sured and out-of-con­trol costs. The coun­try has moved be­yond it in prepa­ra­tion for Oba­macare. So the strug­gle be­gins for a new sys­tem to bring some or­der and sta­bil­ity to the loom­ing pe­riod of chaos. Lib­er­als will launch a huge push for the big en­chi­lada, the sin­gle-payer sys­tem.

Con­ser­va­tives, mean­while, will seek to harness mar­ket forces (rather than gov­ern­men­tal man­dates) as in­cen­tive fac­tors to break the spi­ral of ever-in­creas­ing health costs in the old em­ployer-insurance sys­tem. There will be plans to elim­i­nate the cor­po­rate tax de­duc­tion for health plans al­to­gether, cou­pled with in­di­vid­ual tax re­bates, with the idea that em­ploy­ers would stop buy­ing health insurance for work­ers but pass some of the sav­ings on to them (akin to the John McCain plan from his 2008 pres­i­den­tial run). There will be pro­pos­als to merely cap the ex­clu­sion for em­ploy­er­pro­vided health cov­er­age, thus mak­ing con­sumers of health care more cost-con­scious­ness and break­ing the in­cen­tive for ever more ex­ten­sive and ex­pen­sive insurance plans. Health Sav­ings Ac­counts, tax ad­van­tages for in­di­vid­u­als who ac­cu­mu­late sav­ings to pay for their health needs, will play a role.

What­ever emerges, it won’t be Oba­macare, and it won’t be the old sys­tem. Both are dead. Thus will we see a mas­sive strug­gle for the fu­ture of Amer­i­can health care. Let the games be­gin.

ILLUSTRATION BY HUNTER

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