The real purpose of Obamacare
Upending American health care is intended as a steppingstone to single-payer
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.