Conservatives and the Mandate

Conservatives and the Mandate

ObamaCare is a specific instance of a broader truth about America’s health-care policy: It’s grossly regressive.

  • By HOLMAN W. JENKINS, JR., The Wall Street Journal

ObamaCare’s individual mandate, it turns out, is no more popular with the public than it is with the GOP hopefuls. A USA Today poll this week finds that 72% of voters believe the mandate to be unconstitutional.

Only fools and angels, then, might tread forth to defend a now-embarrassing history of conservative support for the unpopular mandate. Former Bush speechwriter David Frum, in a blog post, courageously applauds pundit Ann Coulter for a similar act of courage. "It’s not as if we had a beautifully functioning free market in health care until Gov. Mitt Romney came along and wrecked it by requiring that Massachusetts residents purchase their own health insurance," Ms. Coulter wrote, in a sort-of defense of Mr. Romney.

From a more ecumenical perspective, Businessweek happily observes of the debate: "President Barack Obama never tires of noting [that] the notion that the government should require individuals to carry health insurance was first pushed by Republicans, encouraged by the conservative Heritage Foundation. . . ."

Context is everything. Barack Obama says his mandate is about extending health care to the uninsured. But look closely. It’s also partly about forcing the young, healthy and otherwise uninclined to overpay for health insurance so the money can be used to pay for heavy users of the health-care system.

To put a round guess-estimate on it, people who might consume $900 worth of health care in a year will be asked to buy $5,000 policies so the money can be used for somebody else.

We won’t try to synthesize what Newt Gingrich, the Heritage Foundation, the Manhattan Institute and others once had in mind when they championed a mandate in a now-disavowed past. But as a general rule conservatives have supported a mandate to take care of a "free rider" problem—that is, to make people pay for their own health care, not as a tax to pay for someone else’s.

This is a distinction, as they say, with a big difference, and, as we’ll see, a conservative mandate is all but meaningless unless part of a larger body of reforms.

Reuters

Mitt Romney

Let’s step back. ObamaCare is a specific instance of a broader truth about America’s health-care policy: It’s grossly regressive. The giant tax subsidy for employer-provided health insurance is most rewarding to those in the highest brackets. Medicare is regressive: It transfers money from working people, with few assets, to the elderly, who own most of America’s wealth. Even Medicaid, the program for the poor, is morphing into a program for helping the middle class shield its assets from long-term care bills.

The cumulative impact of these interventions has given us the health-care system we have. Because it subsidizes third-party payership, it destroys any hope of price-value comparisons by consumers. Because it commits the cardinal economic impossibility of trying to subsidize everybody, the end result is not better health but higher costs in the form of rising prices and the provision of services of questionable value.

Now to worry about a free rider problem, as conservatives have done, is almost pointless when everybody is getting a subsidy. Those who don’t buy private insurance and don’t qualify for Medicaid simply receive a different kind of subsidy, through emergency room bills transferred to the rest of us. Think of it this way: Such a person is merely recapturing a bit of the subsidy he’s been paying through his taxes to support health care for people who are mostly richer. Yes, his actions distort the market, but it’s a drop in an ocean.

But suppose the policy bias in favor of third-party payership were corrected. Suppose insurance became insurance again, i.e., protection against large, unpredictable costs. Suppose patients began paying for a bigger share of health care out of their own pockets. Suppose providers responded by putting price-tags back on medical services and competing to offer value-for-money.

A young, healthy person might still choose to skip insurance and rely on the emergency room. But the problem would be a small one, because many fewer people would be voluntarily uninsured, because insurance would no longer be an overpriced luxury to anybody not benefiting from a direct subsidy.

By the way, this critique of health-care policy is not a conservative critique, but was once shared by Bill Clinton and plenty of Democrats. Nor are the policy difficulties insoluble: The solution can be summarized as "stop subsidizing the unneedy" (and a well-conceived tax reform would go a long way toward doing just that).

In a sense, ObamaCare, RomneyCare and George W. Bush’s major legislative efforts were but revisitations of a single question: Are we ready to act? So far the answer has been no, with the tiny exception of President Bush’s promotion, in his otherwise execrable Medicare drug act, of health savings accounts.

Why politicians like to shovel benefits at the capable, self-sustaining majority is not a mystery—that’s where the votes are. Yet notice that what little progress has been made in corralling health insurance costs in recent years has come from corporate America, using health savings accounts and other tools to make subsidized users cognizant of the value (or lack thereof) of the services they consume.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: