October 1 2012

NYT Opinion: ObamaCare = A Conservative Idea

Hadley Heath

AEI Scholar J.D. Kleinke is ruffling feathers with his piece in the New York Times, "The Conservative Case for ObamaCare."  Judging by the URL, the piece was at one time named "Why ObamaCare is a Conservative's Dream."  

On what planet??

Obviously, ObamaCare is far from a conservative's dream.  I've also written that it is not the liberal ideal either.  But since liberals are responsible for it, they are clearly now looking to blame the unpopular law on conservatives.

Kleinke rightfully points out that there has been a lot of postition-switching on health policy ideas among politicians on the Left and Right.  Romney signed off on a health insurance mandate in Massachusetts.  The conservative Heritage Foundation toyed around with the idea in the 1990's, and liberal candidate Barack Obama said in 2008 (in opposition to a mandate), "Well, if things were that easy, I could mandate everybody to buy a house, and that would solve the problem of homelessness.”

But ideas are not defined by who supports them.  The policies in ObamaCare, or the Affordable Care Act, should be evaluated separately from the politics of who supports or opposes them.  Then we see that the law is NOT conservative.  

Michael Cannon at the Cato Institute responded to Kleinke's oped by blogging that "ObamaCare is Pro-Market like the Berlin Wall was Pro-Migrant." Cannon writes:

Kleinke’s thesis is that ObamaCare’s conservative opponents should stop complaining. “ObamaCare is based on conservative, not liberal, ideas.”

If one defines conservative ideas as those that emphasize free markets and personal responsibility, there is zero truth to this claim.

  • Free markets require freedom, like the freedom to control your own property, to enter markets, and to negotiate prices and other contractual terms. ObamaCare mandates how people must dispose of their property, imposes tremendous barriers to entry into markets, and imposes price controls and myriad other terms on ostensibly private contracts.
  • Market prices are the lifeblood of a market economy. Kleinke considers them a “flaw” that ObamaCare uses “market principles” to “correct.”
  • As I have written elsewhere, ObamaCare “promotes irresponsibility by allowing healthy people to wait until they get sick to buy coverage. It creates that free-rider problem, which has been known to make insurance markets collapse. Supporters of the law could have taken personal responsibility for this instability they introduced into the market—say, by volunteering to pay the free riders’ premiums. Instead, they imposed a mandate, which attempts to stabilize the market by depriving others of their money and freedom. Forcing others to bear the costs of your decisions is the opposite of personal responsibility.”
  • Employers are hardly “free to decide” under a law that penalizes them for not offering government-designed health benefits.
  • Kleinke is apparently unaware that half of the $2 trillion of new government spending in this “pro-market” law comes from a massive expansion of a tax-financed, government-run health insurance program that crowds out private markets — Medicaid.

National Review also features a take-down of Kleinke's argument by health policy guru Jim Capretta.  Capretta explains how Kleinke "distorts reality to fit his narrative."

Every intervention in health-care policy is judged by liberals and conservatives alike through this lens of “the government or the market.”

So, the question is, which is it with Obamacare? Does the 2010 law move us closer to an effectively functioning marketplace, as Kleinke claims? Or is it a significant and possibly irreversible step toward establishing federal-government control over the health-care system, as most conservatives contend?

One clue can be found in the views of those who were and are Obamacare’s strongest supporters, such as Peter Orszag, the president’s first director of the Office of Management and Budget. Orszag, along with just about every other left-leaning economist and health-policy analyst, has been spending much of his time lately attacking the notion that market-based reforms could work to control Medicare costs. In his view, the only solution is for the federal government to impose cost-control schemes. Of course, in the Medicare program, the government already has the power to impose such controls, which is why Orszag and others are so adamantly opposed to converting Medicare to a system built on true consumer choice.

I think perhaps the reason why some liberals believe they can blame ObamaCare on conservatives ideas runs deeper than who's in support and who's in opposition.  Health policy is complex and even before ObamaCare we were far, far from a free-market system in the U.S. The real liberal dream for health policy is a totally government-centric, single-payer system.  They cry "Medicare for all" or some variation - maybe even a "public option" that will slowly undermine the private options we have currently.  But don't confuse "private" with "free market."  

The insurance companies (and their nasty profits that liberals hate so much) will remain privately owned under ObamaCare.  But they will not be privately operated.  The decisions regarding what products they can offer, where, to whom, for what price, for what time period... even how they correspond with their customers and how they spend money internally... All of these decisions will be dictated now. 

To make this complex issue simple, I point my friends to the spectrum illustrated below.  Before ObamaCare, the government controlled about $1 out of every $2 spent on health care.  This is in part because millions of people are already on very expensive (but not very efficient) government insurance programs.  While ObamaCare isn't single payer (yet), it certainly moves us in that direction.  Haven't you seen the headlines?  Big insurance companies are buying out little ones.  Big hospitals are buying out little clinics.  Private practices are shutting down.  Insurance agents are moving away from health to P&C.  Individual actors - including doctors - are frustrated with their loss of autonomy and are being forced to give in to the bigger power players.  Consolidation, it's called.  Or in English, "fewer options and less competition."  This is the opposite of conservative.  This is centrally planned and statist.

 

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