Why and how Obamacare must be undone
Apr 5, 2010, Vol. 15, No. 28 • By YUVAL LEVIN
In the days since the enactment of their health care plan, Democrats in Washington have been desperately seeking to lodge the new program in the pantheon of American public-policy achievements. House Democratic whip James Clyburn compared the bill to the Civil Rights Act of 1964. Vice President Biden argued it vindicates a century of health reform efforts by Democrats and Republicans alike. House speaker Nancy Pelosi said “health insurance reform will stand alongside Social Security and Medicare in the annals of American history.”
Even putting aside the fact that Social Security and Medicare are going broke and taking the rest of the government with them, these frantic forced analogies are preposterous. The new law is a ghastly mess, which began as a badly misguided technocratic pipe dream and was then degraded into ruinous incoherence by the madcap process of its enactment.
The appeals to history are understandable, however, because the Democrats know that the law is also exceedingly vulnerable to a wholesale repeal effort: Its major provisions do not take effect for four years, yet in the interim it is likely to begin wreaking havoc with the health care sector—raising insurance premiums, health care costs, and public anxieties. If those major provisions do take effect, moreover, the true costs of the program will soon become clear, and its unsustainable structure will grow painfully obvious. So, to protect it from an angry public and from Republicans armed with alternatives, the new law must be made to seem thoroughly established and utterly irrevocable—a fact on the ground that must be lived with; tweaked, if necessary, at the edges, but at its core politically untouchable.
But it is no such thing. Obamacare starts life strikingly unpopular and looks likely to grow more so as we get to know it in the coming months and years. The entire House of Representatives, two-thirds of the Senate, and the president will be up for election before the law’s most significant provisions become fully active. The American public is concerned about spending, deficits, debt, taxes, and overactive government to an extent seldom seen in American history. The excesses of the plan seem likely to make the case for alternative gradual and incremental reforms only stronger.
And the repeal of Obamacare is essential to any meaningful effort to bring down health care costs, provide greater stability and security of coverage to more Americans, and address our entitlement crisis. Both the program’s original design and its contorted final form make repairs at the edges unworkable. The only solution is to repeal it and pursue genuine health care reform in its stead.
From Bad to Worse
To see why nothing short of repeal could suffice, we should begin at the core of our health care dilemma.
Conservative and liberal experts generally agree on the nature of the problem with American health care financing: There is a shortage of incentives for efficiency in our methods of paying for coverage and care, and therefore costs are rising much too quickly, leaving too many people unable to afford insurance. We have neither a fully public nor quite a private system of insurance, and three key federal policies—the fee-for-service structure of Medicare, the disjointed financing of Medicaid, and the open-ended tax exclusion for employer-provided insurance—drive spending and costs ever upward.
The disagreement about just how to fix that problem has tended to break down along a familiar dispute between left and right: whether economic efficiency is best achieved by the rational control of expert management or by the lawful chaos of open competition.
Liberals argue that the efficiency we lack would be achieved by putting as much as possible of the health care sector into one big “system” in which the various irregularities could be evened and managed out of existence by the orderly arrangement of rules and incentives. The problem now, they say, is that health care is too chaotic and answers only to the needs of the insurance companies. If it were made more orderly, and answered to the needs of the public as a whole, costs could be controlled more effectively.
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