Monday, March 22, 2010

Don't Look Back In Anger

Back from New Orleans and ready to blog again. If you want to see what I was doing while I wasn't blogging/researching, go here.

This space has been pretty quiet on healthcare for most of the course of its meandering trip through Congress. That's because I have a lot of mixed feelings about this bill - there were good things about it, but it was clear from the beginning that Congress was never going to deliver the kind of structural reform that our health care system needs, so I kind of checked out of the process and watched with amusement as liberals made bullshit claims about how this bill was the greatest thing since sliced bread and conservatives made even bullshittier claims about how this bill would DESTROY AMERICA ZOMFG !!!!111!!1!1!!. Now that the long health care fight is almost over, and some sort of incremental reform has reached President Obama's desk, I guess I should comment on the bill, what we've learned from the debate process, and what that means for a battle I care a lot more about - the looming fight over immigration reform...

First, the substance of the thing. The way I see it, there are two main problems with our current health care system. One is the employer-based insurance delivery system. Currently, government subsidies encourage employer purchasing of health care over individual purchases. The main problem with this is that employers aren't going to buy a policy that suits individual employees. Thus, there's no way an individual can force companies to compete for his/her specific business. The second problem is the reliance on insurance for routine care. Imagine a car insurance policy that paid out every time you filled up your gas tank or got an oil change. Pretty ridiculous, right? But that's exactly the kind of health insurance policy we expect to have currently. This leads to cost distortions so bizarre that a fancy 4-D ultrasound actually costs less than a routine OB/GYN visit during pregnancy - but since the insurance is paying for the latter, you don't know that.

The bill's centerpiece is an individual mandate and subsidy similar to that proposed by Republicans in the early 1990s and more recently implemented by the Romney administration in Massachusetts. This isn't a horrible idea in that it starts to chip away at the employer-based system. Removing the subsidy for employer-based health benefits - which I believe was a proposal from McCain during the 2008 campaign - would have done more to move us towards a consumer-centered system, but politically that's too much of an upheaval to expect all at once. I'm uncomfortable about the mandate, but the individual subsidy is a very good idea. However, the bill charges employers if the government subsidizes its employees' care - which is an absolutely awful idea.

While the bill does take shots at the employer-based system, however, it utterly fails to address the problem of overinsurance. The excise tax on super-inclusive plans is a good idea, but I think it's out in the reconciliation package. A better plan would have been to encourage people via subsidies to buy catastrophic health insurance, either from the government or from private insurers, which would pay out under unforeseen circumstances like serious illness or accidents. You know, like how insurance is supposed to work. Instead, if I remember correctly, the mandate actually includes lower limits on the benefits your plan can provide, which only perpetuates the overreliance on insurance that is distorting costs in our health-care system.

There are also a series of minor tweaks to Medicare and Medicaid, and a whole bunch of regulations on insurance coverage. All of these things are important, but none are particularly huge. All in all, we got an incremental reform where deep structural changes were needed. It's hardly the historic reform bill Democrats are touting today. Of course, it's a far, far cry from the socialistic government takeover of health care that Republicans are whining about.

Which brings us to what we can learn from the debate over health care. The most important thing Democrats can learn is this:

Don't muffle the fringes.

If you're not familiar with the concept of the Overton window, let me digress a second to describe it to you. The Overton window describes a range of policies that are acceptable to most people. The idea here is that these Overton windows can be "moved" - that is, people can be led to accept previously unthinkable policy ideas - by advocating ideas so far out of the mainstream that ideas just a little bit out of the mainstream seem acceptable by comparison. While Overton himself never did so, it's clear to me that this concept applies to rhetoric as well.

Policy-wise, this means the Democratic desire to take single-payer off the table early was a big mistake. We were never getting single-payer health care, but having people like Weiner and Dingell out there advocating it would have moved the Overton window towards the left a little bit, making liberal ideas like the public option seem a lot less radical by comparison. As it happened, though, the public option became the left fringe idea, and was thus sacrificed.

And furthermore, Republican attacks followed the rhetorical Overton window model. So many on the far right were spouting such obviously ridiculous rhetoric - death panels! IRS conspiracies! - that telling tamer-sounding lies like "government takeover" became a "reasonable" argument. What's more, Democrats allowed this to happen by not responding to right-wing demagoguery until it was too late. When absurd statements like the death panel thing go unanswered by facts, they can grow a life of their own, and when that happens, Republicans can go pretty far out into the right-wing thicket and still be thought of as reasonable. Democrats, meanwhile, seemed to keep a lid on their far-left allies, which gave them no cover to support the bill and still sound reasonable doing so.

This is especially important now because next on the table for Democrats is an issue that's almost trivially easy to demagogue - immigration. Democrats need to do three things better on this issue. One is to allow liberal think-tanks and left-wing members of Congress to propose a sweeping liberalization of immigration laws, possibly involving complete amnesty for illegal immigrants and a radical restructuring of the quota system (and perhaps its abolition altogether). This will give congressional Dems cover for a better immigration reform proposal. Two, Democrats should not muzzle the far left. Allow ultra-liberal members of Congress and left-wing pundits to sound off, because this makes mainstream Democrats look good when they take a position to the right of their peers. Three, Democrats need to anticipate Republican demagoguery and answer it with facts. I can tell you what the Republican talking points will be right now: immigrants bring crime, they take jobs away from Americans, they'll change our culture, they won't speak English. Democrats would be wise to point out a few things immediately. One, that immigrants (even illegal ones) commit crime at lower rates than native populations, and that high-immigration cities like New York and El Paso are among the safest in the country. Two, almost every economist worth listening to generally links immigration to economic growth, which will benefit even blue-collar workers. Three, even among modern Hispanic populations over 90% of third-generation immigrants speak English as their first language, a rate which compares favorably with previous non-Anglophone immigrant groups. And yeah, they'll change the culture somewhat, but if you like spaghetti and drink green beer on St. Patrick's Day then you can just shut the hell up.

Immigration will be a hell of a fight, and this close to an election it'll make the health care battle look quaint. Here's hoping Obama and the Democrats are ready.

Oh, you thought I was going to post an Oasis vid here, didn't you? Sucker...

A long, strange trip indeed.


Ben said...

People currently see health insurance coverage as equivalent to being able to get medical treatment. (One reason we all get so pissed when insurance denies coverage of something we believe is necessary.) Perhaps a paradigm shift is in order to treat health insurance the same as car insurance...a protection against catastrophic costs.

But within the current paradigm, let me say this: One of those regulations on insurance coverage that you barely mention is abolishing lifetime limits on coverage. Another is forbidding insurance from kicking you out the moment you get sick....y'know, when you actually NEED insurance? Given Christy's chronic health problems (palpitations and the like) the fear of reaching that lifetime limit or of being kicked out because of her troubles was/is very real for us. When these regulations kick in, I will sleep a lot easier at night.

Chad said...

Jeff, I didn't realize until reading this post that we have three important things in common:

1. We have almost identical opinions of the core problems of health care: the employer-based system (which creates the double-whammy in which being unemployed usually means being uninsured), the mistaken treatment of certain or near-certain expenses as insurance, and overinsurance.

2. You're familiar with the Overton window! Incidentally, I'm directing a libertarian seminar this summer in which I'm almost certainly going to be using the Overton window as a central plank of my opening talk. (Prior to his untimely death, Joe Overton was the VP of the free-market Mackinac Center.)

3. We are in complete agreement on immigration.

Jacob said...

I also wasn't aware how close our views on health care are. You writing checks to Cato yet?

Matthew B. Novak said...

If you're interested, my thoughts are over on my blog.