This Baby’s Got Legs

Obamacare, still standing

In 2009 the Obama administration went for health care reform. It wasn’t a sure thing. Democrats like VP Biden advised against it. Let the administration build support by concentrating on the economy. But Obama, a realist, knew that midterms punish the President’s party. The Democrats had control of Congress and the Presidency for the first time since 1993, and the moment could pass. Given health care’s extraordinary burden on the US economy, the enervating, badly distributed medical impact on American society, it was the priority.

The Affordable Care Act, hammered out in public sessions, was hugely ambitious, as much because of what it didn’t do as what it did. The left-wing hollered loudly for a single-payer system. They claim this would be a simple, inexpensive solution. The ACA was a compromise between interest groups, including patients, but never aimed to become single-payer.

The left’s analysis runs thin. They point to other developed countries, where health care costs less than half of what Americans pay. All but Japan and Switzerland have single-payer (government-run, Medicaid style) health care. Correlation obvious, they say. But what gets overlooked is that for every health care dollar spent, one is earned. Doctors in the US earn more than twice what doctors in other countries get. American nurses earn half again as much, as do other US health care technicians. Pharmaceutical company business models depend on high US prices to subsidize returns elsewhere. Most significantly, European citizens pay up to double the American tax rate. Much of that funds their health care system, as they spend a fraction of the US budget on defense.

An American single-payer solution that didn’t halve doctor salaries, cut other health care worker pay, that didn’t change pharmaceutical companies, that didn’t increase taxes significantly and cut defense by 40%, would have been just as expensive as health care today. The US would have the most expensive single-payer system in the world, while an extra trillion dollars annually was added to the debt.

Of course salaries and military spending could have been slashed, companies turned upside down and taxes doubled. That would have been shock therapy, like the Russians experienced in the 1990s. Politics is Newtonian, for every action there’s an opposite reaction. Russia descended into contemporary dictatorship, in large part because of the dreadful attempt to change it overnight

That would most certainly have happened in the US, as well. People were already reeling from the financial crisis. The one thing Democrats didn’t expect was the waiting blow-back due to Obama’s ethnicity. He’d been elected as a protest candidate, and his opponent, McCain, resisted racializing his campaign. But once in office the reaction let loose, and focused on the health care debate.

The rest is history. The bill squeaked past, as many Democrats who voted for it were signing their political death warrants. They did so because it was the most meaningful legislation of their lifetime. You can imagine how they felt watching Republicans seize control of government, expecting their sacrifice to have been in vain.

The ACA’s genius is coopting insurance companies. These are the firms most intransigent, the ones who doomed the 1993 Clinton health care plan. By promising insurers a larger market, the government got them to accept more volatility and lower profit margins. It was real deal-making, not the phony sort Trump crows about. Insurers were a bit queasy, but they aren’t the strongest sector. So they agreed.

In fact, the ACA uses insurers to drive costs down. It’s impossible for government to regulate salaries and equipment costs, because of political blowback. But insurers can throttle them during negotiations with hospitals and providers. By going this route, the US may evolve a regime like Switzerland’s, where health insurers are considered like utilities, fully regulated, with specific profit margins and guaranteed services.

Few mention that the ACA’s approach, with carrots like “no preexisting conditions” and sticks like the tax penalty if you don’t have insurance, was originally a Republican idea. A conservative think tank offered it up as an alternative to Clinton-era reform.

Twice the ACA reached the Supreme Court, pretty unexpectedly. Twice it seemed likely that conservative justices, relentlessly partisan, would sink it. Chief Justice Roberts sliced the ACA baby in half, letting red states defund their poor, many of whom voted Democrat. The US is now a two-tier country, where the working class poor in red states will have a significantly lower lifespan than their peers in blue.

But the remaining baby survived. Big insurers aren’t happy. A defunded IRS can’t really threaten young people without employer-provided health care much, because they’re not paying taxes. The government’s subsidies are decent, but they don’t cover the slice of people who earn over $55,000. The insurance companies shot down a government option, which would have maintained an insurance competitor nationwide.

With all these problems, the right gloats that Obamacare will fail. But it clearly has life. They can’t get rid of it. A program that seemed sickly, that faced deathly challenges again and again, remains standing. It’s a testament to good policy, not bad. It’s a testament to good politicians, not bad. It’s a testament to modern society, which is greater than any individual’s perspective.

The baby is no longer a baby. It’s got legs. They can’t drown in a bathtub. It’s a toddler, and walks.