Wednesday, March 28, 2012

Why Liberals and Conservatives Alike Should be Rooting for the Death of Obamacare


            With Obamacare now under the Supreme Court’s review, there is the very real possibility that the law, in entirety or in part, could be struck down as unconstitutional. Most pundits previously speculated that the most controversial part of the law, the mandate, would be upheld 7-2. Now, after three days of oral arguments, many are speculating that the mandate will be struck down as unconstitutional. If this happens, the whole edifice of Obamacare falls apart. Congress would have to revisit healthcare reform. The difference from 2010 is that Congress would likely be under the control of the Republicans (a Republican pickup of the Senate is looking incredibly likely), thus the law would be very different from the one passed by the Democratic controlled Congress of 2010.

            For conservatives, unified in their opposition to this law, a Supreme Court ruling that part, or all, of Obamacare is unconstitutional is a dream come true. The clock would be reset. No messy and difficult political action would have to be taken to repeal Obamacare. Repeal through Congress would require Republican control of the House, Senate, AND the Presidency, which though looking possible is nonetheless still difficult to achieve. Even if only part of Obamacare were declared unconstitutional, it would still be a major victory for conservatives. The law would have to be revisited, but this time with Republican input. Additionally, a Supreme Court ruling in conservatives' favor would place strict limits on government power.

            All of this is pretty obvious. But what I think is less obvious is that a Supreme Court ruling against Obamacare would be, in some ways, a victory for liberals as well. In fact, were I a leftist with a goal for a single payer system, I would be rooting for the Supreme Court to knock down the entirety of the Obamacare law. I say this for two reasons. First, if the Supreme Court were to grant the federal government the power of mandates to private consumers, then that would open up an entirely new sector of potential corruption and abuses by the federal government. Second, if mandates were to be declared unconstitutional, the only avenue to universal health care would be through a single payer system, i.e. Medicare for all, something that is far neater and far more effective in accomplishing the liberal objective of enshrining health care as a right.

I’ll explain more of each of these reasons in the next two paragraphs.

            To explain this first point, I think it is necessary to describe how Obamacare works and what is primarily in question in the current Supreme Court debates. Obamacare, or officially “The Patient Protection and Affordable Care Act,” is a several thousand page law that includes a multitude of reforms and regulations of the health care and insurance markets. The act, contrary to popular belief, did not nationalize health care, or at least not yet. Rather, it decided to expand access to health care through the insurance market, rather than an outright nationalization of the medical field (as Britain did with their creation of the NHS). It created a mandate that all individuals and families within the country, except for certain exceptions such as Native Americans and the Amish, have to buy health care insurance. If they couldn’t afford to, the government would grant them subsidies. If they chose not to, the government would implement a penalty on them, costing a few thousand dollars. In essence the federal government, for the first time in history, is mandating that all consumers must purchase a particular good (in this case, insurance) on the private market or face punishment. The lawyers representing the law argue that since all people must at some point in time entire into the healthcare market (we all require healthcare inevitably) then this market is uniquely subject to mandate powers. But the government has never before claimed this power. If the government can mandate the purchase of healthcare insurance because it improves the efficiency and efficacy of the health insurance market, then why stop there. Mandate the purchasing of vegetables and fruits, since those would improve health outcomes. Mandate the purchasing of a gun, dog, and security equipment, since we are all in the security market. Mandate the purchasing of fire alarms, since we are all in the fire emergency market. Mandate the purchasing of rifles and self-defense classes, since we are all in the national security market. Of course, these examples are all absurd, but so too is the notion of government power stemming from some warped and cynical version of market based utilitarianism.

            The potential for abuse should be pretty clear. Imagine a dystopian future whereby corporations and cabals lobby Congress for federal government mandates in their chosen fields. The agricultural industry would lobby Congress to get a federal government mandate of the purchasing of vegetables. The cell phone industry would lobby to mandate the purchasing of a cell phone, so that everyone has one in case of an emergency. And so on and so on. To a liberal, really to anyone, this would be hell! It’s a scene from one of their worst dystopian nightmares, whereby powerful corporations and the government collude to screw over the little guy. And yet, by arguing for the constitutionality of a mandate, they advance it ever closer to reality. Of course, I don’t think anyone intends for or expects this to happen. But the one lesson to be gained from the expansion of government power and prerogatives is that there are always unintended and unforeseen consequences.

            My second argument is a bit more conventional. The long held liberal goal with regard to healthcare is to create a single payer system. Under such a system, there wouldn’t be any messy mandates, taxes, and penalties. Instead, anybody who wanted to would be able to join a public healthcare plan, similar to Medicare. Over time, this would inevitably eliminate the private health insurance market, but that’s an intended side effect. There are serious problems with this plan, but that is neither here nor there. It is in many ways a far simpler system than Obamacare or system of private markets. In fact, it’s far closer to the ideal Obama advocated in the campaign. An aside, but Obama hated, and still hates, the mandate. He criticized Hillary for advocating it, and rightfully so. With the mandate dead, there are only three paths ahead of us. One is to return to the status quo. But if, as liberals argue, the status quo is unsustainable, then this should eventually collapse as the pressures for reform mount. The second path is an extremely privatized market, something akin to what Paul Ryan is advocating. If you are a liberal and you believe that such a system is unsustainable, then you are again faced with the possibility of reform in your direction. This leads me to the third path, a public option. If Obamacare continues to survive it becomes the single greatest obstacle to a public option. In many ways, it’s a worst of both worlds situation for liberals. It keeps the private market, and with it barriers to access of the healthcare market. Yet it also prevents further reforms along a more equitable line. It is a partially public, partially private system of healthcare, with the worst excesses of each internalized. Moreover, it may do just enough to prevent the system from collapsing, permanently locking in this system.

            It’s all a bit more detailed than I originally imagined. The point is, I don’t think liberals or conservatives should be hoping for the Supreme Court upholding Obamacare. For liberals, it opens up the government to further abuses and it prevents further progress on their goal of achieving universal healthcare. 

2 comments:

  1. Dane, I really enjoyed it and I think it is very well written and stated. I have a question for you on your first argument: that Congress has never penalized those who do not take a specific action. If instead of a tax penalty, the ACA had instead provided a refundable tax credit for every American having health insurance would this be different in your eyes? Afterall the tax code already penalizes you for a long list of actions that you don't take (not owning a home, not having children, etc...and these are influenced exactly as you suggest could happen without acknowledging that it already does happen). I do side with the vast majority of economists who view an insurance mandate as the single best part of the act and an essential first step to any reasonable reform. And you can be conservative and believe in universal coverage and a mandate and you can be a liberal and believe in a market based system such as Switzerland.

    But overall, very nice job. I look forward to reading and learning from you.

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  2. Dane, the more I think about the situation, the more I think the natural analogue for Healthcare is Education. I do not believe either is a "human right", but I do believe that the government has a compelling interest in ensuring that all of its citizens are educated, and that they are healthy. In Education the public supplies a program that all taxpayers can take advantage of, if they so choose, but individuals are not forced to attend public school, they may also go to a private school. The private education industry survives by providing what is seen as a higher quality good, or by filling market niches that government cannot or does not (religious and classical educations). Your thoughts on whether or not a similar situation would work in healthcare, or, more accurately, health insurance? (as this case has shown, conflating healthcare and health insurance confuses the issue)

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