Reason Foundation

http://reason.org
http://reason.org/news/show/beware-of-the-obamacare-revolu

Reason Foundation

Forbes

Beware Of The ObamaCare Revolution

If the bill passes next month, the U.S. health care system will face chronic political warfare

Shikha Dalmia
January 13, 2010

"I am not the first president to take up this cause [of health care reform], but I am determined to be the last one," President Barack Obama declared in September. But history will force the president to eat his smooth bravado if he signs anything resembling what's on the table right now.

Far from settling the issue once and for all, the bill will usher even fiercer confrontations—not only on health care but on constitutional matters of governance as well—that will make the current battle look like the political equivalent of a spit-ball fight.

The Senate and the House begin reconciling their versions of health care "reform" this week. But everyone—barring die-hard Obama supporters—now believes that the outcome is going to be more botched than Michael Jackson's nose. There is a growing consensus in both the right and the left that the individual mandate provision, which is almost certain to be part of the final bill, represents a kind of neo-feudalism. Liberty-lovers (like myself) hate it because it will mean that for the first time ever, Americans will be forced to buy a service as a condition of lawful residence in this country. Americans will lose control over their money without the government even having the decency to formally call for a tax increase.

Progressives are offended too—not because the mandate involves a new leap in state power, but because this power would be unevenly wielded. They would be fine with the mandate if it were accompanied with an outright ban on insurance company profits or at least a public option to drive these profits down. Absent that, all it will do, they argue not without plausibility, is deliver a captive audience to insurance companies.

Since the odds at this stage that the final bill will include their beloved public option are next to zero, the left's next big battle will involve reinstating it while Obama is still in office. The biggest impediment to their ambition—as the current health care battle has made clear—isn't going to be evil Republicans or the venal insurance industry, but America's system of checks and balances. In particular, the Senate filibuster rules.

These rules are what gave blue dog Senate Democrats the power to stand up to their party bosses and derail the public option even though Democrats control the White House, the House and have a near supermajority in the Senate. And so long as these rules exist, enacting this option will only get harder when Democrats lose their overwhelming political advantage as is likely to happen this November. Hence it is no surprise that the liberal punditocracy is demanding the annulment of the filibuster—even though, ironically enough, it was a Democratic-controlled Senate that reinstated it in 1975 after a long hiatus.

Filibuster is not a beautiful thing, but it is a long established tool for checking overweening political ambition—and it can't be abolished without a bruising political battle. To the extent that most laws involve an expansion of government power, scrapping it will inevitably empower the government against its citizens. What's more, a president—a minority of one—will be able to override Congress with a stroke of his pen. But even 49 senators won't be able to stop him from ramming his agenda through their chamber.

This will shift the balance-of-power away from Congress and toward the president, diminishing his incentive to court political opponents, further polarizing the country. If the Tea Party disgust with government expansion is approaching revolutionary fervor now, imagine what will happen if a serious attempt is made to mess with a basic internal check on government power to shove a public option down the country's throat.

But with or without the public option, both the Senate and House bills involve a de facto nationalization of health care. The government already pays for half of the health care consumed in this country through Medicare, Medicaid and the veteran's administration. Another trillion dollars-plus of health care subsidies will give the government a majority stake.

And there is no sign that it plans to be a hands-off stakeholder. The panoply of mandates and regulations that Democrats are proposing—guaranteed coverage of pre-existing conditions; money back to policy holders if insurance companies' administrative costs exceed 10% of their revenues, etc.—will put the government squarely in the driver's seat. No less than the Congressional Budget Office has concluded that "this further expansion of the federal government's role in the health insurance market [that the Senate bill entails] would make such insurance an essentially governmental program."

The upshot of all this won't be unlimited, top-notch health care for everyone, as the Democratic establishment is promising. To the contrary, with individual patients losing even nominal control of their medical dollars, the health care system will be powered less by patient needs, and more by collective social goals dictated by politicians driven by powerful lobbies adept at political marketing.

Nationalized health care systems always and everywhere face a contest between competing interests trying to capture scarce medical dollars. If, say, women with breast cancer shame political authorities into approving expensive cancer-fighting drugs, men launch their own campaign to shift medical dollars to prostate cancer treatment. Patients who lack political savvy or represent disfavored causes—obesity, smokers, homosexuality—inevitably get relegated to second class medical status. If money poses an unfair obstacle for patients in a market-based system as progressives allege, can they with a straight face claim that the political establishment doesn't pose a far bigger obstacle in a government-run system?

But it is not just patients who are pitted against each other; providers are too. Unlike in a market where competition and innovation is always expanding the medical pie, in a nationalized system providers are engaged in a zero-sum game. Every dollar that goes for reduction of infant mortality to a pediatrician is one that doesn't go to a neurologist for Parkinson's treatment.

Since there is no equitable formula to deal with all these competing claims, politicians under nationalized health care are constantly tinkering and experimenting to fashion the system after their own pet causes. Even basic questions as to whether a health care system should be more cost-effective or more accessible become subject to political whim. For instance, England's Labor government some years ago repealed the internal market reforms put in place by the previous Conservative government to bring some cost discipline to the country's government-run National Health Service—only to reinstate these reforms after costs started exploding once again.

In short, if ObamaCare passes next month, America's health care system won't be revolutionized so much as thrown into a state of permanent revolution. Hence, its opponents can either redouble their efforts to strangle this monster in its crib now—or prepare for endless political warfare later.

Shikha Dalmia is a senior analyst at Reason Foundation and a bi-weekly Forbes columnist. This column first appeared at Forbes.com.


Shikha Dalmia is Senior Analyst


Print This