OBAMACARE DECEMBER 12, 2013
Republicans and their supporters continue to fuss about the limited physician choice and relatively high deductibles that shoppers on the new Obamacare marketplaces are finding. Those of us who follow health policy continue to be amazed and exasperated at this spectacle, because Republicans have spent years arguing that this is what health insurance should look like. Among the bewildered is Ezra Klein, at the Washington Post, who had the good sense to call up a few conservative policy experts—the ones who actually know what they’re talking about. And that produced one very revealing quote.
It comes from Avik Roy, the senior fellow at the Manhattan Institute and columnist at Forbes. Readers of this space know that Roy and I have had some differences in the past. But Roy knows health policy and he has been forthright about how he’d redesign the health care system if he had the chance. “Giving consumers the choice of narrower physician networks and higher deductibles, in exchange for lower premiums, is a good thing," Roy says. "The problem with Obamacare is that people are trading narrower networks and higher deductibles for higher premiums. And that’s because of all the other stuff that Obamacare does to the insurance market."
Precisely. The real difference between left and right now is the "other stuff" Obamacare does to the insurance market. And what’s that other stuff? It’s “guaranteed issue” and “community rating”—the requirements that insurers sell to anybody, regardless of pre-existing condition, with varying rates or benefits. It’s the creation of a minimum standard for coverage, so that all plans must cover at least 60 percent of the typical person’s medical bills and include a set of “essential health benefits” from hospitalization to mental health to rehabilitative services to maternity care. It’s the availability of generous tax credits, available to people with incomes as high as four times the poverty line and worth thousands of dollars a year in some cases. And it’s the individual mandate—the requirement that people pay a fine if they decline to get coverage when it is both available and affordable.
By and large, liberals support these measures, although they might quibble or have reservations with some of the specifics. Conservatives are generally skeptical. They endorse some of these ideas in isolation or in moderation, depending on which conservative you consult. But they oppose the ideas in combination. Most conservatives, for example, support some version of tax credits to offset the cost of insurance. But when you look at the plans closely, the credits are typically less generous and, absent aggressive reforms of the insurance market itself, either leave many more people without insurance or leave the insured facing much greater exposure to medical bills. At the same time, the conservative plans cost less, in the sense that insurance prices don't rise as much and government doesn't subsidize coverage as much.
Reasonable people can disagree about which approach makes more sense. It depends on how you weigh tradeoffs between security and choice, what you believe about the pros and cons of regulation, how big a price you put on comprehensive coverage, and so on. Somebody like me would say Obamacare's upsides outwiegh its downsides; somebody like Roy would disagree. But it would be good to have that debate, rather than argue about changes that conservatives accept as much as—and probably more than—most liberals do.
Update: I added a little more detail, in order to highlight one the very real trade-offs (specifically, the cost of financing more coverage) that conservatives don't like about Obamacare.