If Medicare Is OK, Obamacare Should Be Too

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JONATHAN COHN MARCH 22, 2012

If Medicare Is OK, Obamacare Should Be Too

The lawyers challenging the Affordable Care Act will offer many arguments next week, when they make their case in front of the U.S. Supreme Court. But their most central claim is that the law is “unprecedented”—that it represents “a revolution in the relationship between the central government and the governed.” 

As they tell it, the requirement that nearly everybody obtain insurance, or pay a penalty to the government, forces people to pay for something they might not want or need. The constitution, they say, does not “empower Congress to seize control over decisions so basic as to how the people spend their money.”

Put aside, for a moment, the fine distinctions of the interstate commerce clause and other constitutional matters the court must ponder. In principle, is the basic obligation that comes with health care reform—to pay for a mutual protection scheme that some individuals might not find advantageous or desirable—really so novel?  

Hardly. It’s an obligation most of us meet on a regular basis, every time we get a paycheck.

I’m speaking, of course, about Social Security and Medicare. Each program is a form of “social insurance” and each serves the same basic function: To protect us from financial shocks that we cannot anticipate or avoid. With Social Security, the shock is reaching retirement without enough income. With Medicare, the shock is high medical bills during old age. During our working years, we pay into these programs by handing over portions of our incomes, in the form of payroll taxes. And we don't have a choice about it, unless we want to start evading taxes.

The Affordable Care Act is also a form of social insurance. It, too, seeks to protect us from problems that we cannot anticipate or avoid: Illness or accident before we turn 65. To get that protection, we must contribute towards its cost—by obtaining a qualified health plan on our own or, failing that, paying a fee to the government. The government then uses that fee to finance the provision of health care services for those who couldn’t pay for it on their own. The obligation is, if anything, less onerous than the one for Medicare and Social Security. By law, the government cannot impose criminal penalties on people who fail to meet the mandate. The worst the government can do is withhold future tax refunds.

So why is the Affordable Care Act such an unconscionable infringement of liberty, while those two other, more revered programs are not? Some critics have suggested the Affordable Care Act is fundamentally unfair, because it effectively requires relatively healthy people to subsidize relatively unhealthy people. But that is true of Medicare and Social Security, too. The whole point of any social insurance is to ameliorate the impact of sheer chance on life—whether it’s being born with the wrong genes, growing up in the wrong neighborhood, or coming into contact with the wrong physical threats. Social insurance programs redistribute funds from the lucky to the unlucky, on the very sensible theory that any one of us could end up unlucky (and, at one point or another in our lives, probably will).

A truer distinction is that Medicare and Social Security are real government programs: The bureaucracies that run Medicare and Social Security actually distribute the benefits, in the form of checks or payments to health care providers. The Affordable Care Act is a more privatized system, in which private insurance companies are the direct financiers of benefits for many people. But even that distinction is blurrier than it might seem. Medicare has long offered beneficiaries the option of enrolling in private insurance plans, rather than the government-run program. And today about a quarter of all beneficiaries do just that. Those companies operate under close government supervision and regulation, it's true. But so will the companies offering insurance through the Affordable Care Act.

Where the Affordable Care Act clearly differs from Medicare is in the alternative it lacks: Under the Affordable Care Act, many people won't have the option of any public program at all. Their only choice will be private insurance, through a job or through the market place. This is a bug, not a feature, as far as liberals like me are concerned. But it’s difficult to see why conservatives would believe this makes the law more intrusive than Medicare or Social Security. The idea behind channeling coverage through private insurance, and the rationale behind excluding a public plan from the options, is to allow the free market more room to operate.

Conservatives should know this better than anybody, because they have spent a generation making this argument and lobbying to privatize all social insurance. They’re the ones who keep trying to transform Medicare into a voucher system. They’re the ones who talk about replacing Social Security with a system of private investment accounts. But if it’s wrong to make obtain private health insurance for when they are under 65, why is it ok to make people obtain private health insurance for when they are over 65—or build retirement pensions by depositing money into private equities?

Constitutionally, the differences among these programs may matter. The legal justification for Medicare and Social Security comes from the federal government's power to levy taxes. And even some judges who have ruled in the favor of the Affordable Care Act have said (wrongly, in my view) the government cannot make that claim, because advocates didn't use the term enough when debating the law.

But insofar as the legal case against the Affordable Care Act rests upon a broader argument about liberty, it doesn’t make a whole lot of sense—unless the critics of health care reform are ready to junk Medicare and Social Security too. Something tells me they're not.

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posted in: jonathan cohn, politics, congress, medicare, u.s. supreme court

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