Wednesday, October 30, 2013

Obamacare Has Republican DNA

With all the latest fuss about the Affordable Care Act, better known as Obamacare, one key fact seems to fly over everyone's heads.  Despite all the Republican attempts to dismantle it, even going so far as to hold the government hostage to do so, many of its core provisions were originally Republican ideas, no matter how much they like to deny it today.  Even some of those who are against it today supported something very similar in the 1990s.  In fact, one can even say that the healthcare law was largely written by the insurance industry for the GOP, since it is virtually a clone of the plan that the industry had originally wanted all along.  Here's a brief history lesson for those who still don't know.

While many of the more progressive Democrats (as far back as Truman and FDR and even Obama himself as recently as 2008) have long wanted some type of universal single-payer system, most Republicans have traditionally balked at the idea, and have proposed their own alternatives that would leave the for-profit private health insurance system intact.  The first alternative came from Nixon, the same guy who gave us the plague known as HMOs.  Nixon's idea was basically equivalent to Obamacare's employer mandate as well as the Medicaid expansion.  (Of course, despite being Republican, Nixon was actually to the left of both Clinton and Obama.)  The next Republican idea was proposed by the Heritage Foundation in 1989, which was the individual mandate that many despise so much, also combined with a Medicaid expansion.  The insurance industry loved it so much (for obvious reasons) that several Republicans from Gingrich to Romney have at attempted to implement some form of it in the 1990s and early 2000s, often including subsidies or tax credits.  When Romney implemented Romneycare in Massachusetts in 2000, by that point most of the plan was largely identical to what eventually became Obamacare.  When Congress finally put it together, the version that passed in 2010 was essentially inspired by Romney who was inspired by Gingrich who was inspired by the Heritage Foundation and who were all inspired to some degree by Nixon.  And that, my friends, is the long and checkered history of the most controversial aspects of Obamacare, which actually turns out to be somewhat of a misnomer.

The TSAP currently supports a truly universal, single-payer system instead of Obamacare or the status quo.  Clearly, Obama never should have trusted the insurance industry in the first place, and should have stuck with his original plan rather than approve the Faustian bargain that would become his namesake law.  In the meantime, however, we believe that Obamacare could become a steppingstone to single-payer if it is given a chance to work, and the Republicans should give up trying to thwart it.  Of course, we still do not support the idea of the individual mandate on principle, and we believe that it should be delayed by a year if not longer, or better yet jettisoned entirely as it is really not necessary.  As we have noted before, the problem of adverse selection is not nearly as large as the mandate proponents believe, and can be greatly ameliorated by simply providing carrots rather than sticks.  In fact there are already such incentives built into the Affordable Care Act, namely the tax credits and subsidies that make health insurance more affordable.   The relatively narrow "open season" for enrollment would also reduce the problem as well.

Additionally, thanks to the law of unintended consequences, the employer mandate should also be further delayed, truncated, or jettisoned since it appears to have led to part-time employees having their hours drastically cut so their employers don't have to offer benefits, and this is a huge deadweight loss.  But everything else in the Act should remain as is until Congress finally gets the intestinal fortitude to implement a single-payer system despite what their corporate masters want.  Anything less would be uncivilized.

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