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Friday, August 19, 2016

Obamacare Is the Welfare State’s Requiem

The greatest achievement of this administration is an economic disaster and a political humiliation.

In the hymn for the dead for the Catholic Mass, the text of “Dies Irae” starts, “The day of wrath, that day will dissolve the world in ashes.” For Obamacare, this is that day, and it could portend a future in which the mighty ambitions of the welfare-state shrivel and die.

The crowning achievement became a crown of thorns. Think of how Obamacare was supposed to be the domestic apotheosis of the whole of the Obama presidency. It was passed at the end of term one, and – just to be safe – it waited to be implemented in term two.

It was the culmination of a decade, or really several, of expert opinion on how the national health care industry would be designed. The academics, the opinion makers, the top industry reps all met in endless meetings, hammering out all the details with the D.C. masters of legislation. The power of state would make all things right.

At last, there would be fairness and equality. Justice and efficiency too! All the good things about the American system would persist, only it would be much better. There would be falling premiums because the risk would be distributed. Competition would be managed and not chaotic. And all things would be covered for everyone. No one would slip through the cracks.

The Magic of Law

These days it seems like everything is covered but nothing is covered.And it would all happen because some people signed a huge stack of paper. Imagine that! Ink on paper would achieve the highest hopes of humankind for universal health at bargain prices.

But then, with remarkable speed and ferocity, it all came tumbling down. Unusually in the history of the American welfare state, it happened quickly enough that we could watch it all in one generation, even in one presidential term. The failure of the main website on day one foreshadowed a terrible two years of unrelenting meltdown.

Of course there are still some deniers out there. Paul Krugman is doing for Obamacare what Walter Duranty did for Stalin in the 1930s: obliquely admitting the existence of a few snags along the way but insisting they can be fixed with a firmer enforcement hand. For anyone who has actually tried to purchase health-care coverage on this phony market, matters are very different.

The entire welfare state is a long history of slow-motion crises that took a long time to unfold. Decades went by before it became obvious that Social Security wasn’t really an insurance program but rather a transfer from the young to the old. The money wasn’t even saved. It was just moved. And so it was with Medicaid – completely unsustainable – and food stamps. This is corporate welfare, not really a help for the poor. And foreign aid was the same; it seemed like a good idea, but decades later we know that it is wasteful and destructive.

Obamacare was different. The crowning achievement became a crown of thorns. None of the predictions came true; just the opposite, in fact. Millions lost their coverage and premiums have soared for nearly everyone. These days it seems like everything is covered but nothing is covered. It is harder than ever to get insurers to cough up what they are supposed to pay, and the deductibles are frighteningly high.

So unpopular has it proven to be that Obama is afraid even to bring it up. After all, his legislation touched the lives of every single American, and in ways that reach to the core of what we call the quality of life. The idea that we can’t even have assurance that we can get the service and meds we need when we need them is now in question. The legislation that was supposed to make us all more secure has ended in making everyone more fearful than ever.

Let’s Pretend

They thought the state would be a tool of liberation; it became the thing that held us back.In his powerful speech at the Democratic National Convention, he barely made mention of his grand achievement at all. He said, almost in passing, and with no elaboration: “After a century of trying, we declared that health care in America is not a privilege for a few, but a right for everybody.”

But, you know, anyone can declare anything. Dogs bark, cats meow, and people declare things. That’s not an achievement: especially when the symbolic gesture is coupled with practical failure. Knowing this, the speech buried the entire topic. Polls have shown that most opposed the legislation before but put their doubts on hold after it was signed. Once it was implemented, the trend continued again as opponents saw evidence of failure all around them.

Inside the White House, this must be well known. Obama must have been advised at some point: stop bringing this up. Doing so is like Bush bringing up the Iraq War or Hurricane Katrina. This is the greatest failure of your entire tenure as president. The best we can say at this point is nothing.

Ashes to Ashes

It turns out that large stacks of paper don’t automatically bring justice, equality, efficiency, and universal provision.With major insurers now bailing and quietly begging for bailouts, we are at a crossroads. Will we head for a full-fledged single payer system? That goes in exactly the wrong direction. The only way forward is freedom, deregulation, and real competition. Health care should be like the best of industry today: individualized, customized, digitally accessible, with falling prices and expanding access.

The only reason it is not this way is government itself. They thought the state would be a tool of liberation; it became the thing that held us back.

The Republicans say they will repeal the Affordable Care Act. But which parts and how? All of this needs to go:

  1. Government should not be determining what is or must be insured. That should be up to the consumers to decide.
  2. Government should not interfere in contractual relationships between providers and purchasers of insurance, whether individuals or businesses.
  3. Prices for medical services need to be completely decontrolled, and the convoluted market-rigging by a conspiracy of providers, insurers, and government welfare bureaucracies must be ended.
  4. Government should not mandate coverage by employers or privilege employer-provided coverage over individually purchased coverage. Third-party payment should be an option.
  5. Government should not mandate that insurers accept all comers at the same price; that system makes a mockery of the whole idea of insurance itself.
  6. Discrimination for “pre-existing conditions” should not be a criminal act but rather a rational consideration for determining premiums.
  7. Government should not restrict who gets to try their hand at providing insurance; entry and exit need to be competitive too.
  8. Government should never force anyone to pay for a service that he or she does not want. You say coverage is a human right? It’s a human right for a person to refuse coverage.
  9. If you want to get serious about fixing the system, the byzantine pharmaceutical system has to go. Again, let the consumers decide, and, while we are at it, there should be complete free trade in medicine.
  10. The 100-year old medical credential monopoly that has so severely restricted entry into the profession should be dismantled. The market is fully capable of assuring quality, and remember too that there is not one definition of quality.

That’s just for starters, and I’ve probably left some things out. Over the last century, culminating in Obamacare, government has made a terrible mess. The politicians may never admit their errors, but it doesn’t matter at this point. Reality is bearing down hard, and it matters in a huge way.

Surely even the politicians have paid attention. Obama paid a huge price for this disaster. He prayed the prayer from the Dies Irae: “I sigh, like the guilty one: my face reddens in guilt.”

What will happen the next time? What confidence will the government have that they can pull the wool over the eyes of the public at least long enough for the current crop of elected leaders to make a clean escape?

No more. The Obamacare meltdown has destroyed the conceit that government can improve society through expansion and mandate. It turns out that large stacks of paper don’t automatically bring justice, equality, efficiency, and universal provision.

Obamacare could be the last large-scale welfare program ever passed by Washington, D.C.