Tuesday, October 29, 2013

So Why Didn't the Dems Go with Single Payer When They Had the Chance?

Why didn't the Dems push single payer in 2009? They had the House, Senate and Presidency. The Republicans were not going to have any part of the Affordable Care Act. So why not go for it all?

Robert Reich, who I think is one of the sillier commentators for the Left, had this to say about it:
Had Democrats stuck to the original Democratic vision and built comprehensive health insurance on Social Security and Medicare, it would have been cheaper, simpler, and more widely accepted by the public.
So again, why didn't they? Don't blame the Republicans. The Democrats had 60 in the Senate and an overwhelming majority in the House.

The hypothesis put forward most often, as best I can tell, is the Democrats decided instead to propose a Republican version of universal health insurance courtesy of Mitt Romney. But why do that? The Republicans in Congress were opposed. Why spend so much time and effort on a plan the Democrats really didn't like and the Republicans wouldn't vote for, no matter if they used to like it or not?

I don't have an answer, only a couple of guesses. My first guess is Democrats weren't united on single payer. Makes sense. If your party controls the Legislative and Executive branches a reason you wouldn't do something is because your party is divided.

Another guess, which I think there is some evidence to support. The voters didn't want single payer. The shellacking the Democrats took in 2010 is (in my opinion) strong evidence voters didn't want single payer. The result of Blue Dogs voting for the Affordable Care Act (ACA) was the extinction of the Blue Dogs and the lurch left of the Democrats and lurch right for the Republicans. Oops.

I think there is another reason some Democrats wouldn't support single payer and why other Democrats supported the ACA: Going to a single payer system would result in sharply higher taxes and/or sharply higher deficits. If the Federal Government is going to be the single payer the money has to come from somewhere, and the thought of going to voters and saying, "Guess what, Taxes are going up a lot...." would result in voters taking up pitchforks. With ACA it was a step towards single payer without the pain of sharply higher taxes.

I also think the Blue Dogs wouldn't go for single payer because Medicare and Medicaid have massive unfunded liabilities already. Adding ALL of America to a system that was already in need of significant tax increases to maintain long-term financial viability was not going to happen.

But there is not such thing as a free lunch. Messing with market prices has consequences and we are starting to see the consequences of that interference. When health insurance (or any commodity) is under-priced, too much is demanded. When health insurance (or any commodity) is over-priced, too little is demanded. The ACA over-prices insurance by mandating minimum coverage levels. It over-prices insurance for the young and healthy. It under-prices insurance for the old, the sick and the poor. In its (laudable) goal of helping the poor and sick it has created a system that will likely hurt everyone. The young and healthy will try their best to not consume a product they find unattractive. Taxes will go up as the government scrambles to meet the promises it has made. It will try to lower payments to doctors, drug companies and hospitals to keep the budget from careening out of control. That under-pricing will result in withdrawal by those providers and on it goes. None of this is a surprise. All of this was foreseen.

To misquote Herb Stein, When a trend is unsustainable, it stops. This will stop. I don't know when, nor how. I doubt the remedy is single payer, but who knows, maybe it is. I doubt it's a Libertarian free market solution; we are too pregnant with government interference in the health insurance market for that to happen. I don't know enough about web sites to know if it can be "fixed" by the end of November. I doubt it. But I didn't think there would be massive incompetence in rolling out Healthcare.gov v1.0 either. Doesn't matter if it works or doesn't by November. The real issues are rearing their heads.


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