For Republicans, the idea of requiring every American to have health insurance is one of the most abhorrent provisions of the Democrats' health overhaul bills.
"Congress has never crossed the line between regulating what people choose to do and ordering them to do it," said Sen. Orrin Hatch (R-UT). "The difference between regulating and requiring is liberty."
But Hatch's opposition is ironic, or some would say, politically motivated. The last time Congress debated a health overhaul, when Bill Clinton was president, Hatch and several other senators who now oppose the so-called individual mandate actually supported a bill that would have required it.
In fact, says Len Nichols of the New America Foundation, the individual mandate was originally a Republican idea. "It was invented by Mark Pauly to give to George Bush Sr. back in the day, as a competition to the employer mandate focus of the Democrats at the time."
The 'Free-Rider Effect'
Pauly, a conservative health economist at the University of Pennsylvania's Wharton School, says it wasn't just his idea. Back in the late 1980s — when Democrats were pushing not just a requirement for employers to provide insurance, but also the possibility of a government-sponsored single-payer system — "a group of economists and health policy people, market-oriented, sat down and said, 'Let's see if we can come up with a health reform proposal that would preserve a role for markets but would also achieve universal coverage.' "
The idea of the individual mandate was about the only logical way to get there, Pauly says. That's because even with the most generous subsidies or enticements, "there would always be some Evel Knievels of health insurance, who would decline coverage even if the subsidies were very generous, and even if they could afford it, quote unquote, so if you really wanted to close the gap, that's the step you'd have to take."
One reason the individual mandate appealed to conservatives is because it called for individual responsibility to address what economists call the "free-rider effect." That's the fact that if a person is in an accident or comes down with a dread disease, that person is going to get medical care, and someone is going to pay for it.
"We called this responsible national health insurance," says Pauly. "There was a kind of an ethical and moral support for the notion that people shouldn't be allowed to free-ride on the charity of fellow citizens."
Republican, Democratic Bills Strikingly Similar
So while President Clinton was pushing for employers to cover their workers in his 1993 bill, John Chafee of Rhode Island, along with 20 other GOP senators and Rep. Bill Thomas of California, introduced legislation that instead featured an individual mandate. Four of those Republican co-sponsors — Hatch, Charles Grassley of Iowa, Robert Bennett of Utah and Christopher Bond of Missouri — remain in the Senate today.
The GOP's 1993 measure included some features Republicans still want Democrats to consider, including damage award caps for medical malpractice lawsuits.
But the summary of the Republican bill from the Clinton era and the Democratic bills that passed the House and Senate over the past few months are startlingly alike.
Beyond the requirement that everyone have insurance, both call for purchasing pools and standardized insurance plans. Both call for a ban on insurers denying coverage or raising premiums because a person has been sick in the past. Both even call for increased federal research into the effectiveness of medical treatments — something else that used to have strong bipartisan support, but that Republicans have been backing away from recently.
'A Sad Testament'
Nichols, of the New America Foundation, says he's depressed that so many issues that used to be part of the Republican health agenda are now being rejected by Republican leaders and most of the rank and file. "I think it's a sad testament to the state of relations among the parties that they've gotten to this point," he said.
And how does economist Pauly feel about the GOP's retreat from the individual mandate they used to promote? "That's not something that makes me particularly happy," he says.
As Reagan, Buckley Jr., and countless others have said, I didn't leave the Republican Party, the Party left me. I have always been an independent, but used to default to the Party of self-responsibility, fiscal conservatism, entrepreneurship, humble foreign policy, and individual civil liberties. I have no use for a Party that has made golden calves of Medicare, unfunded spending, parasitical banks, war, torture, and Homeland Security. And those that would scream "Tea Party!" are even worse. The movement started by Ron Paul has quickly dissolved into a terrible combination of populism, anti-tax shrieking, and jingoism. Just look at the competition Paul himself is facing for re-election.
With respect to health-care, of course I would in theory always favor market solutions over government intervention. However, when the last century's most brilliant free-market advocates see a clear role for government in health care where profit motives and markets fail, and their arguments have stood the test of time, I am inclined to listen:
A more radical reform would, first, end both Medicare and Medicaid, at least for new entrants, and replace them by providing every family in the United States with catastrophic insurance (i.e., a major medical policy with a high deductible). Second, it would end tax exemption of employer-provided medical care. And, third, it would remove the restrictive regulations that are now imposed on medical insurance—hard to justify with universal catastrophic insurance.
Milton Friedman, Hoover Digest 2001
And:
Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance – where, in short, we deal with genuinely insurable risks – the case for the state’s helping to organize a comprehensive system of social insurance is very strong…
…Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make the provision for the consequences, such communal action should undoubtedly be taken.
Friedrich Hayek, The Road To Serfdom (Chapter 9)
Politics getting in the way of problem-solving, who could have guessed? If I were constitutional dictator, I would evoke the commerce clause to standardize health insurance regulations across all 50 states, the equal protection clause to end unequal advantages for employer-provided insurance, and the general welfare clause to provide/mandate catastrophic health insurance (with high-deductible) for everyone through competing private co-ops, non-profits, and for-profits.
Finally, as a society, we need to re-define the concept of health-care coverage and insurance. I am amazed that people complain of $20-25 co-pays while the national average monthly expenditures on coffee ($74), hair styling ($66), cable television ($60), and cell phones ($70) far surpass those co-pay expenses (take a look at this chart for how many things we spend more money on than health insurance). That, to me, is a problem of entitlement and priorities that government can not fix.
9 comments:
Three short points:
(1)
"As Reagan, Buckley Jr., and countless others have said, I didn't leave the Republican Party, the Party left me."
I question whether Reagan left the Republican Party. His sons disagree as to whether he would support the Tea Party movement, and some forget that he had to overcome the party establishment to be elected. As for the younger Buckley who endorsed Barack Obama, he has never established the conservative credentials held by his father.
(2)
As for Hayek, the need for a society to pool resources together in a common pool of risks is a legitimate argument, albeit one I find inapplicable to our situation. These health care "insurance" proposals provide health care rather than true insurance against risk. I will always support Republican efforts to block the federal government's provision of health care to each man, woman, and child in the country. Among other things, that's too much in the way of individual rights to cede to the government. Nonetheless, I'm open to a discussion about improvements as to insuring against the risk of catastrophic health events.
(3)
Some hypocrisy is present on both sides. The 1994 Republican Revolution essentially ended with Democrats demagogued the the Republicans over alleged Medicare and Medicaid cuts. Fast forward to 2009 and Democrats are defunding Medicare to create a new entitlement program while continuing Medicare's existence -- thus creating two huge liabilities.
The important commonality that may be dawning on both sides is that the nation cannot continue with the current funding levels of Medicare, Medicaid, and Social Security, to say nothing of other social entitlement spending. The key disagreement is whether more government regulation is the solution.
Justus:
As I consider us kindred spirits on most things political, I hate to begin a comment on a pedantic note. But if you meant anyone other than Ron Reagan Jr. and Christopher Buckley when you typed "Reagan, Buckley, Jr.," you might want to try again. Reagan did indeed say something of the sort, but about the Democrat party. However, WFB (that's what we friends get to call him ;-)) famously maintained for most of his public life that he always supported the "rightward-most candidate with the best chance of winning." This was in full display through his efforts to help get Joe Lieberman elected to Congress. In other words, his politics wasn't pure ideology; there was a healthy dose of prudence as well. I am quite certain that he happily voted on many occasions for supporters of "golden calves of Medicare, unfunded spending, parasitical banks, war, torture, and Homeland Security."
John raises Reagan and the Tea Party movement. I would not be surprised if Reagan would have been an admirer of the movement (kinda pointless arguing the hypothetical, if you ask me). He usually held pretty charitable views of peoples' motivations; plus, he doted on the Prop 13 movement in California in the 70s, famously referring to it as a "prairie fire" destined to spread across the country.
Now, as to the substance of your post...
1. Is your lament that the Republicans are now supporting less statist solutions than they once did? If so, what's the problem? I can't exactly tell what your charge is other than hypocrisy (I guess) and political opportunism, and that they aren't heeding the advice of Friedman and Hayek (though you have made the same complaint when they haven't followed Friedman and Hayek on more classically liberal economic terms).
2. You write, "Politics getting in the way of problem-solving, who could have guessed?" So inconvenient, those politics, eh? I say we need more of it, not less. This cult of political unity is becoming a bit concerning. The lynch mob was unified. That didn't make 'em right. If I didn't know any better, I'd think you were a William James pragmatist. I sincerely believe that the obsession with "politics" nowadays is intended to shift the debate away from what the right policies are to who can more efficiently run an ever-expanding state. If we could just get the unsavory "politics" out of our discourse, then Shangri-La would surely await. I'm not buying. (Anybody else noticed Thomas Friedman writing admiringly of China's dictators lately?) And strange to find you, Justus, of all people citing the Preamble of the Constitution as a source of constitutional authority. Hasn't the improper use of the welfare clause as an animating warrant for government action been a rallying cry for classical liberal types for decades?
3. I haven't read it in its full context, but the Friedman quote you cite sounds a lot like (gasp!!!) Republican Paul Ryan's recently released plan, with the notable exception that Ryan's plan would provide a large voucher for purchase of private insurance rather than government provision of catastrophic insurance.
I must say, I am very surprised to find you willing to trust the government with so large an enterprise. Whence comest such faith? (Sorry for the long comment on your own blog.)
Justus, my main complaint is your statistics. I don't know where the New York Times got $66 a month for hair, but I can promise you, I spend a whole lot more than that to keep my hair looking this good.
A few other interesting (at least to me) points. The average American spent more on cigarettes (up 4.6%) than health care, car repair, most men's clothing, financial services, and milk-bread-eggs (combined). Those anti-smoking campaigns are working wonders. And we spent as much on fast food as electricity.
Go America!
In Prague, there stands in the Old Towne Square the majestic Orloj Astrological Clock - it is truly a masterpiece of scientific achievement, artistic vision and horology. Accordingly to legend, the Bohemian king that commissioned the clock had the eyes of the clockmaker put out so that clockmaker could never create a replica or another clock surpassing the complications of the Orlaj. As an act of despair and protest, the clockmaker threw himself into the clockworks, thus killing himself and stopping the clock entirely, for centuries.
Now, one might say that by putting the clockmaker's eyes out, the King invited the very action that destroyed the clock he loved so dearly. Further, the King's action was futile because, by commissioning the most complicated clock in the world, the King had simply invited further horological advancement that would eventually surpass the complications of the Orlaj. Or one could say that the clockmaker, although blind, surely could have invested his talents and abilities into a more productive venture than killing himself and ruining the clock.
Or perhaps the King and Clockmaker could have reached a compromise that would have preserved the clock's operation and uniqueness as well as the clockmaker's life. The King might have benefited from the pride and honor of having commissioned the masterpiece as a testament to his own majesty and support of scientific and technological advancement. The clockmaker may have benefited from the continued enjoyment of his profession and the honor of creating such a magnificent contraption. But all the people of Prague would definitely have benefited from the enjoyment of the clock's artistic beauty, as well as its utility in indicating the time of day and phases of the moon.
Instead, neither the King nor the Clockmaker considered that there might be an alternative to their extreme ideological positions. As a result, for nearly 4 centuries, the clock was correct only twice a day, and even then the clock was correct, not because of the clock's operation, but by virtue of the cyclical nature of time. Thus, the King and Clockmaker are remembered not for what could have been, but for what was not.
OK.
First off: Anon, I am sure for every one of you there is another that spends only a few dollars a year. We aren't all blessed with such a wonderful coiffure.
Next, JB and John, I admit this is sloppy writing, perhaps the sloppiest on this blog. What can I say? I am out of practice. I strayed into an ad hominem attack of the Republican Party, and generalized the situation to a fault. I should have kept a focus on a single issue instead of lumping together a list of grievances.
John, points noted. I especially liked how you phrased your point #2, and I think we agree.
JB, to address your points.
1- My point is that when the smartest classical liberal not only admit the benefits of but actually advocate for a government response to health care, we would do wise to listen, since it is one of the very few areas that they advocate a "statist" solution.
2. OK, I worded this poorly. I agree that talk of bipartisanship and unity is gag-inducing. I love the William James reference, but I am actually advocating logic and reason over pragmatism. Any pragmatic gains would be a side benefit. The issue of the article was not about any overall plan, it specifically deals with the idea of an government mandate that individuals must be covered. It was logic that led Republicans to advocate a government mandate in the past, and now because it is being proposed by the other side, it is being irrationally attacked. I am not asking for a suspension of belief (you should know me well enough to give me the benefit of the doubt as it concerns government's ability to give birth to a utopian society) only that reasonable people agree together on the conclusions they each reached on their own. Finally, I debated using the general welfare clause exactly for the reasons you described. I could count the number of ways that big "G" Government can improve the overall welfare of a society on a single hand, but I would argue that improving the health care of its citizenry is one of them.
3. Beyond taking a stand in favor of a mandate foe CATASTROPHIC health insurance, I am not advocating ANY plan, most certainly the current variations of Obama/Democratic plans. There are elements of Ryan's plan that I like. Notice in my original post that I too am in favor of using private insurers (both for profit and private non-profits and co-ops).
JB, perhaps you were a bit over the top in replying to my over the top post?
I am not placing my trust in government for so large an enterprise. I am asking for government to create a framework and get the heck out of the way so people and the private sector can take responsibility for their own health without the current set of government created problems. See my next post for further explanation.
Monkey wrench alert! President Reagan may not have been as good as some thought. Shame on you, Hannity!
http://mises.org/daily/1544
If this link did not post, then please let me know so that I can copy and paste the entire article.
Over the top? Moi? It's been known to happen.
You'll have to convince me that once catastrophic insurance becomes a requirement for citizenship, every scratch and ailment won't eventually be declared potentially catastrophic by regulatory authorities. It will be impossible to insulate such a program from lobbying and the personal interests of both the regulators and stakeholders in the system.
Rosen - I take it from your story that the citizens of Prague have never been able to tell time since. Or could it be that some enterprising watchmakers revolutionized the practice of telling time by responding to the need to tell time by inventing personal mobile timepieces, thereby circumventing the folly of vesting so much faith in the good intentions of a vain king and obstinate clockmaker on the public dole?
Oh, and lest we forget, the government already pays for over 50% of the health care expenses in this country.
"The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder."
The Theory of Moral Sentiments, by Adam Smith, par. VI.II.42
A personal watch is of little value if it is not set according to some designated standard.
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