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(cross-posted to Howard Dean 2016)

Image and video hosting by TinyPic I'm not an advocate of repealing Obamacare - lets just make that absolutely clear. All things considered, it's a good law and it is something at a time when anything is sorely needed. Repeal moves us backwards.

That said, I'm not too worried about the arguments before SCOTUS this week, especially yesterday's harsh line on the constitutionality of the individual mandate.

The basic issue is this: the individual mandate is necessary to hold costs down if we rely on the private insurance market, because otherwise free-rider parasites will simply avoid paying their share and cost-shift their last-minute medical emergency expenses onto the rest of us. Here's a great, short primer on the individual mandate that explains this all quite clearly.  


You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

The mandate is fundamentally a conservative idea - it was originated by The Heritage Foundation, the premier conservative think tank. The reason the Republicans are against it now is not policy, but politics: their need to defeat President Obama. In fact, the Republican alternative to the mandate (crafted by Paul Ryan) is essentially identical economically speaking.

Therefore, there really is no ideological reason for Republicans to hate the mandate - it's just a means to their end to deny Obama and sort of achievement or victory. But what about for liberals? Look at the mandate from a progressive point of view: it forces consumers to buy a product from a private company.

Ezra Klein interviewed law professor Randy Barnett, who is perhaps the architect of the case against the mandate and the brains behind the legal argument to repeal Obamacare. I found this part particularly striking:

EK: Perhaps you can clarify a distinction that escapes me here. It’s understood to be constitutional for the government to tax me in order to pay for Medicare, which is a single-payer insurance program that I’ll get when I’m over 65. But it’s not okay for the government to say I have to self-insure on the private market before I’m 65.

RB: There are several answers, but I’ll limit myself to two. First, there’s the text of the Constitution itself. The text of the Constitution itself gives Congress the power to levy taxes on people and on income. We can’t dispute that. It does not give Congress the power under its commerce power, at least not expressly, to make them do business with private companies.

The second point I would make is that the duty to pay taxes is part of your duty to support the government in return for the protections the government gives you. What the government is claiming here is this power — and this ought to disturb people on the left — to make people do business with private companies when Congress thinks it’s convenient.

It definitely disturbs me. Not least because in the US, the price for health care is just too damn high - and that's entirely due to the lack of bargaining power for the consumer:
In America, Medicare and Medicaid negotiate prices on behalf of their tens of millions of members and, not coincidentally, purchase care at a substantial markdown from the commercial average. But outside that, it’s a free-for-all. Providers largely charge what they can get away with, often offering different prices to different insurers, and an even higher price to the uninsured.
The result is that, unlike in other countries, sellers of health-care services in America have considerable power to set prices, and so they set them quite high. Two of the five most profitable industries in the United States — the pharmaceuticals industry and the medical device industry — sell health care. With margins of almost 20 percent, they beat out even the financial sector for sheer profitability.

The players sitting across the table from them — the health insurers — are not so profitable. In 2009, their profit margins were a mere 2.2 percent. That’s a signal that the sellers have the upper hand over the buyers.

The individual mandate will just perpetuate this problem, as Obamacare does nothing to change this fundamental dynamic. And it will be a boon for the insurance companies, who will be adding (by force) millions of healthy people to their coverage, who are cheap to insure. However, despite cost controls built into Obamacare, it's doubtful that premiums won't still increase, continuing to put massive financial pressure on middle class families.

So, suppose that the mandate is found by SCOTUS to be unconstitutional?

There are two main outcomes: one, that the legislation is "severable", ie that the mandate can be pulled out and the rest of Obamacare is left intact. This is the worst possible option because it will result in long-term disaster:  free-riding on a massive scale, which will cause everyone's premiums to rise and reduce the number of people who are insured. In ten years we will be having a debate about this all over again, but the problem will be bigger and harder to fix. Option two is that the entirety of Obamacare is repealed, which will basically be a short-term disaster (but which would probably be good for Obama's re-election).

The question is, what comes next, policy-wise? It's simple: stop trying to shoehorn recycled conservative ideas into policy (which conservatives will then attack anyway). Instead, focus on a real game-changer, one which actually has a chance to succeed in reforming the whole system at once instead of this piecemeal approach.

In other words: Medicare buy-in for all. Anyone, regardless of age, could purchase Medicare coverage.

Back during the health care debate two years ago, Howard Dean came out strongly in favor of the Medicare buy-in approach:

Proponents of the public option should be happy to hear that the Senate is considering a provision that would allow Americans to buy into the existing Medicare program. Throughout this debate, advocates of a strong public option have had to repeatedly compromise with lawmakers who continue to protect large for-profit corporations and ignore the well being of their constituents. Allowing younger Americans to buy into Medicare represents the best and possibly final opportunity to truly reform the health care system as a whole.

I’ve been a long-time strong supporter of opening up the Medicare system to any American who wants to enroll in it, and I continue to believe that Medicare is a proven success story that delivers quality care efficiently. Allowing Americans under 65 to enroll in this program would generate the kind of competition that lowers costs and improves the delivery of care within the private sector. In order to be effective, however, this option must be available to Americans from day one and should be offered as an option within the exchanges, once they become operational.

Look at the chart - Medicare's cost growth is lower than private insurance, precisely because Medicare has negotiating power. And premiums would be affordable:
Last year, the CBO analyzed a proposal from Rep. Pete Stark that would set up a public option in the health exchanges, which would charge Medicare rates to providers, and whose premiums would be set at a level that covers expenses. This makes for a pretty good proxy of what a universal Medicare buy-in would look like. The CBO found that premiums would be about 5 percent to 7 percent lower than that of private health plans in health exchanges. The plan would reduce the deficit by about $53 billion over 10 years.
Unlike the public option, this would be a truly universal option and provide real choice to anyone, even if they have lost their job or their private insurance becomes too expensive. It would help put downward pressure on everyone's premiums, and reduce the cost of health care in general.

If Obamacare survives, then that is a good thing. But if it fails, it's time to stop fooling around and start looking at spending political capital on a real solution. It's clear that bipartisanship and compromise have their limits, especially if SCOTUS strikes down the PPACA. Let's raise the stakes accordingly.

Related and highly recommended: Both Ezra Klein and Ryan Lizza on what happens next if the mandate is struck down.

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