Ramesh Ponnuru makes a misguided attack on universal healthcare, pushing for what he calls "reform" that he says will make health insurance "more affordable and portable." But all this is based on the faulty premise that the present capitalistic system is doing fine. But the problem is that there are two conflicting objectives -- in the field of medicine, the goal is to heal the patient using the best available medicine. On the other hand, the goal of any for-profit entity, regardless of the field, is to maximize the profits for both themselves and their investors.
Right off the bat, Ponnuru admits that the Republicans are losing the battle -- he points to efforts by Republican legislators to devise market-friendly universal healthcare systems. He says that they are doing so in practical, moral, and political terms. The GOP is stuck between a rock and a hard place here -- if they fight universal healthcare tooth and nail, they face the wrath of the voters. But if they go along with it by coming up with ideas of their own, then they risk the wrath of the moneyed interests that have fueled them over the last few decades and risk getting their coffers dried up.
Ponnuru starts off with the point that uninsured people raise premiums by only 1.7% according to the journal Health Affairs in a study done last year. But that simply makes our point for us -- that health insurers are raising their rates to take advantage of rising demand by an aging population and maximize their profits. Thus, lower and middle class people as well as smaller employers are being squeezed out. And this demand and thus rates will continue to rise over the next few decades as our population continues to age. That means that absent government intervention, one of two things will happen -- rates will continue to go up and up, or more and more people will gamble with their health by not having health insurance and/or not going to the doctor when they are sick, risking a major financial catastrophe. Obama's plan would drive rates down by creating competition, thus forcing insurers to lower their rates and offer better packages, or else pricing themselves out of the market.
Ponnuru then attacks mandates. He points out that mandates would drive costs up even more, because of the artifical increase in demand. One of two things would happen under this scenario -- either lower or middle class people are forced into policies that they can't afford, or the government shells out trillions of dollars to subsidize such purchases. So, we must find some way to bring down costs -- the creation of a government-run system would do that by the creation of competition as noted above. We can make our first priorities the passage of the Employee Free Choice Act as well as Obama's green jobs agenda so that people would be better able to bear the costs of such a plan. We could make such subsidies income-contingent, meaning that the less income you made, the less you would have to pay in and the government would pick up the rest. In other words, this is a problem that is only going to get worse if we do nothing -- we have to intervene now in order to prevent costs from getting even more out of control over the next few decades. Thus, we have to see these problems as difficulties we can and must work around, not as reasons to reject Universal Healthcare out of hand.
What would have to happen in order for mandates to work is that first of all, rates would have to be driven down through other means. Most people would sign up for health insurance if they were to get rates that were low enough. The last thing that people would want is for a huge expense to be dropped on their laps in addition to other costs right in the middle of a recession. And there would have to be some kind of enforcement mechanism for it to work -- for instance, if people didn't provide a health insurance card ID#, the IRS would automatically enroll them in the government's plan and then assess the rates against their taxes.
Ponnuru guffaws at Senator Ron Wyden's effort to universalize healthcare by converting all the health insurance companies into public utilities by comparing it to Rube Goldberg. But this is a plan that is well worth looking at. People like George Will call rural electrification one of the most important programs in modernizing this country, as noted by Al Franken in his book "Rush Limbaugh is a Big Fat Idiot." People on both parties now agree that this program was successful beyond its wildest dreams. So, why not look into such an idea with health insurance? If we create competition by offering the same healthcare plan that Congressmen get to ordinary Americans, and then turn all health insurers into public utilities similar to our electric companies, and come up with a mechanism to pay for all that, then that would be the best of both worlds -- Americans would get to choose the plan that is best for them. And anytime health insurers wanted to raise their rates, they would have to prove that the rate hikes are necessary, just like the utilities are now. And we could go even farther with this idea -- we could use some of the subsidies to pay dividends to stockholders to fuel private investment in these companies. They could still make a profit and get capital under this system -- they would simply not be allowed to rip off customers like they are now. As things stand now, they are the only game in town; therefore, like Big Oil, they can set whatever rates they want to.
And once again, it seems like the Republicans are losing the argument on healthcare, seeing that both Ponnuru and the Cato Institute advocate direct subsidies for people with preexisting conditions -- one factor that drives insurance rates up. But that sort of plan would be vulnerable to fraud -- for instance, what would stop me from going to the government and falsely claiming that I have diabetes to get a check in the mail? Would the government wind up paying for every single long-term health problem that arose? In other words, we would have to figure out the costs of such a plan. And the risks of paying a flat rate are that they might not cover every contingency that arises. In other words, if they pay me a flat payment for diabetes, would I be covered in the event of major complications? These are not reasons to reject such an approach; I am bringing this out to point out how normally right-wing writers and institutes are proposing a socialistic solution to our healthcare problems.
Ponnuru questions public support for Universal Healthcare, yet
a recent ABC News poll showed that Americans support it by almost 2-1. And Obama's plan would not involve higher taxes for ordinary Americans, mandates, or rationing in the first place. People would be able to choose their own doctor, just like they do now. So, any attacks on these things are a matter of setting up a straw man, seeing that Obama seeks to achieve this without any of these things.
Ponnuru's idea of making it easier to buy insurance that is not tied to employment is something that is supported by people of all parties. But his idea of tax credits that apply to insurance purchased inside or outside the workplace benefits only the wealthy. I am self-employed and make $34,000 per year. When I write off business expenses, mileage, and postage expenses, I don't make enough income to pay taxes. So as a middle class American, Ponnuru's plan to use tax breaks would not help me to purchase portable health insurance. And if the government adopts Ponnuru's scheme of removing state mandates to cover certain conditions, then there are two problems. First of all, it is hypocritical, especially considering that the Republican Party has been the champion of states rights for the last four decades. Secondly of all, that would mean that many policies wouild not be worth the paper that they are printed on, and even more people who get a major medical condition would not realize that their policy did not cover that situation until it was too late.
And it is mind-boggling that Steve Parente of the University of Minnesota, cited by Ponnuru, could read the tea leaves of the future and claim that 20 million more people wouild get health insurance under Ponnuru's schemes. Even if that were true, that would mean that 30 million people would still be without health insurance. That would mean that even if Ponnuru's ideas were sound, we would still need a universal healthcare plan to get the 30 million people left to insure covered.
We all agree that we should create more portable insurance that people can carry from job to job. That would improve workplace morale, since people would work at jobs that they liked and not have to stay in a job they didn't like just because it had good health insurance. It would strengthen unions, because people could switch from non-union jobs to union jobs without having to worry about their health insurance. But Ponnuru's schemes to do that would dilute a health insurance system that he admits is unraveling even more, and his tax breaks would only benefit the wealthy anyway.
Ponnuru further says that if we were to adopt Obama's plans, employers would drop their health insurance plans like hotcakes and force workers to get a government-run health plan, like Wal-Mart is doing with its employees. In other words, they would not have to worry about insuring their employees anymore, since the government could do it for them. But that would be exactly the shock that would be needed to bring about reform -- this shock treatment would force insurers to offer plans that are as good as or better than the government plan, which would drive down costs. The bottom line is the only language our capitalistic system understands -- when companies see their customers fleeing in droves, that will force them to shut down or offer a better product. People canceling subscriptions to the New York Times in droves forced them to get rid of Judith Miller, and employers canceling their health insurance plans in droves would force insurers to offer better deals in a hurry.