This is one of those long analytical diaries your mama warned you about; I hope it's worth your time.
I'm prompted to write by discussions — fights, even — I've been having with moderates and pragmatists here over health care reform. Often being a pragmatist myself, I understand their stance. We have an opportunity to do something great by eliminating insurance company abuses such as pre-existing condition clauses and rescission. The prospect that we won't do it because we reject universal mandates without a public option drives them into a frenzy.
I write this in hopes of calming them down a little.
We who favor fighting fiercely for the public option do so for two reasons: policy and politics.
The public option is better policy: competition will hold down prices and stave off insurers coming up with the next round of abuses that will replace rescission, etc. It's also better politics: our party will suffer with young people if we are the ones forcing them to buy insurance they don't want and can't afford.
If we don't have the votes, we can't solve the policy problem this year. But if we solve the political problem, we can solve it thereafter.
We can solve the political problem using jujutsu.
1. A respectful, despite often repeating the phrase "shut up," message to my pragmatist friends
If you're a pragmatist reading this diary and want to skip down to the proposal without first enduring some meta-discussion of where we stand as a movement, skip down to section 2 to get to the good stuff — but then please do come up here and read this section.
I am not a practitioner of the martial art known as jujutsu (also known as jujitsu), but I admire the idea behind it: "using an attacker's energy against him, rather than directly opposing it."
We are now hurtling headlong into a battle with health insurers. Let's think of it as a sort of sumo wrestling: which side has the force and dexterity to push the other out of the ring. We ought to have the upper hand here — the public is with us, to the extent that they care and understand — but the public gives much less to Congressional elections than do those promoting special interests, so we may not do as well as we should.
Some pragmatists say that we need to compromise proactively, because the most important thing is to get rid of rescission and pre-existing condition clauses and the ensure portability. I hope that they will see and acknowledge why we on what I'll call the "reformist" side think that's bad.
Requiring a universal mandate that creates a "mandate windfall" for health insurers. We — we, our party — will be rightly seen as having taken money out of the pockets of desperate young voters and given it to insurance company executives.
This will not be a politically popular position, to put it mildly. In fact, the Republican strategy is to invite us to walk right into that trap. They want to be able to campaign on how the Democrats took money out of your pockets and gave it to the wealthy. No, it doesn't make logical sense for the party that has gotten more money from health insurance execs to say that — but it doesn't need to.
The Republican strategy here is not to convince young and other economically-pressured voters to vote Republican. It's simply to keep them from voting Democratic. If these voters, who came out strong for Obama last year, say "a pox on both their houses" and sit on their hands in 2010 and 2012, feeling stupid that they were ever seduced by that silver-tongued Obama, then the Republicans win.
That's their strategy. And capitulating on the public option plays right into it.
One way to counter that strategy is to fight like hell, as loudly and publicly as possible, for the public option right now. That is why, when pragmatists want to talk about the equivalent of the "ticking time bomb" scenario used in discussions of torture — "what if we only need one more vote to pass legislation eliminating pre-existing condition clauses and the deciding vote is Raul Grijalva's?" — our reaction is: "shut up."
That's right: "shut up." As with the "ticking time bomb" question regarding torture, there are some questions that divert one from one's task, and that's one. Ask it in the seminar room, if you must, but not here, not now, not in the middle of the fight. But, for the record, here's the answer: I presume that there is a diversity of opinion within the Reformist community pushing for a public option right now.
For some, the primary reason for pushing "our way or nothing" is tactical: honestly appearing and thinking oneself willing to scuttle the entire enterprise — believing and conveying that one has a strong BATNA, or "best alternative to a negotiated agreement" — is the best way to achieve one's goals in a negotiation. We should not have to explain this to pragmatists.
Others Reformists may truly believe that we should, in the end, have no reform at all without the public option. If Raul Grijalva (here symbolically representing other leaders within the Progressive Caucus) changes his mind at the end and compromises, they believe that they will abandon him, primary him. Do you want to argue with them now about whether they will abandon Raul Grijalva if he ultimately compromises, despite their current threats? Shut up! You're not helping.
The fact is that politicians compromise all the time, and voters put up with their compromising all the time, but only weak and stupid losers enter a negotiation advertising their definite willingness to compromise. So, shut up about what the Reformists will do in the end. We'll probably do a lot of different things. Many of us can't predict what we'll do, but we'll surely be influenced by the case made to us by leaders whom we respect.
So we proclaim — and we would like you to agree — that on policy grounds a public option is worth fighting for. We'd like you to agree, even if we don't expect it, that it's worth our drawing a line in the sand over it, worth threatening people with reprisal for caving in. You know — you must know — that the winds of political history erase many crossed and abandoned lines in the sand every year.
That's not the end of the story, though. Remember, we Reformists are motivated both by policy and politics. An eventual compromise could be made much more palatable if, despite worse policy, it involved better politics. That's what the rest of this diary is about: the "jujutsu option." And, frankly, the existence of a jujutsu option, should it become known, would make our passing a public option much more likely, because Republicans would stand to gain less by defeating it.
2. A modest proposal for a jujutsu option
If, despite our resolve, we still reach an impasse at the end, how could we make the best of our situation? Does an impasse mean that our quest for reform is over? No, it doesn't. A jujutsu strategy remains.
I haven't seen this proposal mentioned anywhere — perhaps I'm just insufficiently well-read — and part of my goal in writing today is to elicit criticisms of it. The first criticism I expect is one that I'll rebut pre-emptively: no, I am not folding my tent, I am not negotiating against myself in the way I criticize above. My aim is simply this: to anticipate the forceful arguments that health insurers and their allies will have to be made to kill a robust public option and to use that force against those who exert it.
The jujutsu option is what social scientists call Pareto-deficient or Pareto-inefficient. (These terms are named after a guy named "Pareto"; here's a link if you want to distract yourself for a while.) The idea is that the jujutsu option leaves consumers worse off than they could be, it leaves insurers worse off than they could be, it leaves Democrats worse off than they could be, and it leaves Republicans worse off than they could be — but that's OK for our side so long as it leaves insurers and Republicans comparably worse off than it does consumers and Democrats. If the jujutsu option makes life worse for Republicans than it does for Democrats, it still makes them more likely to be willing to compromise.
Let's start with a few observations:
- If we enact a universal mandate without a public option, health insurers are getting an enormous boon. They stand to gain millions of new customers and to (they think) profit from them.
- Many of us believe that private health insurance (for most medical care, not for the equivalent of what Medi-gap is to Medicare) is not necessary and should not be profit driven. We'd prefer single-payer, but it may not be possible, yet, to get there.
- Forcing people who currently go without insurance to buy it against their will — and most such people are young and have been strong supporters of Obama — risks losing their support for Democrats not just in 2010 and 2012, but for years beyond. They will resent this being forced to buy insurance and they will blame it not on the Republicans who tied the hands of reformers but on the Democrats who enacted the program.
- The stated philosophy behind opposition to a public option is that government shouldn't run such a program, because it either won't do it well or will have so many advantages that it drives private insurers out of business. All of the safeguards Obama can promise do not suffice to convince people that the public option is philosophically acceptable.
So there we are. I believe that if we show resolve, we win — but it's worth examining what happens if we fall short and still want the benefits of the health insurance reforms that enjoy widespread popularity.
The jujutsu move is this: if the Blue Dogs and the balky Senators I'll call the ConservaDems don't want the public sector to run health insurance, we can let the private sector do it. We can contract out the job of serving all of these newly mandated customers to the private insurers, who will be retaining the huge profits that they enjoy under the current system on their current customers. In fact, their profits will grow even higher on their existing customers' accounts because the amount of administrative work they do is substantially reduced.
But there will be a catch: we set the rates that they will be reimbursed for serving this new clientele.
Those rates will not reimburse them sufficiently for profit.
Those rates will not reimburse them sufficiently to cover bonuses or salaries or other compensation above a reasonably modest set level.
Those rates will not reimburse them for expenses relating to advertising.
(Those rates may also not cover a few things that I'm overlooking right now.)
Those rates, in other words, will be the rates that we could charge under the public option, if we had one.
And, oh, if there are any differences in approval or denial of services between customers with their traditional insurance and this new batch of mandated customers, there will be very painful fines.
In other words, the cost of rejecting the public option is: we get to let the newly insured groups hitch-hike on the claimed "efficiencies" — or, for all I know, actual efficiencies — of the private sector. That's the price of their getting the deal they want, without a public option.
Now, the private insurers will be very unhappy with this. While the universal mandate provides the benefit of preventing adverse selection, which they legitimately desire, it's also supposed to be a new cookie jar on which they hope to get very fat.
The price of the deal is: they don't get that. They will provide the services that would otherwise be provided by the government at cost. (And not at an inflated cost, either. We can build auditing into the system.) This is what they take if they successfully block the public option.
Under this system, those not covered by employer-provided insurance would pay their premiums directly to the government, which would then convey them to insurers. (That way, we could control how much the insurers get paid.) If we want to even things out so that these consumers are paying as much as those with traditional insurance, less the equivalent of "profit" and "bonuses" and "advertising expenses," we can collect that money from them, but that money would help supply the fund that would be used for subsidy of those who can't afford premiums. It would also allow us Democrats to say this to voters:
"Hey, we Democrats would like your rates to be lower, but the Republicans made us tie the rates to the rates of the private insurers and those rates are higher than we'd like. We'd still like to pass a public option if you can send enough people to Congress who will vote for it."
Republicans will know that that's coming. They don't want us to be able to make that argument.
Now, you may ask, what keeps insurers from continuing to hike premiums at the pace that they have been? I'm not sure anything does prevent it — that's a big reason that I prefer the public option to this, and single payer to the public option — but I suppose the answer is that, under this system, if they screw around too much with the public that will have become used to no pre-existing condition policies and the like — there will be no going back on that — they pretty much guarantee that before long we do establish a public option, if not single-payer.
(As an aside, I believe that this proposal is quite different from Swiss-style regulation instead of competition. The amount of regulation here is not all that huge: "do the work we contract with you to do, exclude these categories of expenses from the price you charge, and treat people with different kinds of insurance equally." We don't have to trust companies; we just have to ensure that they don't try to squeeze profits out of the unwilling insured. The premiums that those people pay, even without profits, will serve the actually essential function of expanding the pool of insured.)
Now, I'll be honest: I don't love this plan at all. For one thing, I'm offering you only a bare-bones sketch that lacks of lot of necessary details. I would and will fight for us to do something better. But I do think that this bare-bones plan has some virtues worth noting.
The main virtue involves political jujutsu.
The main difference between this plan and the public option is this:
"We will take advantage of your private sector expertise, and even give you whatever benefits you get from greater economies of scale, but you will not profit from the people whom we now mandate will purchase insurance."
Now, I ask you: how the hell do our opponents argue against that?
The argument has been that setting up a bloated federal bureaucracy will cost too much. So we say "OK, you do it. You just have to do it at cost, in exchange for your being kept secure from competition."
What do they say? Do they say this:
"No, we can only function if we make a big profit on every person we serve?"
Great: let them say that. In that case, our reply is:
"Well, then we really do need a public option"
and the Blue Dogs and ConservaDems really have nowhere to hide. Is defending the right of insurers to profit off of EVERYONE truly the principle that Blue Dogs and ConservaDems want to defend? Is that their line in the sand? I don't think that it can be. If it is, we will successfully primary them.
This proposal sheds a spotlight on the real problem dividing the good Dems from everyone else: "should the government be ensuring that private ensurers make even more money?"
We say no. If the Republicans and the Conservadems say yes — well, good luck in the next election, folks, because we're going to tell those newly mandated ensured that we tried to save them money and those folks blocked it.
Now the political dynamic favors us — and it will continue to do so for years.
Furthermore, the Republicans — no fools when it comes to political tactics — will know it.
Here's my prediction: if this plan became the alternative, as we get well into the endgame, to the public option — the insurers would rather have the public option as opposed to the intrusive regulation this would entail.
By putting so much of their force behind the "private administration good, public administration bad" argument, they have allowed us to sidestep and throwing them over in a classic jujutsu move. We can use their force against them.
So, while I don't propose this as the plan I prefer, I also don't mind their knowing that it's out there. Once they know that they lose either way, we'll be able to get closer to a proper solution.
3. Conclusion
I have some other ideas — like letting people borrow money cheaply long-term from the government if they truly can't afford premiums and fall outside of the care limits, and perhaps letting them pay some or all of it off through public service — that go beyond this diary. Maybe that's for another day.
But if this diary can lead people to agree that if we aim for a robust public option and fail we have something pretty good as a fallback, I think that that's a useful contribution.
That is uses our opponents' force against them — that it's a jujutsu move — to me that just makes it sweeter.
My hope for this diary is as follows:
- I hope for your energetic criticism of both the politics and policy of this plan. That's the only way it will improve.
- If the plan appears sound after such testing, I hope people will support it.
- I hope that if the plan is sound it provides for some common ground, short-circuiting some of the debates we've had. Pragmatists: don't ask us the "ticking time bomb" question. We don't know the answer and we need not know the answer until the situation arises. I believe that we will have health care reform this year and that, on policy grounds, it will be worth enacting. The biggest question for me regards the politics. If we work together to push for the best policy we can get if we win, and the worst politics for the other side if we don't, we're doing some good. We can disagree on tactics — threatening, protecting people from threats — but that's going to be largely forgotten and forgiven in the years to come.
The real issues are "can we get the best policy we can?" and "if we don't, can we ensure that voters will punish Republicans and Democratic obstructionists for it?" That should be — and I believe can be — what unites Pragmatists and Reformists right now, when we need unity most. I hope that proposing this plan contributes to that.
UPDATE: If you're interested, please see the follow-up to this diary here. I've realized that we can turn this into a tax-lowering crusade! That's a win for us!