Paul Krugman has described the ACA as a “kludge.” It is too complicated, and those complications are
making the system inefficient and expensive, while depriving many
Americans of health insurance. Konczal notes four specific problems:
- The process of signing up for health insurance in the federal exchange (HealthCare.gov) is complicated because everyone must be means tested. The government must be able to confirm virtually every datum the applicants enter: their identity, their citizenship, their income, their eligibility for coverage through other federal or state programs, etc. All this is necessary to determine whether each applicant is entitled to a subsidy, and if so, the amount.
- A further complication is that each applicant must be matched to a private insurer. The government must check that all of the thousands of insurance plans meet their minimum standards. They must clearly communicate the important characteristics of each policy to consumers, even though the insurance companies deliberately try to confuse them. They must contend with insurance company sabotage such as canceling plans abruptly and arbitrarily raising rates.
- The ACA faces the threat of adverse selection—the possibility that the oldest and sickest among us will patiently navigate the exchange and eventually purchase a policy, while the youngest and healthiest will ignore the law and hope the penalty for not buying insurance is unenforceable. If Americans in poor health are more likely to buy insurance, the costs go up and there is a very real possibility that the system will collapse.
- Finally, the federal government has to deal with attempted sabotage by states controlled by Republican governors and legislatures, exemplified by their refusal to set up state exchanges and to participate in Medicaid expansion, which is denying coverage to over 5 million low income Americans.
Summarizing these
problems, Konczal describes two approaches to social insurance, which
he calls Category A and Category B.
Konczal describes
Category A as the “neoliberal” approach to public policy. Neoliberalism has, in recent years, become a synonym for
conservatism. It refers to policies that reduce the role of
government in public life through strategies such as privatization
and deregulation. Category A social insurance sees the government as
“an enabler to market activities, with perhaps some coordinated
charity to individuals most in need.”
Category B, on the
other hand, encompasses progressive programs such as the New Deal and
the Great Society. It sees certain goods and services, such as food,
shelter and health care, as basic human rights, and attempts to
remove them from the marketplace by providing them to everyone.
There are very few
pure examples of Categories A and B; most policies fall somewhere
along a continuum between these extremes. However, the ACA falls
clearly into Category A. This is not surprising because it is a plan devised by a conservative think tank which was promoted for decades by
the Republican party. Social Security and Medicare, on the other
hand, fall into Category B. Medicaid is a hybrid, since it is means
tested and administered (and regularly sabotaged) by the states.
In the last three
decades, we have seen a gradual rollback of Category B programs.
This is not surprising, given the extent to which the political system is controlled by corporations and wealthy individuals. In the
old days, the Republicans favored Category A and the Democrats
Category B. As both parties have shifted to the right, the Democrats
have shifted their allegiance to the Category A policies favored by
their corporate donors, while many Republicans advocate eliminating
social insurance entirely.
Whenever a public
service is privatized, it moves from Category B to A. This is what happens, for example,
when you turn over tax dollars to charter schools, so that
corporations can make profits by educating children as cheaply as
possible. Of course, the ultimate disaster for the country would be
the Republican plan to privatize Social Security, since another Great
Recession—a virtual certainty in the absence of financial
reregulation—would have the potential to impoverish our elderly
population.
PA Governor Tom Corbett's proposal to expand Medicaid would move this program further
toward Category A through a combination of stricter means testing and
turning the program over to private insurance companies. Dave Steil, President of Healthcare 4 All--PA, has written an op-ed critizing the Corbett plan. He rightly notes the waste of money that would result from
turning Medicaid over to private insurance companies. However, he
overlooks the hardship that increased means testing, premiums and
copayments will impose on working class Pennsylvanians.
Advocates of single
payer health insurance—obviously a Category B program—are going
to be urinating into a stiff wind for the foreseeable future.
However, there is some hope. It is the four Category A
characteristics noted above that are turning the ACA into a “kludge.”
While Republicans will argue for repeal, pragmatists are likely to
notice that if you drop some of these characteristics, you can
improve health outcomes while saving money. And if you drop all
four, you have single payer.
You may also be interested in reading:
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