Democrats need not return to health reform, their big victory

Health reform is the signature achievement of the Obama presidency. It was the biggest expansion of the social safety net since Medicare was established in the 1960s.

It achieves a goal – access to health insurance for all Americans – that progressives have been trying to reach for three generations. And it is producing dramatic results, with the percentage of uninsured Americans falling to record lows.

Obamacare is, however, what engineers would call a kludge: an awkward, clumsy device with lots of moving parts. This makes it more expensive than it should be, and will probably always cause a significant number of people to fall through the cracks.

The question for progressives – a question now central to the Democratic primary – is whether these failings mean that they should relitigate their biggest political success in almost half a century and try for something better.

My answer, as you might guess, is that they shouldn't, that they should seek incremental change on healthcare and focus their main efforts on other issues – ie, Bernie Sanders is wrong about this and Hillary Clinton is right.

But the main point is that we should think clearly about why health reform looks the way it does.

If we could start from scratch perhaps most health economists would recommend single-payer, a Medicare-type programme covering everyone. But single-payer wasn’t a politically feasible goal in America for three big reasons that aren’t going away.

First, the incumbent players have a lot of power. Private insurers played a major part in killing health reform in the early 1990s, so this time around reformers went for a system that preserved their role and gave them plenty of new business.

Second, single-payer would require a lot of additional tax revenue – and we would be talking about taxes on the middle class, not just the wealthy. It’s true that higher taxes would be offset by a sharp reduction or even elimination of private insurance premiums, but it would be difficult to make that case to the public, especially given the chorus of misinformation you know would dominate the airwaves.

Disruption

Finally, and I suspect most important, switching to single-payer would impose a lot of disruption on tens of millions of families who currently have good coverage through their employers. You might say that they would end up just as well off, and it might well be true for most people – although not those with especially good policies. But getting voters to believe that would be a very steep climb.

What this means, as the health policy expert Harold Pollack points out, is that a simple, straightforward single-payer system just isn't going to happen.

Even if you imagine a political earthquake that eliminated the power of the insurance industry and objections to higher taxes, you’d still have to protect the interests of workers with better-than-average coverage. In practice, single-payer American style, would be almost as kludgy as Obamacare.

Which brings me to the Affordable Care Act, which was designed to bypass these obstacles. It was careful to preserve and even enlarge the role of private insurers. Its measures to cover the uninsured rely on a combination of regulation and subsidies, rather than simply an expansion of government programmes, so that the on-budget cost is limited and can be covered without raising middle-class taxes.

Perhaps most crucially, it leaves employer-based insurance intact so that the great majority of Americans have experienced no disruption; no change in their healthcare experience.

Even so, achieving this reform was a close run thing: Democrats barely got it through during the brief period when they controlled Congress.

Is there any realistic prospect that an overhaul could be enacted any time soon – say in the next eight years? No.

Trade-offs

You might say that it’s still worth trying. But politics, like life, involves trade-offs.

There are many items on the progressive agenda, ranging from an effective climate-change policy, to making college affordable for all, to restoring some of the lost bargaining power of workers.

Making progress on any of these items is going to be a hard slog even if the Democrats hold the White House and, less likely, retake the Senate.

Indeed, room for manoeuvre will be limited even if a post-Trump Republican Party moves away from the scorched-earth opposition it offered Obama.

So progressives must set some priorities. And it’s really hard to see, given this picture, why it makes any sense to spend political capital on a quixotic attempt at a do-over of health reform – the biggest victory of the Democrats in many years. – (New York Times service)