Sunday, October 30, 2016

iCare

Obamacare is a disaster. It doesn't it work as advertised, it's not equally beneficial to everyone, and worst of all, it's proof that compromise and bipartisanship are bad for democracy.

Most people don't think that the ACA is bipartisan at all--the fact that we call it "Obamacare" is an important indicator. The fact that the Republicans have spent a fortune trying to repeal and replace it with "something terrific" furthers the narrative that it was a Democratic scheme shoved down the American people's throat by an unchecked Democratic Congress and a radically liberal President. This narrative is nonsense, and it's a glimpse into why older people so quickly start muttering about history, and doom, and such.

As with previous Slacker Guide political posts (see also: here and here), there is a lesson about education in here. As with previous Slacker Guide posts, you're going to need to indulge me a little before we get there.

Obama isn't the architect of Obamacare. When Democrats do national healthcare, we do what's called "single payer." You think that single payer is evil because the political headwinds blowing in the face of healthcare reform have successfully turned it into a dirty word. Nonetheless, some version of it may be necessary to save us from the current crisis. Single payer is a concept in which the government actually provides health insurance. We didn't go for single payer. In fact, the ACA doesn't provide any insurance at all, but merely tries to keep insurance companies from doing some pretty evil stuff: denying insurance to those with pre-existing conditions, kicking sick people off their insurance for being sick, kicking young adults (aged 19-25) off their parents' plans, and a few other things. That's a good start, but it's not government health insurance. We didn't create national health insurance--in part because the attempt went badly last time. We compromised.

The compromise was built on the notion that industry can do this better. It's an argument we hear in education all the time, and we have the same visceral reaction to this line of thinking that you have to "single payer." I understand where it comes from, though. People outside of education look at Toyota, and Starbucks, and Amazon, and McDonalds and think that industry is pretty good at stuff, and by extension, will probably be pretty good at just about everything. We look at Kaplan, and ITT Tech, and PA Cyber Charter, and Trump University, and conclude quite the opposite.

Because for-profit business was put at the very center of healthcare reform, making health insurance profitable became in the national interest. When a nation is interested in profitability of specific companies, very sketchy stuff starts to happen.

Recently, the ACA hit another rough patch when it was announced that premiums would jump 22% this year. Turns out that profits haven't been quite as expected, and companies are pulling out of markets. Less competition has led to higher prices. Less competition has been brought to you in part by mergers and acquisitions, and... well, Millennials.

Another dirty word of the ACA is the "individual mandate." Bootstrap-pulling Republicans and snake-flag-waiving Libertarians hated the idea of mandating that people buy a product. It does chafe, I admit; mandated personal spending seems like a horrible expression of liberty. However, carefully avoiding anything like a nationalized single payer system guaranteed that we'd be shoveling money toward private insurance companies, as did letting them leave the bargain as soon as it didn't produce the profits they'd expected.

The individual mandate was crucial to this whole thing, however, and the fact that it has no real teeth is part of Obamacare's current predicament. As long as younger, healthier people can pay a small penalty instead of a substantial premium, they probably will. As long as the tax hit comes in the form of a reduced tax refund in April, while open-enrollment ends in January, they may never even see a correlation. As long as young people are permitted to gamble that they'll remain young and healthy and that accidents and disease are for other people, they'll continue to gamble. As long as there is some kind of safety net--emergency rooms in the short term, Medicaid and SSI Disability for bigger stuff--many people will continue to chance it.

There's a great way to increase competition, and it's quite a ways short of single payer. It's called "the public option." Again, you hate this because like "single payer," "Obamacare," and maybe even "healthcare"--think about that for a second--you think the public option is bad thing because it's had terrible PR. The public option, though, is nothing more or less than the government offering an insurer of last resort to those in markets where industry isn't providing a better option. The public option would would be different from corporate insurance in one important way: it wouldn't need to be profitable. It couldn't operate at a loss either, but it wouldn't need to appease shareholders, or pay executives bonuses, or even buy advertising. The reason that people fight the public option so strongly is that it's hard to imagine non-public options competing successfully against the government.

Here's the long awaited tie-in to education. Privatization has been a big problem in healthcare, and it's making an effort to become a big problem in education. Obamacare is like for-profit private charter schools (i.e. maybe a good idea in theory, but ultimately doomed to fail) in these ways:
  1. Money being taken out of the system for shareholders, CEO compensation, and advertising is not going toward making the system better. Private industry needs to be extra-supper-no kidding efficient to overcome this drag. So far, not so much.
  2. Human failings that sometimes plague public institutions (laziness, incompetence, greed...) do not automatically disappear through privatization.
  3. The target constituency is a big key to success. Health insurance works great on easy people (e.g. young, but not babies; athletic, but before their first ACL injury). Education works great on easy kids (e.g. smart, but not too smart, and smart in exactly the right ways; hard-working). This is true regardless of how well you're actually doing it.
  4. Subjective human improvements are often difficult to measure and chart. As a result, we tend to focus on things that are easy to assess and compare, just as we tend to ignore things that may be ultimately more important, but difficult to score. 
  5. Funding incentives can be perverse, and distort the mission well-meaning institutions--especially as they try to hit targets assessed in #4, above. As it usually works now, doctors get more pay for more treatment and teachers get more pay mostly through aging. This doesn't always work well, but alternatives too often make things worse.

Typical Slacker Guide posts use this paragraph to apologize for identifying problems and offering no solutions. Not this time. The path forward is clear: strengthen the individual mandate to compel more people into the insurance market before they get old and sick; offer a public option so that people can buy insurance regardless of industry's interest in offering good alternatives in that particular market; consider moving to a real single payer system that uses the government's economics of scale to actually put pressure on American healthcare costs. Certainly there are more sophisticated and nuanced approaches, but sophisticated and nuanced is part of what has made the ACA such a mess. Let's try those things that have made you so fearful of Obamacare before we declare that it doesn't work.


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