Mutual responsibility, solidarity, democracy, and health care (explained by Matt Steinglass)

A writer for the Economist's "Democracy in America" blog--according to the Daily Dish, it's Matt Steinglass--gets to the heart of the matter.

(I will leave out the more heated opening paragraph where he lambastes those left-liberal Democrats, ranging from Howard Dean and Keith Olbermann to assorted progressive activists, who are ready to jump ship rather than support the way the current Senate health care bill has been watered down and corrupted for the benefit of insurance companies. Maybe they're right, maybe they're wrong--I'm inclined to think they're wrong--but that's a somewhat separate matter. What's most useful in this piece, I think, is its clear statement of the basic principles at stake.)

--Jeff Weintraub

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Economist ("Democracy in America" blog)
December 17th, 2009 (18:00)
Democrats go off on a mandate

[....]

You cannot have universal health insurance without a mandate. Every country in the world that has a universal health-insurance system either requires its citizens to buy health insurance, or includes its citizens in a default insurance programme automatically and taxes them for it (which is effectively the same thing). The reasons for this are simple, and have been covered hundreds of times since the current debate over universal health insurance began during the Democratic presidential primaries in late 2007. If you don't oblige everyone to buy health insurance, then many young and healthy people will bet on not needing insurance, and will decline to buy it. That shrinks the remaining pool such that it is made up of older, sicker people with higher medical costs, and thus premiums will rise. That in turn will cause more healthy people to leave the system. This is the phenomenon of "adverse selection". Ultimately you're left only with rich old sick people, and nobody else can afford insurance. This is known as an insurance death spiral. If you want affordable, universal health insurance, then everyone has to buy in.

[JW: During the Democratic primary campaign, incidentally, this was one point about which candidate Hillary Clinton was right and principled and candidate Barack Obama was wrong and wishy-washy. President Barack Obama wised up on this matter.]

One would think that at this late date in the health-reform narrative, everyone would have grasped this point. One way to read the strange new opposition to the mandate is as a reminder that a substantial segment of the new, energised leftist segment of the Democratic Party began the decade as centrists or libertarians, and were pushed left (in some cases far left) during the Bush administration. Mr Dean, Mr Moulitsas and Mr Olbermann all fit that bill, and you can hear a slight libertarian echo in Mr Moulitsas's current rhetoric. Though, to be fair, the main thrust of Mr Moulitsas's anti-mandate argument is that granting private insurers a monopoly and pouring more money into the system will raise prices unless it is accompanied by European-style provider-cost regulations, which are not currently on the table.

[JW: And as Steinglass acknowledges, this is definitely a valid concern. We should be clear about that. Given the latest developments in the movement of the health care reform effort through the legislative sausage-grinder, there is a real danger that a measure intended to help Americans without adequate health coverage could be turning into a piece of corporate welfare for the insurance industry--thanks above all to the cynical shenanigans of the Senator from Aetna, Joe Lieberman.]

But another way to look at it is this: Americans are still not used to the way universal health-insurance systems work. Mr Olbermann, for example, is angry that working-class Americans will be obliged to buy health insurance that could cost up to 17% of their incomes. Mr Olbermann is right; that figure is too high. But there is plenty of time before 2013 to ensure that no one ends up paying such extortionate premiums, and it's a good bet that, if reform passes, no one will. What happens in systems where people are obliged to buy health insurance is that, if such insurance is unaffordable, governments are forced to find a way for people to afford it, or governments are voted out of office. In the Netherlands and Switzerland, the private-based universal health-insurance models to which America's current reform aspires, governments employ a mixture of provider-cost controls, premium regulations, and subsidies to make sure nobody has to pay 17% of their income for health insurance. If people were forced to pay that much for health insurance, governments would fall—and they have.

I remember what it felt like to move to the Netherlands and be told that I would have to buy health insurance, or I'd be kicked out of the country. For an American, it certainly felt...different. Then I encountered the other difference: I signed up for a plan, and found my premium cost me a quarter what I'd been paying in America. That was the result of decades of constituent pressure on politicians to get health-insurance costs down. Mr Olbermann and Mr Moulitsas are still thinking like free-market consumers of health insurance: they don't like it, so they want out. Of Albert Hirschman's trio of options for consumers in failing organisations, "Exit, Voice, and Loyalty", they're choosing "exit". When you move to universal health insurance, you have to get used to choosing "voice": if you don't like it, you fix it. And if they want their side to continue winning any elections, they should probably get used to "loyalty", too.