The Arrogance of Health Reform
I’ve been through this three times. You’d think that someone would notice a pattern. Learn lessons. Avoid repeating dumb mistakes. Alas, it was not to be.
First there was the Medicare Catastrophic Care Act of 1988. A drug benefit added to Medicare was passed one year and repealed the next. It was the first repeal of a major federal welfare program in 100 years. Grass-roots negative reaction was so intense that House Ways and Means Chairman, Dan Rostenkowski, was chased down the streets of Chicago by angry senior citizens. Then there was HillaryCare. After working for a year, the designers of this plan met ignoble defeat. There was never a hearing. Not even a vote. And now there is ObamaCare.
In all these cases, politicians and special interests met behind closed doors to carve up huge chunks of the medical marketplace. They then emerged and announced their plan to push everyone around and tell them what to do in the most intimate and personal aspects of their lives. In all three cases, the voters replied “no.”
You used to think that it was so easy, You used to say that it was so easy. But you’re cryin’, you’re cryin’ now.
The reaction of nonseniors to the latest reform is easy to understand. How many times did Barack Obama say, “If you like the health plan you are in, you can keep it”? Inside the Beltway, I’m sure no one bothered to count. They weren’t listening anyway. That’s because no one in Washington — whether Republican or Democrat, man or woman, old or young, tall or short, fat or thin — no one took this promise seriously from the get-go.
But out in the Hinterland, people did take it seriously. And when it was obvious that the promise was not going to be kept and that no one who voted for ObamaCare could explain why the promise was not being kept, the negative reaction was palpable. Adding to the understandable fear and anxiety was a threat by McDonald’s to abolish health insurance for 30,000 employees and 3M’s announcement that it would end coverage for its retirees.
Folks, this is only the beginning. Over the next two years, many more people will get hit with similar unpleasant surprises. In an earlier Health Alert, I predicted that this election would not go well for people who devised the Affordable Care Act (ACA). If this Rube Goldberg contraption is not opened up and seriously repaired, we will have another election in 2012 just like this one.
As for seniors, this is all a no-brainer. For every $1 of benefits under the new bill, they will bear $10 of cost. As Joe Newhouse explained in Health Affairs, by the end of the decade their access to care will be worse than low-income families on Medicaid. (See the very excellent chart prepared by the Office of the Medicare Actuary.) Not only will seniors have to turn to community health centers and safety net hospitals for their care, they will be the least preferred patients in the waiting lines.
Here the only question was whether seniors’ access to the facts and their perception of reality could be overcome by Madison Avenue advertising techniques. Could Obama’s townhall meetings, slick taxpayer-funded brochures, taxpayer-funded Andy Griffith commercials and AARP propaganda convince seniors that the ACA was actually good for them? Answer: No.
Notice that there is one major reform not on my list: The Medicare Modernization Act of 2004 (MMA). This measure created a new drug benefit under Medicare (Part D) with a 75-year unfunded liability greater than that of Social Security! This time the only protests came from Democrats in Congress, some of whom tore up their AARP cards. Their complaint? They wanted a program twice as large.
[Yes, I am aware of the irony. George W. campaigned on a promise to eliminate Social Security’s unfunded liability and worked hard to do it. Yet he left office having doubled the size of the problem!]
The lessons here are twofold: 1) If you give people something for nothing and pay for it with increased debt, everyone is happy and 2) there seems to be no limit to the public’s willingness to pile up obligations for future generations.
Perhaps the last election signaled that these lessons no longer hold. Let’s hope so.
If seniors (and current workers) had to pay the full cost of Medicare benefits, they would likely rebel because it is not a good value for the money. There is no limit on out-of-pocket expenditures (except for the new drug benefit), only a limited number of hospital days are covered (annually or over a lifetime) and nursing home care is covered only for rehabilitation (a limited number of days).
Now there’s a mental picture. Substitute the current players.
People complain about socialized medicine but they fail to appreciate that the U.S. health care system is already socialized. Nearly half of medical expenses are paid by government (Medicare and Medicaid). More than one-third of medical expenses are paid for through employer plans and private health insurance. Americans only pay 12 cents on the dollar for the medical care they receive. Patients often complain about even paying that one-eighth portion. Yet, medical care is not free. People ultimately pay the cost through taxes or wage reductions. If people understood how much they are actually paying they would demand greater control of their dollars.
A lot of US medical care may be paid for by government but prior to the passage of ObamaCare it was not benchmarked by government. It matters a great deal whether or not the private sector sets the standard for good care.
I agree with Devon. I know quite a few seniors who rave about the beauty of Medicare but fail to realize that they are part of socialized medicine. And I don’t think anyone will be shock to discover that I do not make new friends when I explain that their care is not all that different from the Brits or the Canadians.
Well said by Linda and Devon..
It won’t change until physicians stop accepting third party payments from the insurers and the government…
This won’t happen in our lifetime..
To Joe’s point..
this is available for primary care with fee for care (membership/concierge) modeled practices.
Unlimited access to care to your trusted physician for a transparent price….You determine the quality and value of your physician…
John,
Today’s post is about arrogance. Is it possible that some of the commenters who opine that people “fail to appreciate” or “fail to realize” the extent to which medical care is already socialized are making a mistake similar to the “arrogance” commonly attributed to President Obama’s frequent suggestions that Americans “just don’t understand” all the swell provisions of ObamaCare? Is it possible that people pick and choose the “socialized” things they like and dislike? Maybe we need to dispense with political labels and try to make sense of reality. Political hypocricy is fueling a “brain-dead” state in America and it’s not confined to healthcare. For example, did anyone see proponents of limited federal involvement, like governor Jindal, demand that the federal government stay out of Louisiana during the BP crisis?
“The trouble with socialism is that you eventually run out of other people’s money.” Margaret Thatcher
Yes, the McDonalds benefit todo is significant for more than one reason. As John notes, the public wake up call resulting from McDonald’s threats to drop their benefit program (and it isn’t even an expensive comprehensive program) should be an omen. But anyone hitting the snooze button might get another start when it dawns on them that this incident also gives us an example of how the wheels of political graft get greased. That is to say when a huge multi-national corporation gets tweeked by a dumb law and makes threats, the politicos respond positively with a waiver. I doubt 98% of the employers out there would get a second look under the same circumstances. One could extrapolate this example right down to something very personal, and “death panels” (use your own definition) don’t seem so far fetched.
The scary thing is if John’s example of there not being any limit to the public’s willingness to pile up obligations for future generations is valid, then would there be less willingness to trade off medical treatment for strangers in exchange for lower personal costs? Once the market no longer controls costs it will be controlled by the politicians. The current ruling class statists seem to have no problem demonizing certain groups for political gain…… …Nah. All that happened in the last century, and we couldn’t possibly be ignorant enough to allow the same process to re-occur.
I think that the voters were very informed, especially on the health care issues. Many attempts to sell them a bill of goods went down in flames.
Some day historians will write the history of this whole affair. It will not make for pleasant reading.
The individual components of the ACA, excepting the mandate, remain popular.
Steve
You used to think that it was so easy,
You used to say that it was so easy.
But you’re cryin’, you’re cryin’ now.
Yep, sounds like Obama.