What to Do When a High-Profile U.Chicago Economist Says the Airline, Telephone and Package-Shipping Industries Prohibit Use by Preexisting Flyers, Callers and Shippers: If you’re a liberal, take this ball and run with it!
There’s no question that the Affordable Care Act’s rollout has been “rocky,” to borrow the common parlance of the Beltway. The Web site troubles and shifting health coverage for some Americans, despite over-assurances from President Obama during the 2010 political debate, have naturally turned off some people. A much-ballyhooed poll from CNN yesterday shows that support for “Obamacare” has dropped to an all-time low.
But conservatives toasting the apparent turn in public opinion ought to look a little closer at the polling data. It’s true that only 35 percent of Americans favor the law, while 43 percent oppose it. But there’s a crucial third group: 15 percent oppose the ACA because it’s “not liberal enough.” That means that 50 percent of Americans either support the law or want policy changes that shift leftward.
— Should Democrats press the public option?, George Zornick, The Plum Line, Washington Post, Dec. 24
Wow. A man after my own heart. It’s a recognition that, with the single exception of the disastrous rollout of Healthcare.com, which is purely a technology issue, the high-profile issues concerning Obamacare since Oct. 1 highlight not generic problems with government involvement in healthcare insurance but instead the problems of a system that piggybacks on the for-profit private insurance industry and neo-federalism-structured federal programs that rely heavily or entirely upon cooperation of state governments.
Zornick, whom I had never heard of before last week when he began a stint as one of the short-term, rotating Plum Line bloggers–and who in my opinion is fabulous–is a liberal. And what’s happening, suddenly, is something I predicted in recent posts here: That the individual-market insurance industry’s fall-of-living-dangerously, during which (led apparently by the various Blue Cross companies) it drastically overplayed its hand in the last three months by, for example, telling premium-holders, falsely, that their cancelled policies could be replaced only by vastly-more-expensive policies, would trigger reinvigorated calls for a “public option for the single-payer market and maybe even for a single-payer option across the board.
But something else is happening, as well: The right is recognizing that the problems with Obamacare, rather than broadening the appeal of a return to the status quo, is instead more likely to dramatically broaden the appeal of a public option. And, because employers that provide healthcare coverage are scapegoating Obamacare for their unrelated decisions to further limit their already-increasingly-limited premium contributions and the like, the formerly unthinkable–a single-payer-for-all option–may well soon become the very thinkable.
Zornick broaches the possibility, writing:
So what if Democrats pushed for it? A public option would save $100 billion over 10 years, according to the Congressional Budget Office, and could offer respite from the plan cancellations and rate hikes that still persist with private insurers with the ACA in place.
There’s essentially no chance President Obama will take another bite at the health-care apple, especially with so many other priorities to tackle: his professed desire to combat climate change and income inequality before he leaves office, along with getting comprehensive immigration reform passed. But strategists on 2016 presidential campaigns ought to take heed.
Imagine a candidate who comes out early, and strong, for adding a public option to the ACA exchanges. It could become a signature issue with the liberal grass roots during the primaries, and it wouldn’t be a bad general election issue either — the polls in 2010 showed support for a public option among Republicans and independents as well as Democrats. As Ezra Klein has noted, the sudden disappearance of the public option from Democratic politics has been “a bit curious,” but perhaps its day is coming.
I do disagree with Zornick in one respect. I do not think this issue must or necessarily will wait until the 2016 Democratic presidential primary campaign gets underway. I think it should and may well be an issue in some congressional and Senate elections in 2014. And apparently, so does rightwing University of Chicago economist John H. Cochrane, whom I had never heard of until I began reading Paul Krugman’s NYT blog regularly.
In a cringe-inducing yet revealingly panicky Wall Street Journal oped published yesterday, Cochrane acknowledges that the substantive problems with Obamacare probably are making a single-payer option or a single-payer system attractive to a broad swath of people because, well, the status quo is becoming untenable and because Obamacare has shown that major changes in the role and manner of healthcare insurance in this country are actually possible. Yes! Here in this country! Just as they were in every other advanced society in the world!
Cochrane’s piece is titled “What to Do When ObamaCare Unravels: Health insurance should be individual, portable across jobs, states and providers, and lifelong and renewable.” The premise for his prescription is as transparently ludicrous as that prescription–the right’s favorite–has always been. The answer, he claims, is … complete nationwide deregulation of the insurance industry! Release the for-profit insurance companies to compete nationwide, and deliverance will come! Because, of course, it is the lack of nationwide competition that is what’s compelled the industry to dramatically raise premiums annually for decades now, and to create and increasingly limit “provider networks,” and to blacklist from the individual market anyone who once had a hangnail, and to spontaneously cancel policies or greatly increase the premiums of people when they do need medical care, and to have lifetime claim limits.
He does not offer an explanation for why nationwide competition would change any of this when statewide competition, even in very large states, has, suffice it to say, not. What he does instead is point to the deregulation of the telecom and airline industries, and to the competition that FedEx and UPS provide vis-a-vis the post office–the latter a.k.a. “the public option.” Specifically, he says:
On Dec. 3, President Obama himself said that “the only alternative that Obamacare’s critics have, is, well, let’s just go back to the status quo.” Not so.
What about the homeless guy who has a heart attack? Yes, there must be private and government-provided charity care for the very poor. What if people don’t get enough checkups? Send them vouchers. To solve these problems we do not need a federal takeover of health care and insurance for you, me, and every American.
No other country has a free health market, you may object. The rest of the world is closer to single payer, and spends less.
Sure. We can have a single government-run airline too. We can ban FedEx and UPS, and have a single-payer post office. We can have government-run telephones and TV. Thirty years ago every other country had all of these, and worthies said that markets couldn’t work for travel, package delivery, the “natural monopoly” of telephones and TV. Until we tried it. That the rest of the world spends less just shows how dysfunctional our current system is, not how a free market would work.
What? No mention of the cable companies? Comcast, Cox Communications and Time Warner Cable must be offended at the slight. (They’re people, remember.) But, setting aside the possibility that Cochrane is simply employing the modern right’s hallmark treatment of rightwing ideology as tangible fact, he seems to be claiming that AT&T, Verizon and Sprint preclude access to their service by people who may use it a lot; that airlines charge exorbitant surcharges for frequent flyers; and that FedEx and UPS keep narrowing the number of places you can use their service to ship to, and have a lifetime limit on the amount of diesel fuel your packages can consume–leaving you to the mercy of the public option for shipping and mailing.
The “natural monopoly” of telephones was in fact exactly that–a natural monopoly–until the advancement of technology made it no longer so. Same with the highly-regulated TV industry in this and other modern democracies. We, and other countries, deregulated these industries–i.e., “tried it”–when dramatic advancements in technology removed the need for regulated monopoly of those industries. I guess Cochrane thinks that fact will escape us all. Or else he thinks technology is about to replace human medical practitioners and expensive diagnostic apparatus, and that we shouldn’t bother to wait until this transformation is completed to switch from a state-by-state insurance free market to a national one.
I also guess that the WSJ headline writer thinks no one will read the full article. That subtitle, it turns out, should read, “Catastrophic health insurance should be individual, portable across jobs, states and providers, and lifelong and renewable.” That is what Cochrane says in the article.
That the rest of the world spends less shows how dysfunctional our current system is; we now have the stamp of authenticity of that fact from one of the horses’ mouths. And since our insurance system has always been a free-market one, it indeed shows how a national free market would work: the same as the current state-by-state free market here works. Which is to say, dysfunctionally. The fact that the rest of the advanced world spends less, and covers all its citizens, and–almost to a nation–achieves better results overall, shows how terrifically functional our system could be.
Much to the surprise of, I’d guess, just about everyone, the private healthcare insurance industry is employing Obamacare to unwittingly promote single-payer in one or another form. And Professor Cochrane, who knows this, has now given the prerequisite permission to the mainstream centrist punditry to acknowledge this as well. Thanks, AnthemBlueCross! And, thanks, Professor Cochrane.
Out of the mouths of babes …. (No apt metaphor left behind. That’s my motto!)
In a similar fashion, did the striking down of Usury laws in Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp. set up a highly competitive environment for credit at less than usury? Not that I can tell. And if USPS disappeared who is to say FedEx and UPS would remain low cost?
I’m pretty sure that FedEx and UPS do in fact rely on USPS to deliver packages that aren’t profitable for them to deliver themselves. If it wasn’t for the post office, there would be many people effectively unable to receive any home deliveries. And building a shipping network with “last mile” capabilities everywhere is incredibly expensive, with not much return on the investment. Not really something that more than one (but realistically probably zero) company would do.
Ah, another free marketer doing the conflation jive.
The purchasing of health insurance is not the purchase of health care which is the purchase of the application of the knowledge of health and healing and the extendent actions.
We do not need a free market in, we do not need choices of the formula to be used in paying for the service of getting my dollar to the one who will apply the knowledge of health and healing.
I mean really people. Think about it. As was noted here at AB, trying to decide with “plan” (a formula for assuring some of your money gets to the knowledgeable one and keeps the holder of the formula in business) is now currently an effort in gambling. Which bet do you want to make?
And yes, I have signed up using my state’s health connector. I had a free market alright. All options were BC/BS. There were no other companies.
If we progressives/liberal want to move this to where it should be, then we need to become as adamant as Coberly is with SS and insist that at all times the proper positioning of health insurance and health care.
I mean really, do you find any other purchase in this financialized economy where your choices are so perverted for getting your money to the person who is providing the end use product?
What this model of purchasing health insurance reflects is a high finance, multiple level, multi player Wall Street banking deal as to how much risk is absorbed by each party to the deal if it goes south. Except that you’re the only player playing with your life’s risks. And as has become the norm, the more one can afford the risk personally, the least risk the system will force upon them.
It is what happens when we let MBA’s, Financial minds and Economist determine the structure of society. It’s even worse when the only real understanding of how life works is based on their chosen profession.
You know, it the old: if the only tool you know and have is a hammer, then everything looks like it’s a nail.
TERRIFIC comments, all. Yes. Yes. And, yes.
Make MEDICARE/MEDICADE the single payer, call Boehner @1-202-225-0600. If The republicans really want to get rid of Obamacare, Then replace it with something that WORKS and has a long history of success—Medicare/Medicade.
Since I spent much of my working life both working at the post office and criticizing its descent towards privatization and have spent my retirement studying and writing about postal issues, I was immediately attracted to this post.
Professor Cochrane knows not of what he speaks but is simply making knee jerk Pavlovian comparisons to spur Right/wrong-thinking salivation. As Jeremy points out above, UPS and FedEx rely on the public postal network for much of their last mile delivery. The Postal Service is brake against their semi-monopoly powers in package delivery. The Postal Service does much more than that. Millions still rely on the postal network as an affordable bill presentment and payment system, without that system it is likely that many would face fees and charges to do basic transactions. For many the postal money order system provides basic banking services (it could and should do more).
Our postal rates remain the lowest in the world, despite the howls of entitlement from the direct mail industry about the rate increase.The postal network provides a basic physical and intellectual infrastructure, we could use it to better advantage if we weren’t so all fired intent on privatizing it and shedding both employees and functions which fall solidly under the domain of public goods.
We’ve lost over 200,000 good middle class jobs over what is nothing more than a Congressional accounting scam designed to give the appearance of a failing industry. Mr. Cochrane’s example demonstrates that he is little more than a dealer of derp.
“Mr. Cochrane is a professor of finance at the University of Chicago Booth School of Business, a senior fellow of the Hoover institution, and an adjunct scholar of the Cato institute.”
I am trying to figure out how our society has reached the point where this descrition of Cochrane’s bona fides is viewed by some as a resume and by others as a rap sheet.
I for one see the silver lining in the dark clouds that inhabit Mr. Cochrane’s mind; he did not include a single mention of tort reform as the other necessary part of his “healthcare solution”.
the horse’s MOUTH?
I don’t have time to read this rambling hot mess, but I offer an excerpt from a newsletter column I wrote for medical practice administrators:
“One of the following appears to be true:
The Obama administration knew the degree of disruption to be caused by ACA but didn’t tell the truth, or
The Obama administration does not understand the disruption caused by ACA, or most likely
A little both both.”
2014 is gonna be a wild ride. healthcare.gov was a minor glitch compared to what is coming.
“I don’t have time to read this rambling hot mess”
It is statements such as this which causes people to not give you much credence. You do not offer insight or explain much and offer anecdotes as answers when many of us have gone deeper into the discussion. Your persistence in declaring the past medical situation as acceptable in the US for a large part of its citizenry flies in the face of common sense. Other than sheer obstructionism to a need to reform Healthcare insurance and the subsequent industry revising the services for fees cost model, I see nothing on the table.
Why don’t you write up a post expanding more on your thoughts regarding the Post Office. Especially this thought: The postal network provides a basic physical and intellectual infrastructure, we could use it to better advantage…
Send it to Dan and I’m sure he would post it. I think this is an issue people need to read about. I get that health care funding nonsense. I believe We the People have a right to have a means to supply for our self a basic service of life risk reduction without having to pay the cost of a profit. In this case it’s the life risk reduction of communication.
EMichael, it’s a rap sheet. Anytime you see U of C Economics Dept.,you know what he/she is going to say; you know that there is no data to support the opinion expressed; and you know that Krugman and Stiglitz will take it apart in a couple of succinct paragraphs.
Mark’s points on the USPS are on the money. Just as the private delivery services cherry pick the customers they will serve (i.e. profitable) so too do the unregulated private insurers cherry pick insureds. Only a government approach can be expected to serve all, including the unprofitable.
An actual reason why these admins are going to have problems would be nice, not to mention an actual reason that these problems are going to be caused by the ACA and did not exist before the ACA.
Perhaps people would take you more seriously if you actually explained the causes instead of telling us about the effects.
One more thing.
Medical providers are responsible for at least 1/3 of the healthcare mess the US is in.
I can live with them beiong forced to change.
If you like your freedom, you can keep it.
The requirement regulates activity that is commercial
and economic in nature: economic and financial
decisions about how and when health care is paid for,
and when health insurance is purchased (end quote)
If regulating each persons decisions is not “liberal enough” for 15% of the respondents, what else might they want?
but who says health care NEEDS TO BE “commercial and economic”?
we have tried the Pffreeee Market approach to health care in this country and it obviously doesn’t work.
so if a “community” (as in we are all in this together) approach will work better, I am willing to give up my freedom to get sick and die in a ditch, even if I have to pay my share of it “to the government” instead of to the crooks that run the insurance companies and the crooks who call themselves doctors.
my objection to obamacare has always been that it simply provides more victims for the crooks, and taxes me to pay for the window dressing.
You gotta love the people who still play the “regulating each persons decisions” card while totally ignoring the fact that the result of individual healthcare decisions are paid for by the community(inefficiently) if the people decide not to pay.
EMichael said: You gotta love the people who still play the “regulating each persons decisions” card (end quote)
Yeah, I thought the civil war decided that issue. That a good number of congressmen still believe they can regulate another person’s decisions indicates that we have not moved too far from the bad old days.
If you are willing to give up your freedom to make your own economic decisions, you are a fool. If you are willing to take away another person’s freedom, you are much worse than a fool.
You miss the crux of the issue pointed out by Coberly and also EMichael, your freedom to make economic decisions impinges upon other’s freedom to utilize their economic choices.
C’mon, Michael H.
You are advocating giving people access to a system without paying for that system. Hiding behind some libertarian nonsense about “freedom”.
If you want to spout such nonsense, then be consistent and insist that with the “right” not to purchase health insurance comes the responsibility to never access the system regardless of need unless they pay in full for all costs.
Let me know when you find people that would do that.
If only the President and PPACA supporters in Congress were so open in their disdain for what you refer to as “libertarian nonsense about freedom”.
Will you say that those that refuse to pick cotton cannot wear clothes?
Those who will not grow wheat cannot eat?
What else must we surrender?
What underpins obamacare is not mere nonsense and incompetence, but rather an age old scourge that seeks to control not only each persons actions, but each persons decisions/thoughts.
There is nothing wrong with the control of a system that every single person accesses. And a lot wrong with thinking people should have the benefits without the cost.
It is the philosophy of two year olds.
Or certain ducks
EMIchael said: There is nothing wrong with the control of a system that every single person accesses. (end quote)
Such as food, clothing, and shelter? And transportation, education, …
But of course you are not actually advocating mere control of the systems which supply these things, you are advocating control of people, and more precisely their decisions/thoughts.
For mimimum standards of all those things? Of course I am. It is called civilization.
What I am advocating is the understqanding of the utter and complete stupidity that describes this libertarian point of view that somehow believes every individual in the country should decide exactly what portion of government they will pay for.
I never move out of my house? I don’t want one penny to go to Transportation of any kind.
I am a pacifist? I do not want one penny to go to defense.
I have never been sick and I will never be sick? I do not want one penny to go to healthcare.
Course, the civilizations that ever even came close to adopting such a system, even before the Industrial Revolution, does not have much history.
I applaud your frankness, and only wish the President and Congress were so open about wanting to regulate each person’s decisions.
From PPACA: The requirement regulates activity that is commercial and economic in nature: economic and financial decisions about how and when health care is paid for, and when health insurance is purchased (end quote)
However, your implication that there is only a (false) choice between two extremes is extremely silly. Somehow we have managed to have lots of defense spending, lots of transportation spending, etc. without regulating each person’s economic decisions. Congress has never claimed the power to force a person to grow wheat or to purchase a car, that nonsense started with the present regime and PPACA.
Congress most certainly has claimed the power to force people to buy various things.
Why you think it started with the ACA is beyond me.
I should have asked if you were in a state where the miltary.gov website is working properly. I took the Silver plan, cause I elected to not pay for the F-35 and am willing to pay the price if it is actually needed.
I know it is a risk, but what the hell it is a lot of money.
You were doing so well until you said this:
Congress most certainly has claimed the power to force people to buy various things. Why you think it started with the ACA is beyond me. (end quote)
If only we could have an honest discussion of PPACA instead of the constant fibbing, Congress has never claimed the power to regulate each person’s economic decisions and to be able to force a purchase until PPACA. All previous regulations were of ACTIONS (which were themselves commerce or which affected commerce) rather than THOUGHTS such as supposed economic decisions.
“Congress has never claimed the power to regulate each person’s economic decisions and to be able to force a purchase”
The IRS disagrees with you.
42 U.S.C. ch. 7 disagrees with you.
Pub.L. 89–97, 79 Stat. 286disagrees with you.
Pray tell -Where is either of those do you find a regulation of a person’s decisions, as opposed to actions?
SCOTUS held that SS was permissible as a tax on income. Your continued fibbing ought to be embarrassing.