Tuesday, February 9, 2010

The Republican Ace in the Hole on Healthcare Reform

I think Yuval Levin characterizes the ideological landscape of healthcare reform pretty accurately. We’ve reached an ideological stalemate because, while liberals and conservatives both reject the status quo, they want to change it by moving “in roughly opposite directions. And they each tend to think that moving in the other’s direction would be worse than just keeping what we have for now.” Here’s how Levin fleshes his view out:

“Liberals argue that we should move in the direction of socializing insurance coverage: that the efficiency we lack would be produced by putting as much as possible of the health-care sector into one big “system,” in which the various inefficiencies could be evened and managed out of existence by the rational arrangement of rules and incentives. . . . . Conservatives argue that we should move toward a genuine individual market in insurance coverage: that the efficiency we lack would be produced by allowing for price signals to shape the behavior of both providers and consumers, creating more efficiencies than we could hope to produce on purpose, and allowing competition and informed consumer choices to exercise a downward pressure on prices.”
There may be policy alternatives that effect a genuine compromise between liberal social insurance principles and market-based cost controls (see Megan McArdle’s post), but currently there’s no political constituency behind them.

That makes for a politically crucial asymmetry between the prevailing liberal and conservative approaches. You can move in the conservative direction in measured steps (e.g., a little tort reform, gradually mitigating the tax preference for employer-provided health insurance while cushioning the impact with escalating deductions or tax credits, permitting the purchase of health insurance across state lines). But, so long as covering the uninsured is your first priority, you can’t move in a liberal direction without taking a giant leap at the outset (e.g., an insurance mandate and eliminating private insurance underwriting).

Leave the relative merits of the liberal and conservative approaches aside. All other things being equal, which system is going to be easier to sell to a voting public that contains a lot of risk-averse people who aren’t strongly dissatisfied with their current health care situation? The question answers itself. Here, again, is Levin:

“The larger public, I think, is not so tied to either direction, but is opposed to doing anything huge. That’s a big part of what the Democrats have done wrong this year: They have proposed too much. Whichever side is smart enough to propose some modest and sensible incremental steps in its preferred direction will have far better luck with the public.”
But what if any step in a recognizably liberal direction is already too big a political leap? That leaves liberals with the option of surrendering abjectly or “passing-the-damn-bill” on the theory that they may as well walk off a political cliff with their eyes open since they’ll stumble off it anyway. Who ever said politics is fair?

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