Reforming the Health-Care Reform

For all the weeping and crying and gnashing of teeth among conservatives, it’s important to recognize the positive opportunity in Obamacare. The expanded federal financing will almost certainly end up paying for abortions, an outcome that will require new battles on behalf of the sanctity of life. That’s bad. But what about the rest of the bill? The Democrats did not so much change the American health-care system as pump up everything in an attempt to realize the imperative of universal access. Some Christians, including politically conservative Christians, warmly welcome this.

The U.S. Conference of Catholic Bishops laid out, in 1993, principles for reforming the health-care system, the most salient of which are respect for life, an appropriate balance of public and private sectors, realistic and sustainable strategies for financing care—and universal access. Officially named the Patient Protection and Affordability Act, the bill lays out two basic trajectories toward universal access, one of which will very likely come to predominate. The first, the private future, involves increasing the number of people with insurance. Today, about 65 percent of the nonelderly have private insurance, down from nearly 80 percent in 1970. This trend needs to be reversed, so that more of the insurance payments made by healthy people will go to meet more of the costs of sick people.

The second, the public future, views the taxing power of government as the most reliable and equitable method for financing health care. Some advocates also imagine that the command-and-control mechanisms of bureaucracy will ensure good care and control costs. In a largely public future, something like our current systems of Medicare and Medicaid will expand to encompass most citizens.

Obamacare increases funding for the public side of our current system, and conservatives worry that the federal government eventually will absorb the entire American health-care system. Catholics of all sorts recognize that a largely public future will, in all likelihood, lead to uniform policies that force Catholic doctors and hospitals to violate their moral principles. And most people anticipate that direct government control will create a giant new bureaucracy, bloating the public payroll and leading our already flawed, complicated, and frustrating health-care system down the path toward Kafkaesque darkness. Not good.

But that’s not inevitable. The legislation could achieve something much better: the eventual success of the private approach to universal access.

The details are complex, but the outline is clear. New standards for insurance companies prevent them from denying coverage. This, along with subsidies for those on the margins, makes private insurance more accessible. At the same time, as the door is opened more widely, a requirement to buy insurance (the individual mandate) pushes new customers through. The desired outcome: more people paying premiums, creating a larger pool of insurance funds to pay for expanded (and we hope more rationally allocated) care.

Whether or not Obamacare is well enough designed to achieve this goal is an open question. (I have my doubts. The insurance-policy requirements are too inflexible, and the penalties for nonparticipation are probably set too low.) Nonetheless, the logic is sound. Private insurance will be the dominant form of universal coverage only insofar as people are kept out of the public, government-funded system.

Indeed, if politicians are addicted to government spending, the private approach must be made as strong as possible by filling it with as many voters as possible. The individual mandate is the stick that forces the greatest possible number of premium-paying Americans into private insurance—including the young and healthy who have no incentive to pay premiums, the improvident who are disinclined, and those on the margins who need subsidies to afford private insurance.

The success of the private approach matters a great deal because it allows us to preserve our current for-profit system for health-care financing and delivery. It will be heavily regulated, perhaps evolving into something like our current system of gas and electric companies that also benefit from the fact that the government forces consumers in their direction in exchange for providing universal service, or perhaps into something like corporations that have quasi-utility status, ranging from cable-television companies to defense contractors. These and other sorts of enterprises function within government—created and—controlled markets while remaining attentive to customers and responsive to shareholders.

Thus, with the private option in view, one need not be a leftist ideologue to be relatively optimistic about the future of the medical-industrial complex in America. Unfortunately, rhetorical overreach and ideological blindness among conservatives may end up impeding the success of the private option and helping ensure the success of the public option by default. Many reject the individual mandate, calling it tyranny, insisting that the government should butt out of the entire question of our relation to health insurance and health care.

This libertarian sentiment ignores the political realities created by our moral sentiments—political realities evident in the actual shape and practice of the health-care system we’ve had for a long time. To a very large degree, we’ve been functioning for decades with an ersatz version of universal care, one financed by a covert, nonvoluntary strategy of socializing costs as widely as possible.

Here’s how it’s been working. We muddle along with privately insured and tax-subsidized patients paying rates high enough to cover the costs of uninsured patients and compensate doctors and hospitals for unsustainably low government-paid reimbursements. End result: an ad hoc mechanism for extracting payments from the insured to finance a haphazard effort to provide at least emergency and critical care for the uninsured as well as decent care for the underinsured. In short, we’ve been socializing health care for a long time.

This socializing trend in medicine isn’t surprising. The costs of providing a standing army, a judicial system, and an array of regulatory agencies are all socialized. In other words, we already have government-run, taxpayer-financed schemes to insure us all against some of the most primitive risks of being human: the evil, violent tendencies of others that lead them to kill, cheat, exploit, and lie.

Think about getting hepatitis or breast cancer. The risk of suffering from these misfortunes is similar to the risk of being mugged or shot. It’s a life-and-death matter, and if human government has any justification for its power over citizens, then surely it rests in its unique capacity to pool resources to protect life. As Albert Camus recognized, one moral source for solidarity can be found in our common struggle against the dehumanizing power of suffering and untimely death.

To be sure, liberalism threatens to turn a proper, urgent, and basic concern for human solidarity into an all-encompassing, infantilizing nanny state. But let us not make the opposite error, supposing that health care is just another dimension of economic life—just another set of goods and services best left to the choices and resources of the individual. Health care differs from education or housing or providing for retirement. That’s why one can easily find learned articles discussing the dehumanizing effects of welfare dependency or the disincentives created by various social policies, but nobody writes articles to show how our capacities for personal initiative or sense of independence are diminished by “health-care dependency.”

Thus, however the legislative future unfolds, the fundamental question cannot be repealed: How are we going to continue to socialize the costs of health care in order to continue our long-standing, already socialized impulse toward universal access? The private approach seems the obvious way forward.

To be sure, it requires us to use government power to compel participation, and, in that sense of course, it’s not private. But that is to be expected. As we discovered many decades ago when building electrical grids and telephone systems—or, for that matter, when getting people to buy automobile insurance—a society often cannot achieve a universal goal without using the power of government to coerce participation, either by monopoly charters or individual mandates.

The key point is that these solutions to public problems make good use of private enterprise. In health care, the private approach backed up by an individual mandate will strengthen the market-oriented dimensions of our current system. The individual mandate links premium-paying individuals more closely to the real cost of health care than does our current, hidden, cost-shifting system, which survives on payments from the insured to cover the uninsured and subsidize the underinsured. For precisely this reason, a heath-care industry dominated by the private option will be more amenable than our old system to the many adjustments of incentives and tailored changes in benefits that we’ll need to make to control costs—and obviously far, far more amenable to them than the public approach.

The big, baggy, health-care bill signed in March was not a game changer. For the most part, it simply created a situation in which the explosive question of how to pay for universal access is more visible and less avoidable. Now we’re about to play the second half of the game. The Catholic bishops offer commonsense advice for developing a game plan. Their principle of properly balancing public and private argues for strengthening the private approach laid out in Obamacare. It’s a path toward universal access that prevents a public takeover of health care.

This will require reforming the reform. The regulations for private insurance must be redesigned to maximize cost-saving incentives, among many other fixes necessary to control runaway spending. But the more immediate political task for Christians is to overcome an impulse toward a spurious libertarianism, so that we can perfect the requirements and strengthen the mandates necessary for the private option to flourish. 

R.R. Reno is senior editor at large of First Things.