Conor Friedersdorf dreams of simplicity by mattsteinglass
August 13, 2009, 1:42 pm
Filed under: Health, Politics

Why Obamacare Scares America – Page 1 – The Daily Beast .

As best I can understand it, Conor Friedersdorf supports all the main points of the House health insurance reform bill. He’s in favor of universal community rating (everybody pays the same regardless of pre-existing conditions), ending rescission, health-care exchanges, and increased subsidies to enable those who can’t afford health insurance to get it. So why doesn’t he just say that? Instead he says Democrats have made a mistake by trying to pass this all at once. Less on the gamesmanship, please, more on the substance.

Substantively: the reason one often can’t pass individual planks of the reform in isolation is that taken individually, each plank generates perverse consequences that will lead to strong opposition from a particular constituency. Universal community rating, for instance, will make health insurance for the young and healthy more expensive. That creates adverse selection, as the young and healthy will drop out. And adverse selection threatens private insurers’ revenues: they lose their best customers. So to kill such a bill, private insurers will trade on young people’s fear that they’ll lose their health insurance. And they’ll be correct!

To pass universal community rating, you also have to have subsidies to keep low-income healthy people in the system, and you probably ultimately need a mandate that everyone has to buy insurance. That’s a deal that satisfies the insurance companies. But a deal like that also includes a couple of things that can be used to scare people: government subsidies, out of my taxes? A mandate that I have to buy insurance? And so your bill gets more complicated and easier for the political opposition to demagogue. And that’s how we wind up where we are.

Lay the blame where the blame belongs. It’s true, as Friedersdorf says, that lying demagogues will always be with us. And it’s also true that our mission in life will always be to denounce them as scum, and try to tell the truth. It’s a fallen world, baby, and the tzaddik’s task is to gather up the sparks of light.


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[…] is that moderate conservatives like Conor who actually don’t demonize the opposition (or have any real objections about some of the reforms being proposed) have no real way to influence the debate over this […]

Pingback by Michael Preston - Deep Background – It’s Too Late for Incremental Health Care Refrom - True/Slant

Hi, Matt. Glad I found your blog, a link from Andrew.

You make way to much sense to compete with the ideologues that compose most of the comment-space of Megan’s blog (which I read all the time and rather like, though I seldom tend to agree). Like many of Megan’s opinions, theirs seem to derive from the same religious inclinations to start with a desired conclusion and work backwards (note the high percentage of global warming deniers among the commenters, for example).

Regarding the whole pharmaceutical back-and-forth: The central claims on Megan’s part seem to be that a) pharmaceutical companies innovate because they can afford to do so, and b) also innovate to stay a step ahead of patent expiration, and c) also innovate because only free-market enterprises tend to do so, and d) won’t innovate if they lose the lucrative US market, and e) we will be the poorer for it.

That’s a pretty long string of cause and consequence, and point (d) has been challenged by a number of commenters with still no data in sight (you’d think that at least Nate would step up to the plate).

With regard to point (c), it seems problematic to me. Innovation, both basic and applied, has occured for decades in the military-industrial complex. In fact, so much research is funded by the government (from Universities to start-ups to aerospace firms), it begins to look like just the public option model that the right finds so abhorrent. I’ve been a professor and subsequently an executive and entrepreneur in computer biz for a long time, and can tell you from experience that much of the innovation that we popularly think arose at, say, Apple or Microsoft, was invented at PARC or DARPA.

In any event, it’s not clear that drug price controls are a foredrawn conclusion in our long slide to socialist totalitarianism (though, I admit to being piqued at paying $18 a tab for Viagra). I don’t know what changes to patent law or anti-trust enforcement (or efforts to break up the cosy relationship between physicians, drug companies and health insurers) are necessary to get more competitive drug pricing. I do know that decent amounts of competion (such as that which IBM faces, for example, a company with thousands of patents) doesn’t necessary spell doom for a large company.

Keep up the good work.

Comment by jbahr

[…] have put together are too big, and whether smaller incremental changes would be a better way to go. Matthew Steinglass had an excellent post in the opposite vein a while back regarding health care, where he noted that each […]

Pingback by An Argument for Exchanges and Swap Execution Facilities « Rortybomb

[…] have put together are too big, and whether smaller incremental changes would be a better way to go. Matthew Steinglass had an excellent post in the opposite vein a while back regarding health care, where he noted that each […]

Pingback by An Argument for Exchanges and Swap Execution Facilities » New Deal 2.0

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