The “health care betrayal” and Waxman-Markey

by on January 22, 2010 at 7:48 am in Law, Political Science | Permalink

If there's one lesson from the health care debacle, it is that Waxman-Markey was and is a dead end.  Many of us objected to the bill on the grounds that it supports a lot of phony offsets for twenty years, imposes lots of costs and regulation in the meantime, and then never really does much to help climate change, given the difficulties of political precommitment.  I believe that people with these objections, such as myself, were viewed as "obstructionists" by many or as people who were simply looking for an excuse not to support the bill.  But the idea that Congress was just playing around, and had no real will to address the problem, should now be much, much more credible.  For all the talk about Waxman-Markey as a "framework," I see plenty of reasons — all the more now — to think Congress never meant to follow through.

The advantage of a carbon tax is that it forces Congress (and others) to demonstrate a certain amount of seriousness up front.  A good rule of thumb for a climate change bill is whether a representative voting for it can and will say: "This will raise the price of gasoline in the next six months and that's the whole point."

Megan McArdle predicted all along, even after Ben Nelson folded, that the health care bill will fail because Congress isn't very interested in enacting unpopular policies.  That's very good prophecy.  It's no accident that she also is skeptical of Waxman-Markey, for reasons related to those expressed above.

I believe the health care debacle should cause all of us to rethink our positions on preferred paths, sequences, and strategies.  No matter what your opinion of the health care bill, it's not a pretty picture.

Bill January 22, 2010 at 8:10 am

Politics is the game of exchange.

When someone makes the tactical decision not to exchange, and cause its members to bear punishment if they defect, there can be no exchange across groups.

If you believe that government should be some big isometric exercise–that we have a political body with two arms, pushing hard on each hand so that nothing moves–well, I can assure you the muscles of the isometrician get bigger, fed by campaign contributions, and I can assure you nothing happens.

Its a matter of tastes and preferences. Everyone will face a pre-existing condition in their life; everyone will want to move or retire but will be unable to do so without facing an insurance risk; everyone will pay more taxes to fund avoidable indigent care; everyone will pay higher insurance premiums because they pay for uncompensated care…but it is their choice.

So be it.

Curmudgeon January 22, 2010 at 8:42 am

If there’s one lesson from the health care debacle, it’s that America is effectively ungovernable and that no crisis, no matter how severe, can be addressed through congress. Congress has no interest to address issues of public welfare as its members have no need to respond to public suffering or public opinion and will suffer no personal consequences for getting things wrong.

It’s not clear whether the federal legislative process can be revived but it would probably require a miracle.

capitalistimperialistpig January 22, 2010 at 8:48 am

Damn. Two highly intelligent posts (on economics!) in a row. I’m amazed.

Jim January 22, 2010 at 9:08 am

“a lot of phony offsets for twenty years, imposes lots of costs and regulation in the meantime, and then never really does much to help climate change”

This is the standard MO of the Federal Government, so I am surprised at your surprise. How about airline safety? A lot of phony screenings and shoe removal, lots of costs and regulation, none of which does much to help stop terrorists.

Even if you still believe in Global Warming, it should be clear that the US Government has no interest in “fighting it.” They make far too much money off of consumption, and the expansion of the economy. Hyping the hoax, and responding by imposing a lot of costs and government regulation? Well, now you’re talking!

E. Barandiaran January 22, 2010 at 9:30 am

Tyler, I disagree with your conclusion. WHAT A PRETTY PICTURE. I hope people everywhere in the world learn from what has has happened to your GREAT LEADER and his mafiosos: politicians’ hubris should not be tolerated, politicians should always be held accountable, rules and taxes are for everyone not just little people. What a wonderful week!!

floccina January 22, 2010 at 9:43 am

@Bill if most people need it at some point in their lives then they might as well pay for it themselves. You cannot subsidize the median person. The whole benefit of pubilc provided healthcare would be to move some of the expense from those with big life time health bills to those with low lifetime bills. IMO The problem with the democrats who push for such things as Universal Healthcare is that they act as if fluent people are evil but poor people and healthcare providers are good. It is also evil to slack at work on a gov job. It is also evil to go to the emergency room because it is free when you do not need to but people do that. It is evil overconsume healthcare if it is free and abuse the system and yet those salt of the earth poor people will do that given a chance.

It was a sign of evil that when my wife had a condition and I told my doctor that I had a $10k deductible and he said then you do not need this and that and there is a generic for that but as long as he thought the insurance company was paying he prescribed a very different course.

Then
BTW I use the word evil in the biblical sense, meaning flawed which is much softer than common use.

DBX January 22, 2010 at 10:23 am

The supreme court just made fixing the federal system a lot more difficult. You have to take the money out of politics, as monied special interests like the insurance industry have made health reform so very difficult. And you have to remove the supermajority requirements such as the filibuster which are quite simply antidemocratic.

The federal system is close to breaking point and those who profess patriotism but obstruct policy had better realize that you can’t have a viable nation without a viable national government. Republican obstructionists are, slowly but surely, pushing the USA towards a breakup like the former Soviet Union. Is that what they really want?

Mercer January 22, 2010 at 10:47 am

Obama tried to do two things: Expand coverage which is popular. Control costs which is unpopular. He would have been more successful if he had followed Bush’s example and expanded coverage without bothering to try to pay for it.

I think the lesson will be that be any attempt to try to reduce Medicare cost growth has little support in congress or with most voters.

Laserlight January 22, 2010 at 11:09 am

DBX said: “The federal system is close to breaking point and those who profess patriotism but obstruct policy [...]”

Remember that “dissent is the highest form of patriotism.”

jothi85 January 22, 2010 at 12:01 pm

Response to Posted by: Bill at Jan 22, 2010 11:26:02 AM

You are on target. what you have left out ( and shiller does not try to attempt to address )is the following.

1: “the compelled membership” is inimical to our system… and, left to their own devices, people’s penchant for gambling is one of the bigger factors why lot of them will not buy the lifetime contract.
2: once, having written the contract, the insurer is going to try to convince the insureds to restrict their activities…. like giving discount for not skiing etc. ( generally a win-win financially. a big loss for the variety of human activities…. generally leading to a joyless life ). And these discounts will keep sprouting more and more heads and, the “compelled membership” will not work in the long run

anon January 22, 2010 at 1:10 pm

If there were no filibuster rule how would that prediction look?

That allows many Dems to hide behind the filibuster. So, not much different.

anon January 22, 2010 at 1:28 pm

Ultimately it comes down to whether or not people who have, are willing to aid the have nots.

Uh huh. That’s all it comes down to. Damn people who have. We should line em up and shoot em. THAT will solve EVERYTHING.

The Puritans and scolds have really come out of the woodwork.

Bill January 22, 2010 at 1:34 pm

@Cliff, I am sorry if I did not make myself clear or was inartful in expressing this. I did say that, starting out, there would be a redistributive effect…but, once the system continues, there is none. I am using the example of “at birth” to simplify the economics; no one is going to pay for an upfront contract; it’s pay as you go. And, you are correct, that the risk is that the insurance company will renege on the contract. But, as a policyholder, you will keep a close eye on their governance, and have every incentive to appoint an agent to do so (such as an insurance commissioner). As to lifestyle, you know, with healthcare, if you get sick or disabled, you feel it–it’s not like “Gee, I’m going to go out and get real sick or disabled so I can have someone poke me with needles and do surgery and all that other neat stuff so they can get the insurance money.” Recreational drugs may be another matter.

As to compelled membership, that doesn’t bother me: it is a cost benefit assessment. As someone said, if left to devices, people gamble and would opt out. It’s not that I oppose their choice, I just don’t want to pay for it, and I don’t think we are going to not let people into hospitals and die on the doorstep. So, compell them or require that they buy insurance outside of the system. I’m not paying for free riders.

ChristineWithRegence January 22, 2010 at 3:15 pm

This fun video makes you wonder why our health care system is set up the way it is:
http://www.whatstherealcost.org/45secondstoshare

RJ January 22, 2010 at 6:05 pm

The health bill is a monstrosity of over 2000 pages, ripe with payoffs to entities that have curried or demanded a favor.

That alone should earn a NO vote from any sentient being.

If not submitting to such disasters makes a country ungovernable, I’m proud to be in an ungovernable nation.

RJ January 22, 2010 at 6:15 pm

“Most people do not know what is in the current bill, they just listen to their favorite radio host.”

How can that be, when all the deliberations are broadcast on C-SPAN?

Oh, wait. Never mind.

Cliff January 22, 2010 at 7:36 pm

Mulp,

You are an idiot. If you really believe that insurance companies giving lifetime health insurance policies before birth would give everyone the same price, you are a complete fool. If you are arguing that lifestyle is not the dominant factor in health outcomes, you obviously are unfamiliar with the literature and have absolutely no basis for that belief. Heart disease, diabetes, cancer are all heavily influenced by diet.

If you believe lifestyle is the ONLY factor in health outcomes, you again are a fool. If you believe lifestyle is not AT ALL predictable before birth, you are similarly a fool. Lifestyle is the dominant, but far from the only, factor in lifetime health care outcomes/costs. Clearly genes and income are also factors, at least at the margins. And yes, lifestyle can be predicted to some extent, not necessarily with precision, from actuarial information such as ethnicity/culture, parents’ wealth/education/income, etc.

Reality is not optional!

d4winds January 23, 2010 at 6:16 am

The Republican party in the Senate now fully controls the legislative process. We all await with bated breath their budgetary and other proposals. Discussions of any other legislative proposals are truly pointless.

Wanderer January 23, 2010 at 4:42 pm

“Everything just changed!
CALIFORNIA IS TRYING TO GET SINGLE-PAYER….
It is also going to drive a wedge between the teapartiers and the corporate moderates in the Republican Party.”
Sorry, ‘fraid not.
California is BANKRUPT, dysfunctional, losing population and businesses by the hour, dropping tax revenues and rising unemployment by the calendar quarter. How can you imagine that they will pay for this?
This is a Utopian delusion on the part of some state legislator. Ahhnold the Governator even vetoed similar proposals earlier … twice. Just as America cannot afford Obamacare, California cannot afford this.
Until you start with the common-sense stuff: insurance pools across state lines, tort reform, and pre-existing condition coverage, not much CAN change. We cannot continue along the path previously trod, but we cannot jump off the cliff (single-payer) either.
To reach a “much better world” , make incremental changes (ONE proposal at a time; wait six months and see what works / what doesn’t). TWO THOUSAND PAGES of changes will make it impossible to measure progress, let alone see which parts led to progress – and which ones led backwards. And while we’re at it, let’s get SOLVENT right now, so we can afford to make these changes. Regrettably, I’m not certain how solvency can be achieved – but I’m pretty sure it doesn’t involve another couple of trillion dollars in spending that taxes can’t support.

Str8er February 25, 2011 at 11:30 am

Health care systems are faulty.I was amazed when I saw my dental insurance because this insurance is one of those which actually helps you when you need.

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