By James Kwak
I should leave the country more often: I go away and suddenly we have (near-)universal health care coverage! (Well, we’ll have to wait a few years for all of the health care reform provisions to kick in, but you know what I mean.) Not only that, but Ezra Klein reminds me that we even got rid of the pointless subsidy to the banking industry in the student loan program (where the government guaranteed the loans but let private lenders earn profits making the loans, even though the guarantee obviated the need for underwriting).
So what happens now? Nate Silver points out that passing health care reform has helped the Democrats, though not as much as I would have expected. I’m no expert on electoral politics and public opinion, so my guesses are just that — guesses. Anyway, I think that just as many people see politics as a type of sport, many people like winners; winning on health care would be good for Obama and the Democrats just as losing on it would be bad, regardless of their actual position on the issue. According to Silver, this is a little bit true. Still, I think it could become more true by November (relative to the unknowable counterfactual where health care reform failed), because it largely takes away one major potential criticism of the Democrats: they couldn’t get anything done. In Colombia, where I was, they were calling it the largest domestic program of any kind since Medicare, over forty years ago.
In the longer term, will this turn out to be as popular as Medicare? I doubt it, because the reform was so modest in many respects. (Klein has written many times about how this is not only a centrist bill, in many ways it’s actually conservative — reliance on market mechanisms, no public option, etc. Here’s his latest version.) I worry that, in the transition period, health care costs will continue to grow faster than inflation, companies will cut back on their plans, and people will blame the loss of their coverage on “Obamacare”; when people have their claims denied by their existing insurance plans, they’ll blame it on “Obamacare”; and, in general, the debate over the past year has so poisoned public attitudes that about 40 percent of Americans will assume that anything bad that happens to them (like getting sick in the first place) must be Obama’s fault. I also worry that, even as the bill “bends the curve” on long-term costs, people will see the fact that costs continue to rise faster than inflation as proof that the reform didn’t work — just like some people point to 10% unemployment as “proof” that the stimulus didn’t work.
But I think that near-universal coverage, and a ban on medical underwriting, are un-repealable enough that they will make it through the transition period until we reach the point where Americans assume that they can get decent health insurance at a price that, if not reasonable by international standards, is not completely unaffordable. And that would be a huge step forward.