Bold Promises, Promises

President Obama made a bold promise before, during, and after the passage of the Affordable Care Act that every American had the right to keep their existing health insurance. Period. Now, millions of Americans are getting the terrifying news that their insurance has been cancelled because of President Obama’s ACA regulation. The scope of damage is bigger than I realized:

Florida’s Blue Cross and Blue Shield, for instance, said about 300,000 members are affected while California’s Blue Shield and Oakland-based Kaiser Permanente will withdraw policies for a combined 280,000. Highmark Health Services of Pittsburgh said 40,000 customers will need to find new plans. CareFirst Blue Cross Blue Shield sent notices to more than 70,000 customers in MarylandWashington, D.C., and Virginia that their current plans don’t comply with the law.

As many as 80 percent of people who don’t have a company-hosted plan or insurance through the Medicare or Medicaid government programs may have to find new health coverage, said Robert Laszewski, an insurance-industry consultant in Arlington, Virginia. About 19 million people are included in this market.

Young professionals who were paying $250 a month will now have to buy a new plan costing $500 or more a month. And no, it is not always a better product, which is the fallback line of ACA defenders. Definition of irony: but for the Affordable Care Act, people could have kept their affordable care.

Here is the promise, which the Washington Post now gives 4 Pinocchios :

“That means that no matter how we reform health care, we will keep this promise to the American people: If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.”

– President Obama, speech to the American Medical Association, June 15, 2009 (as the health care law was being written.)

Three points, then some analysis:

1.  The insurance that millions of people are not allowed to keep is what they freely chose. They could have purchased the “superior” product, but their freedom to choose has been outlawed. Why?  (Subpoint: when pressed to provide an alternative to the ACA, the answer is simple. Free choice!)

2. It is a gross, false assertion that the cancelled plans will be replaced by superior ones. In fact, the core logic of the ACA is that the costs paid by middle class consumers will be increased dramatically so as to subsidize the poor, unhealthy, and elderly. Smokers pay less, nonsmokers pay more: that’s the engine of the ACA in a nutshell. This is a simple observation, not a moral judgement, but let’s not fall for the Jedi Mind Trick that the old care was “substandard.”

Analogy: imagine the government telling people what they shouldn’t prefer and thus will no longer be allowed to drive inexpensive, compact Hondas with 4-cylinder engines. Cadillac or nothing. Oh, and “nothing” will be punished with a 1% tax on your income. So, would you like to see the Cadillacs? Oh, and Cadillacs are actually not very reliable cars, but whatevs.

3. The bold promise was a false promise. The conceit of creators of Obamacare was that the sales pitch was, at worst, unclear. No, the reverse is more like it. Obama claimed that not one person would be forced to lose their insurance. Not one.

Let’s think about the kind of bold, absolute statements that we make and what they really mean.  Then let’s think about what the bold promise that Obama, in fact, could have honestly made.

  • Never leave a man behind.” Central to the creed of the U.S. military is this promise. The promise is not abandoned once a brother is killed. His (or her) corpse is not left to the enemy. The universality of the promise is its power. If this were the Obamacare promise, it would be “Well, what he meant is that the new way of fighting is going to make life better for MOST soldiers.” Not the same! Not a glitch in translation.
  • “The elimination of German, Japanese and Italian war power means the unconditional surrender of Germany, Italy and Japan.” – President Roosevelt, January 24, 1943.  FDR’s decision was controversial and many still question it, but the demand for surrender without conditions meant that peace was more than the absence of war and occupation. It meant totalitarianism ended, the Holocaust was exposed, colonies were freed (not all, but Korea, for certain), war criminals were shamed and killed. Plus, democracy was born/reborn in the occupied nations instead of bitterness and plans for revenge which would have followed a conditional peace treaty (see: Versailles). In short, there was no double-talk from FDR or Truman to modify the U.S. commitment when the going got tough.
  • “I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth.” – President John F. Kennedy, May 25, 1961. JFK didn’t promise to land a probe on the moon, or have a man orbit the moon.

What Obama could have boldly promised is this: “The ACA will help cover millions of uninsured people. It will create a minimum baseline for everyone with insurance so that high quality is mandatory, not optional.” We might quibble with that, but it would have been much more honest than the promise he gave.

Reform is hard, and reformers have learned that making changes to existing law will often create winners and losers. So the modern approach is to “grandfather” the potential losers. Think of it as the “everyone gets a trophy” approach to fiscal policy. So when we talk about converting military pensions away from the coercive 20-year cliffed lifetime defined benefit and towards a 401k-style plan, the discussion cannot even begin without a commitment to honor the existing veterans. That’s how it should be.

Obama made this kind of no-loser commitment, and it was insincere. It was a sales pitch, not a policy description. And it probably will hurt future reform efforts of all kinds, notably the military pension overhaul.  The administration’s own analysis after the law was passed and before it was implemented found that roughly half of policyholders would actually lose their coverage immediately. It’s rightfully a scandal. But it’s worse than that.

What happens to the millions of Americans who have lost their coverage? All will be inconvenienced, outraged, and scared. But what happens to the percentage of them that are financially unable to buy new coverage? Let’s say 10% of this cohort of middle class Americans decide to go without insurance, reluctantly, in 2014. Then what happens to the small percentage of these ACA-induced uninsured people – moms, sons, babies – that get really sick? Strokes, cancer, Lyme disease, accidents. The horror of the ACA is that some number of Americans are going to suffer, some die, without health care in 2014 because of the law that took away their insurance.

It is cold comfort that most Americans might get better care. Very cold comfort.

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