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GOP's anti-Obamacare strategies set to backfire

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By Matt Miller
Thursday, October 21, 2010

If you want a glimpse of the confused shoutfest that will consume politics after Republicans win big on Nov. 2, look no further than the drive to have President Obama's health-reform law declared unconstitutional, which got a boost this week when a Virginia judge said he'd render a verdict this year. Coming atop a Florida judge's decision to let a constitutional challenge move forward there as well, the news had conservatives cheering. What the right fails to grasp is that "success" in court will undermine the private-sector health care Republicans cherish.

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The main thrust of the anti-Obamacare lawsuits is the argument that the program's mandate for individuals to buy health insurance is unconstitutional. The right conjures images of jack-booted federal thugs forcing helpless citizens to buy coverage they don't want. Why, if Uncle Sam has this power, mused Judge Henry E. Hudson in Richmond's district court, the feds might soon be forcing people to buy cars, join gyms or even eat asparagus. "It's boundless," he said in the hearing.

But that's not the case at all. The reason the law mandates that individuals buy health insurance is because Obama wants to reach near-universal health coverage via a private insurance system. The law bars insurers from denying coverage based on preexisting medical conditions -- a reform that Republicans, along with Democrats, say is essential. It's why Republicans who pledge to repeal Obamacare on the stump vow in the next breath to reenact this core provision.

But here's the rub: You can't force health plans to offer coverage to everyone, regardless of medical condition, if you don't make sure everyone is in the insurance pool. Without such a mandate, people have an incentive to wait until they get sick to buy coverage. Insurance can't work that way. The result is a classic insurance "death spiral" in which, on average, sicker people are in the pool, which makes premiums rise, which in turn forces healthier people out of coverage they can't afford, which then leaves the pool filled with even sicker people on average, which sends premiums higher again, and so on. This is why states that have forced insurers to accept all comers without also having a coverage mandate (such as New York and New Jersey) have seen rates soar and coverage shrink -- hardly what officials intended. This is Health Insurance 101. (The other piece is that you need subsidies for low-income folks if you're going to have the mandate, which is why Obamacare is expensive.)

Republicans used to understand these economics perfectly. That's why Bob Dole, Howard Baker, John Chaffee and Mitt Romney (among others) have all supported individual mandates. Are all these Republicans constitutional rogues? No one disputes that the federal government has the power to stop insurers from denying coverage based on preexisting conditions. Under the Constitution, the feds thus have the corresponding power to enact reasonable measures to assure that this reform actually works. For seven decades the Supreme Court's reading of the commerce clause has made this permissible. If you haven't made constitutional peace with the New Deal, that's a different matter, but for almost every legal scholar, this question is settled.

The irony is that conservatives, either from confusion, or for the sheer fun of taking a political bite out of Democrats, are fighting the one measure that's essential if private insurance is to retain its central role in American health care.

You can critique Obamacare, as I have, for not having done enough about costs. Or for adding much of its new coverage through the second-class Medicaid program. Or for not making universal catastrophic and preventive care the more cost-effective starter version of universal coverage in this country. But having said that, it's still the most important social legislation in decades -- a law that should be mended, not ended. Over time, the insurance exchanges it establishes represent our best hope to finally get past the relic of employer-based health care, a goal John McCain rightly championed (though without proper protections for poorer, sicker Americans) in his 2008 campaign.

So, conservatives, be careful what you wish for. By fighting the mandate needed to make private insurance solutions work, and doing nothing to ease the health cost burden on everyday Americans, you'll hasten the day when the public throws up its hands and says, "Just give us single-payer and price controls." Don't think the anti-government wave this fall won't reverse itself on health care if the most private sector-oriented health care system on earth keeps delivering the world's costliest, most inefficient care.


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