Friday, April 30, 2010

Obama's deal?

I've been meaning to make a plug for this for a week now, but if you haven't seen it, it's worth watching the Frontline documentary about the healthcare legislation.

It's only an hour long, and people like myself who have been following healthcare closely will find much that is missing, however, as an overview (and with a few big caveats) it's mostly excellent.

There was only one big quibble that I feel is worth mentioning: The discussion about individual mandates.

Howard Dean (and others) get away with calling the legislation a big giveaway to the insurance industry (and I think Dean says that the entire 2,000-plus page bill changes very little -- a claim Dean knows is simply not true). And there's an implication that there was some shady, backroom deal for these mandates.

This is unfair.

Yes, insurance companies stand to make a substantial profit from the new legislation. And maybe the administration should have held out for a better deal. But I really don't think there is any practical way to institute healthcare reform without an individual mandate. But, for the moment, let's think about the alternatives:

1) Let's say the administration decided to go to all out war with the health insurance industry.

The industry kept most of their powder dry until the end of the debate (when the administration did, in fact, pull a bait and switch and start attacking them), but the last time health insurance was being debated the industry saturated the market with misinformation and commercials like "Harry and Louise" which helped kill reform. What would have happened if they had been an enemy from the start?

Considering how fraught the debate was from the beginning, I think it's possible they could have sunk the thing. Putting them on Obama's side seems to me like the only way to get a deal through.

2) The insurance industry (in this case) is right.

I'm not one to carry water for an industry that I believe abuses its power unforgivably, but let's face it: Without an individual mandate, they'd go broke.

You can't stop insurance discrimination and not have a mandate. It just doesn't make economic sense. The whole concept of the insurance business is spreading out risk: You buy insurance hoping to never need it. The money that I give to insurance companies goes to pay for the care of some poor guy who comes down with cancer.

But for the moment let's say there's no discrimination against preexisting conditions... Well, what possible incentive would anyone have to buy insurance then? You can just wait until you have cancer and then buy insurance. Insurance companies would only be covering sick people and they'd go out of business.

This is an important argument. I wish it was in the documentary. But otherwise, take a look. (And if you'd like a little bit more of a substantive/wonky debate on the healthcare legislation, check out the New Republic's invaluable Jonathan Cohn versus the Atlantic's Megan McCardle on bloggingheads.)