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Monday, March 22, 2010

Obamacare = SSI and Medicare? Not Quite.

Nancy Pelosi likened HCR to the passage of Social Security and Medicare. Some pundits suggest that repeal of this new entitlement is unlikely, also citing SSI and Medicare as examples of entitlement programs that became too popular to repeal. Here's why the comparison is not valid:

Social Security and Medicare instituted benefits that did not exist prior to implementation of the respective programs. There was no retirement program for the elderly and there was no medical program for the elderly. Where there was nothing before, these two programs created new entities that people could cling to.

Most people already have health insurance; Obamacare provides the vast majority of Americans with no substantial benefit. Repeal would simply return most Americans to a position with which they were mostly satisfied - private insurance provided through their employer.

Repeal of SSI and Medicare looks, to the elderly, like a frightening leap into the abyss - there is no credible alternative to SSI and Medicare, as they see it. Repeal of Obamacare simply takes us back to a flawed but basically satisfactory status quo ante.

Update: Here's post at The Corner that more or less echoes my thinking - in comparison to other statist experiments, Obamacare will be a downgrade for most Americans and very susceptible to repeal:

A View from Britain [Ramesh Ponnuru]

A British friend who has been following the health-care debate writes in:

In Britain the introduction of the NHS was passionately supported by both parties. Tory opposition to the legislation accepted the principle of medical care free at the point of consumption and concentrated instead on secondary questions. It could hardly have done otherwise since Churchill's wartime coalition government had developed its own plans for a single-payer system of universal health insurance--along with other statist social welfare measures.

At the time of its passage the cost-benefit structure of the new British system was radically opposite to that of Obamacare. Its benefits--mainly the extension of free medical care from the poor to the middle class--came at once; its costs were delayed for a decade and a half as almost all budgetary health allocations went to current spending and almost none to capital investment. Not until 1962 did a British government embark on a hospital building program; until then--and for many years afterwards--the national health service lived off the fixed capital invested by private Victorian philanthropy. (Even a few years ago you could tell this from the appearance of the buildings.) The advance of medical science today makes a repeat of this performance quite impossible. So the money to meet the increasing demand for medical services will have to come from somewhere other than the capital budget. Where?

Rationing is implicit in both Obamacare and the NHS. But the customers of both systems are very different. Most modern Americans get good health care. They have learned to expect it. They will complain if they don't get it. And they have their present care as a method of comparison to any new system. Brits in 1948 had just survived a terrible war. Rationing was part of their everyday lives. They were a deferential people to begin with in a much more hierarchical society. Brits of today would be much much harder to convince--if they had not got used to getting free but inadequate health care.

And the ratio of winners to losers in both cases is very different. As the previous paragraph suggests, there were no real losers in the Britain of 1948. Only a tiny handful of very rich people had any experience of great medical care--and they were rich enough to pay higher taxes AND private insurance premiums. Everyone else got roughly the same medical care; but now the middle class got it for nothing as most of the poor had done before. Nobody lost--not for another fifteen years when the quality of medical care began to decline noticeably. And by then they were hooked. By contrast almost every insured Ameerican is a potential loser under Obamacare. And some of those considered to be winners--i.e., the currently non-insured--will feel like losers if they are forced to insure and then remain inconveniently healthy.

So, for all sorts of reasons, opponents of this bill should not feel deterred from hope of repeal by the British experience. At the very least they have a window of opportunity to reverse the legislation of about eight to ten years. It's doable if you think it's doable--not if not.

Finally the wise words of . . . John Maynard Keynes: "The unexpected always happens; the inevitable never."


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