Prognostications


The Senate Health Care Bill passed the House today in a 219-212 vote, with the reconciliation “sidecar”. Progressives and other leftist-liberals are obviously very excited, and billing this as a “historic moment”. I don’t share their enthusiasm for the act…but I’m ultimately ambivalent. As has been said before, by leftists and pragmatic right-wingers both; this just augments the status quo in ways that seem more egalitarian to supporters. Here is a short list of my own prognostications, given a 10 year time-frame, about the impacts of the bill (hold all other variables, such as the passing of further bills, constant).

  1. Real spending on health care in the US will continue to increase as a percentage of GDP. The last 10-year average in price inflation was 3.66%. Going forward, growth will be higher — venturing a guess, over 4.5-5% average per annum. In other words, no real savings. I would be willing to bet on that.
  2. Health care “exchanges” will turn out to be a poorly-executed in practice. The rules will be dominated by large players, and will be a new avenue for political rent-seeking. They will also not offer a popular alternative to the tried-and-true employer-based health benefits, even with the (unfortunately small) excise tax.
  3. The “mandate” will sustain Constitutional challenges. All states that have passed a ban on insurance mandates will be left hanging dry. I would be willing to bet on this, as well.
  4. The ban on discriminating against pre-existing conditions will prove to place much more pressure on insurance premiums than can be contained by a larger risk pool associated with the “mandate”, which is too small. However, since there will be a large amount of political pressure on “exchanges” to not allow price increases, this will result (overall) in poorer service from individual insurance providers. I would bet on this, but it’s kind of a hazy subject — I would rather bet on things that have clear-cut win/loss conditions.
  5. Within ten years, there will be passed a strong public option…which will be a precursor to national single-payer insurance.
  6. Comparative effectiveness research will prove to be a false promise (from a cost-benefit standpoint), and this will end in a major fight (making this previous fight look like a walk in the park with a slight breeze) over the actuarial rules that govern Medicare reimbursements. I’d be willing to bet on this.
  7. There will be less “uninsured” people as a percentage of the total population in 2020. I’d be willing to bet on this…but you’d probably be a sucker to take it.
  8. Health Savings Accounts will become a short lived side-note from a seemingly distant past. Not willing to bet on this, yet…because I’ve just read heresay.

The bill is a victory for the Progressive movement, so congratulations are in order. Way to stick to your guns, and offer a (mostly) principled defense of your viewpoint. Nitpicking a little, I’m going to say that you mistake the bill’s intent for the ultimate result, and I’m much more pessimistic.

Also, I’m very disappointed to have only had Republicans on my side anywhere that counts. Republicans should be absolutely ashamed of themselves. They offered literally zero principled defense, drew up no coherent alternative (besides the Ryan Plan, which was quickly backed away from), and resorted to tactics ranging from exaggeration to outright lies to attempt to defeat the bill. Obviously that has worked in politics, and can probably continue to work — but why didn’t you seize the “ostensibly historical” moment to shift the tide toward you being on the cusp of change? Do you really like the status quo that much?

To those who claim this is the “death-knell for capitalism”, I would direct you to this article. And for those of you who want to know where I (still) stand, read this article.

— — — —

P.S. It is likely that none of those bets can stand. As Paul Krugman even states, this bill will need to be “fixed” almost as soon as it is signed. One other side-bet…every single “fix” will simply cement the direction we are headed in. At no point will any “fixes” reverse the direction toward more market-based principles.

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