Ph.D. Octopus

Politics, media, music, capitalism, scholarship, and ephemera since 2010

How economists messed up the health care bill

with 5 comments

The problem with Obama’s health plan, as usual, is economists. Or I should say, as Tony Judt might, economism– the tendency to see all issues through the lens of economic thought. “Wonks” like Ezra Klein see the various CBO scores and say “the public option in the House’s bill would have made very little difference either to people or to costs.” Why get so riled up about it?

The problem is that Obama’s health care plan which lacks a Public Option, may make economic sense, but politically and, if I may say it, morally it is a disaster (especially when combined with the individual mandate, which forces all Americans to buy insurance from private companies.) It may well be that the individual mandate is necessary to prevent an insurance death spiral- but that intellectual fact cannot make the feeling in your gut any better. Essentially what Obama is saying is: we need to bribe the insurance companies. See they’re terribly greedy and inhumane, and would love to raise rates and throw you off their rolls when you got sick. So because of their greed and inhumanity, we’re going to… force you to buy their product. That way they’ll be nice enough not to raise rates exorbitantly if we ban discrimination of consumers.

The whole mess is all the more poignant because insurance is, by its nature, a social thing. The logic of insurance has always been that the young and healthy will pay now for the medical expenses of the old and sick, under the promise that they too will one day need those benefits. This is why the young and healthy have to be forced to buy insurance, since the old and sick can’t pay for themselves. Its actually all a quite nice idea, institutionalizing norms of cooperation and solidarity.

But if the whole logic of health insurance is one of social solidarity- where I as an individual sacrifice in order to help those currently worse off then me- than why for God’s sake do the companies get to make a huge profit off it? How can Obama on one hand tell some working class kid that he has to save his money in order to buy insurance, because its better for society as a whole, and then simultaneously turn around and allow that kid’s money to go toward some obscenely rich CEO, or investment bank that owns insurance company stock? It makes a mockery- a sick, cruel, obscene, mockery- of the whole idea of social solidarity and mutual dependency. We’re all in this together, just some of us are a whole lot more in it!

The reason the Public Option always had such emotional resonance was that it introduced a player into the health care market that did not rely on the commodification of health insurance. And that was what health care reform was largely about for many of us- the idea that health care should be a social right, not a commodity to be bought and sold through the impersonal logic of supply and demand like any other widget in the marketplace. As Daniel Rodgers said about the transatlantic progressives:” not everything belonged in the market. This was the thread that, ultimately, wove their endeavors together.” Health care, say it with me, does not belong in the marketplace.

New Dealers used to talk about social rights, the idea that along with things like free speech and religious freedom, the government would guarantee you those material conditions like housing, jobs, and food that were essential to living a decent and dignified life (and to keep you from voting for the Commies…). Your access to those things, then, would be mediated by a citizen relationship, not a consumer relationship. In practice it never worked out as well as promised, but the reality of citizen control has ensured that democratically managed entities like Social Security and Medicare are protected, while privately owned (and therefore undemocratic) insurance companies have become inaccessible and inhumane. Liberals hoped the Public Option could become like that: a democratically controlled entity that would be responsive to people as citizens and not just as consumers.

And again, I understand the economic argument for the individual mandate. But most people (and lets thank our lucky stars for this) are not economists. The detached language and pseudo-scientific epistemology of most economists has very little room for ideas like justice, fairness, social solidarity, citizenship and democracy. Thus solutions designed purely by economists won’t resonate with us fools still naive and soft-hearted enough to believe in those things.


Written by Peter Wirzbicki

February 23, 2010 at 14:43

5 Responses

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  1. The public option wasn’t tossed because it was economically ineffectual or insignificant. It was tossed because people are convinced that “markets” create efficient outcomes. Requiring that individuals buy insurance from private companies is a way to get close to the cost savings that would result from public health care without freaking people out with socialism.

    It isn’t the economists that messed up the health care bill, but decades of conservative think tanks telling everyone “you are john galt.”


    February 23, 2010 at 22:20

  2. […] a comment » So I mostly agree with Wiz’s post about healthcare. It is a right, and in principle, should not simply be treated like a commodity, […]

  3. good to see ya getting some lap dances and taking some shots on saterday night we will have to do it again really soon


    March 2, 2010 at 12:15

  4. […] a comment » I’ve obviously been fairly skeptical of the Health Care bill, and can’t agree with those who consider the Bill to be The Greatest […]

  5. […] Chomsky, and Glenn Greenwald, and Matt Taibbi, and unfortunately, my fellow bloggers Wiz and Wotty have it wrong, I think, is in calling the new bill a gift to insurance […]

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