Balkinization: Elizabeth Warren’s health care trap

Elizabeth Warren’s health care trap

Andrew Koppelman

Elizabeth Warren appears to have finally come up with a health care plan that makes sense. How she got there was ugly. After an excessively ambitious Medicare-for-all proposal damaged her candidacy, she has pivoted to a more modest, and much more politically feasible, set of ideas. Jordan Weissman wisely points out that it would have been better if she had done it with fewer political contortions.

Michael Brendan Dougherty, one of the last (God bless him) anti-Trump conservatives, thinks that it’s a political mistake, because the left will feel betrayed and abandon her. He might be right. A big part of the Democratic base insists on universal Medicare: a complete overhaul of the health care payment system, abolishing all private insurance. It is a foolish demand. Whatever the merits, it is politically impossible. If you hope to excise the ugly boil that is Donald Trump, you need to understand why.

The basic problem of American health care reform is that as it has developed, insurance has been selectively extended to slivers of the population – people with decent jobs, the elderly, the poor, veterans - that were either unusually politically powerful, unusually sympathetic, or both. When the majority, and the most politically vocal parts of the majority, have full protection, then it is hard to expand further. This generated what Paul Starr calls a “policy trap”: so many people were given a stake in the new status quo that further change, in the direction of universal health care, became extremely difficult.

In 1994, Bill Clinton fell squarely into the trap. Most Americans are satisfied with the health insurance that they have. Yet his central idea was to have all insurance funneled through new health insurance purchasing cooperatives, which would negotiate with insurance companies and then present a menu of options to their customers. A national health board would administer a global budget. Employers could no longer purchase coverage directly; they would have to purchase through the cooperatives instead. Small employers that did not provide insurance for their employees would be required to do so. Many doctors and hospitals would have to affiliate with health plans. Perhaps most importantly, employees would probably have to choose different health plans than they already had, and thus change doctors and hospitals.

This was the deepest political flaw in Clinton’s proposal, and Obama learned from it. Obama built on the existing system rather than trying to replace it entirely. (I tell this story in the first chapter of my book, The Tough Luck Constitution and the Assault on Health Care Reform.) The result is inelegant, but it passed, it is working, and millions of Americans are better off as a result. Lives have been saved. The fear of change nonetheless made the bill a very near thing, and there continues to be enormous grievance about the tiny amount of change that did happen. In selling his plan, Obama repeatedly said that if you like plan you have, you can keep it. When that turned out to be true a mere 98% of the time, he was given enormous grief for it. Politifact declared it the lie of the year. It is a massive political mistake to mess with the existing system more than you absolutely must.

That’s why so many of the smartest Democratic political analysts have argued that the demand for Medicare for All, if it is embraced by the Democratic candidate, is a good way to help Trump get a second term.

Trump, who offered nothing but a vague promise to replace Obamacare with “something great,” was able to persuade many voters that he would give them better coverage at lower cost with lower deductibles. That’s what they actually care about. Warren should focus on that and not get lost in the wonky details. Perhaps now she can.

Posted 2:37 PM by Andrew Koppelman [link]