How Obamacare Will Destroy Our Social Insurances
Here’s how GOP Obamacare hypocrisy backfires
GOP base doesn’t understand right wants to turn Medicare, Social Security and more into a very similar program
The smartest thing yet written about the botched rollout of the Affordable Care Act’s federal exchange program is a post by Mike Konczal of the Roosevelt Institute at his “Rortybomb” blog at Next New Deal. Konczal makes two points, each of which deserves careful pondering.
The first point is that to some degree the problems with the website have been caused by the overly complicated design of Obamacare itself. Instead of being a simple, universal program like Social Security or Medicare, the Affordable Care Act system is designed as if to illustrateSteven Teles’ notion of “kludgeocracy” or needless, counterproductive complexity in public policy. By using means-testing to vary subsidies among individuals and by trying to match individuals with private insurance companies, the ACA requires far more information about people who try to sign up than do simpler public programs like Social Security and Medicare. If Congress had passed Medicare for All, the left’s preferred simple, universal alternative to the kludgeocratic ACA mess, signing up would have been a lot easier and the potential for website snafus correspondingly less.
Konczal’s second point is even more important — the worst features of Obamacare are the very features that conservatives want to impose on all federal social policy: means-testing, a major role for the states, and subsidies to private providers instead of direct public provision of health or retirement benefits. This is not surprising, because Obamacare’s models are right-wing models — the Heritage Foundation’s healthcare plan in the 1990s and Mitt Romney’s “Romneycare” in Massachusetts.
This point is worth dwelling on. Conservatives want all social insurance to look like Obamacare. The radical right would like to replace Social Security with an Obamacare-like system, in which mandates or incentives pressure Americans to steer money into tax-favored savings accounts like 401(k)s and to purchase annuities at retirement, with means-tested subsidies to help the poor make their private purchases. And most conservative and libertarian plans for healthcare for the elderly involve replacing Medicare with a totally new system designed along the lines of Obamacare, with similar mandates or incentives to compel the elderly to buy private health insurance from for-profit corporations.
If you don’t like Obamacare, you should really, really hate the proposed conservative alternatives to Social Security and Medicare. Konczal writes:
Conservatives in particular think this website has broad implications for liberalism as a philosophical and political project. I think it does, but for the exact opposite reasons: it highlights the problems inherent in the move to a neoliberal form of governance and social insurance, while demonstrating the superiorities in the older, New Deal form of liberalism. This point is floating out there, and it turns out to be a major problem for conservatives as well, so let’s make it clear and explicit here.
Building on an insightful discussion of public policy by means of subsidies or “coupons”published by the New America Foundation’s Next Social Contract initiative, Konczal contrasts the indirect, market-based, state-based neoliberal/conservative approach to social insurance that inspired Obamacare with the kind of universal federal social insurance preferred by liberals in the tradition of FDR and LBJ:
So this tells a story. Let’s refer to these features of social insurance, which are also playing a major role in the rollout problems, as “Category A.” Now, what would the opposite of this look like? Let’s define the opposite of this as “Category B” social insurance. And let’s take these two categories and chart them out:
Konczal speculates that the flaws of Obamacare may undermine public support for proposed conservative replacements of Social Security and Medicare:
However, the smarter conservatives who are thinking several moves ahead (e.g. Ross Douthat) understand that this failed rollout is a significant problem for conservatives. Because if all the problems are driven by means-testing, state-level decisions and privatization of social insurance, the fact that the core conservative plan for social insurance is focused like a laser beam on means-testing, block-granting and privatization is a rather large problem. As Ezra Klein notes, “Paul Ryan’s health-care plan — and his Medicare plan — would also require the government to run online insurance marketplaces.” Additionally, the Medicaid expansion is working well where it is being implemented, and the ACA is perhaps even bending the cost curve of Medicare, the two paths forward that conservatives don’t want to take.
Will the flaws of Obamacare really hurt the right and help center-left supporters of universal social insurance? I doubt it.
To begin with, this implies a willingness of the right to acknowledge that Obamacare, in its design, is essentially a conservative program, not a traditional liberal one. But we have just been through a presidential campaign in which Mitt Romney, who as governor of Massachusetts presided over the creation of the most important model for Obamacare, rejected any comparison of Romneycare with Obamacare. What is more, instead of agreeing with Konczal that the flaws of Obamacare are shared by most conservative entitlement reform proposals, conservatives are likely simply to denounce Obamacare as “socialism” or “collectivism” while promoting their own, Obamacare-like replacements for Social Security and Medicare, with blithe indifference to their own inconsistency.
Nor are progressives likely to press the point in present or future debates. Unlike conservatives, who are right-wingers first and Republicans second, all too many progressives put loyalty to the Democratic Party — most of whose politicians, including Obama, are not economic progressives — above fidelity to a consistent progressive economic philosophy. These partisan Democratic spinmeisters are now treating Obamacare, not as an essentially conservative program that is better than nothing, but as something it is not — namely, a great victory of progressive public policy on the scale of Social Security and Medicare.
In doing so, progressive defenders of Obamacare may inadvertently be digging the graves of Social Security and Medicare.
If Obamacare — built on means-testing, privatizing and decentralization to the states — is treated by progressives as the greatest liberal public policy success in the last half-century, then how will progressives be able to argue against proposals by conservative Republicans and center-right neoliberal Democrats to means-test, privatize and decentralize Social Security and Medicare in the years ahead?
I predict that it is only a matter of time before conservatives and Wall Street-backed “New Democrats” begin to argue that, with Obamacare in place, it makes no sense to have two separate healthcare systems for the middle class — Obamacare for working-age Americans, Medicare for retired Americans. They will suggest, in a great bipartisan chorus: Let’s get rid of Medicare, in favor of Lifelong Obamacare! Let’s require the elderly to keep purchasing private insurance until they die!
I’m sure a number of token “centrist” Democrats will be found, in due time, to support the replacement of Medicare by Lifelong Obamacare. And with neoliberal Democratic supporters of the proposal as cover, the overclass centrists of the corporate media will begin pushing for Lifelong Obamacare as the sober, responsible, “adult” policy in one unsigned editorial after another.
Once Medicare has been abolished in favor of Lifelong Obamacare, perhaps by a future neoliberal Democratic president like Clinton and Obama, Social Security won’t last very long.
The conservative Republicans and centrist Democrats will argue that the success of Obamacare, in both its initial version and the new and improved Lifelong Obamacare version, proves that a fee-based, means-tested, privatized and state-based system is superior to the universal, federal, tax-based Social Security program enacted nearly a century ago in the Dark Age known as the New Deal. We will be told that, in a world with computers and globalization and apps or whatever, simple, universal, one-size-fits all social insurance is obsolete. In the “new economy,” public policy needs to offer as many baffling choices as airlines or gyms, like the ridiculous bronze, silver, gold and platinum plans of Obamacare.
At some point in the future, the right will introduce a plan to replace Social Security with a system of individual mandates and fines to compel working-age Americans to invest in for-profit Wall Street mutual funds during one’s working years, and to compel them to buy annuities from for-profit money managers at retirement (which with the help of centrist Democrats will be postponed to 70 or beyond). The genuine progressives will respond with a defense of Social Security. Whereupon the faux-progressives, the neoliberal heirs of Carter, Clinton and Obama, will reject the option of preserving Social Security — why, that’s crazy left-wing radical talk! — but insist that the subsidies for the poorest of the elderly be slightly increased, as the price for their adoption of the conservative plan to destroy Social Security. Throughout the process, the right-wing Republicans and neoliberal Democrats will ask, “How can progressives object to means-testing, privatization and 50 state programs, when those are the very features of the Obamacare system that our friends on the left celebrate as a great achievement?”
Think about it, progressives. The real “suicide caucus” may consist of those on the center-left who, by passionately defending the Affordable Care Act rather than holding their noses, are unwittingly reinforcing the legitimacy of the right’s long-term strategy of repealing the greatest achievements of American liberalism.
Michael Lind is the author of Land of Promise: An Economic History of the United States and co-founder of the New America Foundation.