Here’s a brief (very brief) sampling that caught your editor’s eye, for one reason or another…
I like to think of the big tradeoff as being between community and liberty. From this perspective, the health reform bill offers more community (all Americans get health insurance, regulated by a centralized authority) and less liberty (insurance mandates, higher taxes). Once again, regardless of whether you are more communitarian or libertarian, a reasonable person should be able to understand the opposite vantagepoint.
In the end, while I understood the arguments in favor of the bill, I could not support it. In part, that is because I am generally more of a libertarian than a communitarian. In addition, I could not help but fear that the legislation will add to the fiscal burden we are leaving to future generations. Some economists (such as my Harvard colleague David Cutler) think there are great cost savings in the bill. I hope he is right, but I am skeptical…My judgment is that this health bill adds significantly to our long-term fiscal problems.
No piece of legislation as complex as the health care reform bill can avoid a whole variety of unintended consequences. Elsewhere, I and others have noted that a provision in the law appears to create strong incentives for businesses not to hire poorer, single mothers who will need subsidies to afford family-covering health insurance. Among the other unintended consequences of the health care reform legislation are its possible effects on small health insurance providers.
The support for the bill coming from the major insurers should be one piece of evidence that they expect it to be good for them, particularly due to the provision that requires Americans to buy health insurance. In addition, as is the case with almost all regulation, larger firms are better able to absorb the fixed cost of compliance than are smaller firms. Given that this bill authorizes the hiring of over 16,000 new IRS agents to enforce its tax code provisions, such compliance costs are sure to be high, which will have a higher relative burden for the smaller firms.
It has been a long slog, since those days in the early 1990s when right-wing policy analysts proposed an individual mandate to purchase health coverage as a respectable, market-oriented, responsibility-based alternative to either government-provided health care (the nanny state) or mandated employer-provided health care (the boss state). In November, 2004, Republican Governor Mitt Romney of Massachusetts followed through on that conservative proposal, and in April, 2006 he signed into Massachusetts law a health reform plan based on it.
Having conquered Massachusetts, RomneyCare is now the law of the land. But how did Republican RomneyCare become Democratic ObamaCare?
True, the copy is not exact. David Frum points out all the possible reasons–valid and invalid, important and unimportant–that conservatives might be unhappy with this Obama-Pelosi-Reid version of RomneyCare. He finds six:
1. it allows illegal aliens to buy health insurance with their own money;
2. the progressive taxes imposed to finance it will only become larger and more progressive as time passes;
3. a public option may be added to the bill at some point;
4. it imposes too many costs on small businesses;
5. it doesn’t impose enough cost controls;
6. it expands the dysfunctional program that is Medicaid.
But these issues are minor compared to the big nut — the essence of the reform — which is that the insurance market has been restructured to remove those adverse-selection and moral-hazard problems that have broken our private insurance-based health-financing system. Americans are now being asked not to shirk their responsibilities but rather to act like adults: to take on the burden, to the extent they are financially able, of making sure that when they wind up at the hospital the cost of paying for their care is not loaded onto somebody else’s shoulders.
Will the Obama Health legislation increase political opposition to immigration? I see an expansion of coverage for 30 million people in the United States. This must be an income transfer to this group and this means that taxpayers will cover this. Now, I do hope that preventative medicine will reduce this group’s demand for costly emergency care but I do not know of a NBER quality health economics paper carefully documenting this optimistic claim.
Let’s assume that the expansion of health care insurance coverage for the uninsured is an income transfer. If immigrants are over-represented in this group (or if this is even perceived to be true), will political opposition to immigration rise? The economics literature on the determinants of redistribution would say yes. Read the Alesina and Glaeser book. If you don’t have time to read that, then read this . The ugly fact that emerges is that we are not generous when the recipients “look different” than us. Now, how big of a tax price will we collectively face because of this legislation? The CBO doesn’t know the answer to this and I don’t believe a word of the “scoring” that they do. Health economists will have plenty to do over the next couple of years.