July 21, 2017

ObamaCare, the Government Shutdown, and the Debt Limit Crisis – Prepare for Worse

The government shutdown of 2013 is just the latest symptom of a broken political process decades in the making. The bad news is that things are likely to get worse as time goes by. From all I hear and read, our political system may be at a tipping point, requiring radical rethinking of what it means to be an American, what democracy should be about, and our willingness to accept that ultimately we will all sink or swim together.

ObamaCare – Is it Really More Affordable?

The Affordable Care Act (ACA), dubbed ObamaCare by its detractors, sought to address the fact that in the wealthiest nation in the history of our world, tens of millions of citizens had no medical insurance. These, our co-citizens, would risk going without medical care when sick, or went to a local ER, where they could get care even if they couldn’t pay. You might think this meant there was no need for a massive law like the ACA. However, ERs aren’t designed to treat the flu. An ER, with its large staff of medical professionals, equipped with the latest high-tech diagnostic equipment, optimized for treating urgent medical problems isn’t a cost-efficient solution for ordinary healthcare. When many people regularly show up at the ER simply because they’re uninsured, the hospital’s costs go up, and are passed on to other patients, health insurance plans, and the taxpayer.

The ACA doesn’t make health insurance plans cheaper. In fact, for the same deductible, out of pocket maximum, and coinsurance, premiums are significantly higher because insurers can no longer turn away people with preexisting conditions or even charge them more. So, you may ask, how is the ACA “Affordable?” The answer is in the federal subsidies offered to low income people. Someone making $24,000 can get “Bronze” coverage free of charge, while a family of 4 earning even $80,000 gets about 25% off a Bronze premium, courtesy of the taxpayer.

ObamaCare – An Ideological Battle

Conservatives believe government should have as limited a role as possible in our lives. This implies it isn’t the taxpayer’s responsibility to subsidize healthcare for the poor. From this perspective, ObamaCare is the poster-child of government overreach, imposing a new, disguised tax. Federal subsidies help the poor and lower-middle-class avoid the sting, so the ACA’s financial “hit” ends up targeting mostly upper- and upper-middle-class Americans. Not coincidentally, that’s the traditional GOP constituency. Liberals see the same issue as a moral and societal obligation along the lines of JFK’s statement – “To those whom much is given, much is expected.” They hold that if you’re successful, you owe it to society to help the less fortunate. Conservatives counter that providing too much welfare disempowers the poor, giving them free fish instead of teaching them how to, and encouraging them to fish for themselves, to paraphrase a proverb.

Extreme conservatives hold even the federal income tax as unconstitutional, and the ACA as imposing yet another unconstitutional tax. They argue the ACA’s individual mandate, which forces individuals to buy health insurance on pain of being fined, is another unconstitutional government over-reach. These beliefs are belied by a recent US Supreme Court ruling. The Supreme Court, led by George W. Bush appointee Chief Justice Roberts, ruled the ACA constitutional, and the individual mandate’s penalty a constitutionally-allowed tax.

Fiscal conservatives argue the ACA is a form of socialized medicine, with some conservatives going further and calling this a government-run health insurance program. They point to the UK and Canada as examples of countries whose socialized health systems nearly bankrupted their nations. They also point to long wait times for many health services where low reimbursement levels for providers have reduced the supply of doctors below that needed to provide prompt service. Liberals point out there are many differences between these foreign systems and that provided by the ACA. The ACA is based on private insurer plans, with pricing determined by those insurers. The ACA does however set minimum requirements on what health insurance plans must cover, determines what services must be provided free of charge (e.g. annual physical exams), and limits the ability of insurers to decline coverage to applicants with higher health risks or even preexisting conditions. It even prevents insurers from charging higher premiums from such higher-cost customers. All these requirements tend to drive up the average cost per insured for insurers, which the authors of the ACA hope will be offset by requiring millions of younger, healthy Americans to buy insurance at much higher cost than that available to them before the ACA’s implementation.

Conservatives also point to unintended consequences of the ACA. Specifically, they say the ACA reduced the maximum number of hours for an employee to count as part time from 30 to 27, and that employers have also reduced their part-time staff due to the cost of providing health coverage. They also say some insurance companies have left the health insurance industry, or shut down altogether, fearing they’d lose customers to government-provided plans, and become unprofitable. All these hurt job availability and income, especially in the part-time segment, which is especially harmful during the current fragile economic recovery.

The above is not intended to provide a comprehensive list of the arguments and counter-arguments between the two sides. What it does is show that with rational people disagreeing on the issues, the problem is not the disagreement, but rather the tactics of brinksmanship used by both sides. Marriage counselors can listen to a couple arguing for less than a minute before predicting with good accuracy how likely the couple is to stay together. They base these predictions on how the couple argues, rather than what they argue over. When one denigrates his or her spouse, talks down to them, and expresses cynicism, that relationship won’t last. Following similar logic, no one who follows the utterings of our elected officials and their most ardent supporters can fail to fear for our nation.

Government Shutdown and Debt Limit Fight – Symptoms of a Deeper Problem

Since 1776, the ever-shifting balance of power between the parties determined who won or lost many ideological fights. In the past, our constitution’s checks and balances forced each party to bend somewhat to achieve some of their objectives. What constrained politicians from pushing their agenda too far was the fear that being inflexible would prevent any gains, and cost them the next election. In the past few years that dynamic changed, leading to more divisiveness rather than less.

Two parallel processes have been developing for decades, gradually chipping away at our national cohesion. The first is redistricting for political advantage, aka gerrymandering. Whichever party holds sufficient advantage at the state level uses that power to modify voting districts to maximize future power. As a result, electoral challenge for the overwhelming majority of Representatives is no longer in general elections, but rather their party’s primaries. This is important because the majority in most general elections is centrist, rewarding political moderates. In party primaries, only passionate partisans participate, electing more extreme politicians.

The second process is media fracturing. Before the rise of cable TV and the Internet, Americans received news and editorial opinions from a relatively small number of outlets, all catering to the mainstream. These days, an enormous number of cable channels, satellite and Internet radio stations, and blogs cater to every imaginable political niche. This fracturing confirms our biases by providing only opinions like our own, mocking opposing views, rather than challenging us with those same opposing views presented by their proponents.

As the days and hours counted down to the Treasury’s deadline of midnight October 16, national polls showed a majority of Americans blamed Republicans in Congress most, but that President Obama and the Democratic party have not come out unscathed. Likely as a result, as of this writing, Senate Majority Leader Harry Reid (D) and Minority Leader Mitch McConnell (R) set out an 11th hour bi-partisan deal to reopen the government until January 15, 2014 and to suspend the debt ceiling until February 7. Speaker Boehner (R) said he would allow the senate deal to come to a vote in the House, where 200 Democratic Representatives and at least some GOP Reps would likely approve it. Even if successful, this deal merely punts the problem 3 months into the future. Unless negotiations between the parties give rise to a longer-term solution before then, we can expect another government shutdown, and if recent events are any guide, this one will last a week longer than the 2013 shutdown before we reach the same economic cliff, and if cooler heads don’t prevail again, we might find ourselves in a headlong plunge into a major global recession.

The twin processes mentioned above have led us to a tipping point. Extremely conservative Representatives respond to the wishes of those to whom they owe their seat. That’s very different from supporting the wishes of the American public. According to a Gallup poll about 27% of American adults self-identify as GOP supporters, and 31% support the Democratic party. If 40% of GOP voters support Tea Party positions, that’s 1 in 9 Americans. One can only assume the liberal equivalent drives unwavering Democratic opposition to compromise. If the most passionate liberals comprise a similar 40% of Democratic voters, that’s a mere 1 in 8 Americans.

The House of Representatives no longer represents all of us. In fact, it best represents fewer than 1 in 4 Americans, and unfortunately, only the most extreme on both sides. There appears to be little political advantage remaining to centrism, to reaching across the aisle. That’s the fundamental cause for the ongoing Washington gridlock, the never-ending, uncompromising fights over ObamaCare, Roe v. Wade, the budget, and debt ceiling increases. As I observed before, we can no longer afford to see fellow citizens who hold different opinions as enemies, rather than opponents. Until and unless we realize our current path leads to national ruin, and choose to change it, things will only get worse. In the immortal words of Walt Kelly’s Pogo the Possum – “We have met the enemy and he is us.”

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