Posts Tagged ‘Obamacare’

Spurious Invocations and Socialized Medicine

Sunday, 19 March 2017

Advocates for funding or for in-kind provision of medical services through the state — some degree of socialization of medicine — frequently assert that there is a basic human right to health or to medical services. But there is invariably a bait-and-switch, because health cannot be provided as a right, basic or otherwise, universal to human beings or even held by all members of a large, naturally formed community such as a nation; and a right to medical services gauged in terms other than consequences for health would be grossly implausible and otherwise unappealing.

It should be immediately obvious that there cannot be a basic right to medical services, because a basic right exists in any context in which there is a person, even when that person is in isolation. One cannot make a claim to the services of others if there are no others, nor can one make a claim to the use of technologies that simply don’t exist. That’s why genuine liberalism understands that basic rights aren’t claims to the services of others, but instead are claims to be free from various sorts of interference by others. Robinson Crusoe cannot see a doctor when he is alone on the island, yet can speak his mind whether he is alone or has neighbors.

Derived rights are another matter. Derived rights are founded upon basic rights, but may emerge in a social context and be informed by the available resources, including technology. And there might even be a derived right that, though only emerging in some context, were universal to some population and involved positive claims to goods or to services. To provide an argument that health or medical care were just such a right, advocates of socialized medicine would have to identify and explain a process of derivation. While some persons making the assertion that there were instead a basic right to health or to medical care are simply swept-up by emotion, doing so also short-circuits a recognition of responsibility for that identification and for its explanation.

There are advocates who speak and write of the social contract and propose to find support thereïn for socialized medicine at present levels, and perhaps at still greater levels. But what is here called the social contract is not the contract that Hobbesians or liberals once imagined to be adopted at the beginnings of civil society; rather, a set of expectations held by some members of a society is being called a contract, as if such expectations alone could somehow contractually bind everyone within that society. The need to identify and explain the derivation of an ostensible right to medical care remains unmet by the use of the misleading metaphor of a contract. (Perhaps Mr Crusoe expects Friday to begin studying medicine upon arrival, but what of it?) It might also be noted that reference of this sort to a social contract is profoundly conservative — in the original sense of conservative — because the principal informant of expectations about social outcomes is tradition. And, if such expectations did have the sort of moral force that is imputed to them by the invocation of the social contract, then practices such as the subordination of women in various societies could be defended by reference to the social contracts of those societies. Even if such defense is somehow progressive, it is utterly illiberal.

In any case, health itself cannot be delivered as a right universal to human beings nor within some smaller but still large and naturally formed community. Some people have dire medical conditions for which there is no effective treatment, so there is no right to health itself. One might acknowledge that indeed there is no right to health yet assert that there were still a right to medical care; but others have conditions that could be corrected only by diverting resources that would otherwise be used to provide medical treatment to different people; and it is incoherent to speak of rights as things that may be in conflict — indeed, the point of insisting that health or medical care were a right (as opposed to a lesser desideratum) is to make an over-riding claim. One might finally punt to an assertion that everyone simply had a right to medical care regardless of need; but, thus unlinked, there is no more reason to suppose an entitlement to some allotment of adhesive bandages and of aspirin tablets than to suppose an entitlement to an allotment of bubble gum.

The actual provision of medical goods and services under socialized medicine cannot be about rights, and so it isn’t about rights; it is instead a matter of politicized collectivist calculations. Essentially, popular opinion is motivated by a naïve and incoherent utilitarianism — trying somehow to maximize an implicitly quantified sum of human well-being (with perhaps odd lexicographical properties), but making exceptions here and there driven by pity or by respect for some people and enabled by blindness to the costs to others; and officials of various sorts try to keep some share of the public happy but more generally pursue their own interests. Those who are not served under the programme or who find their access to medical care reduced or even effectively ended by socialism are waved-away as unfortunate victims of practical limitations, previous talk of rights not-withstanding.

I’m not at all a fan of collectivist calculations; typically they assume quantifications that don’t hold, and otherwise they seem arbitrary in what they seek to maximize. But, if those calculations truly made sense, then one would want to consider the long run, to include the well-being of people in the future in one’s aggregation; and thereïn lies the rub. Unless one assumes that humankind is fairly soon to come to an end, there are more people yet to be born than are alive to-day. If there truly were a collective aggregate to maximize, then anything done to-day that impaired economic development in the future would be counter-indicated. If people in the future were generally wealthier, then they would enjoy better medical care and almost surely better health. If we allow for considerations beyond the medical, the case for economic development is greater still. And, because it cannot allocate resources with economic efficiency, socialized medicine is ultimately a drag on economic development and thus on medical progress.

Socialized medicine doesn’t deliver a basic right; it doesn’t deliver a derived right; in the long run, it means that more people suffer (though suffering itself has no aggregate across persons) and that at any given age a greater share of people die. Refusing to face these points doesn’t make one a nicer person; accepting the truth doesn’t make one uncaring. Forcing the innocent to swallow bad medicine is not kindness.

Theatre of the Absurd

Wednesday, 6 January 2016

It is often asserted that the current President runs a continuous campaign; that, even now, when he can no longer be reëlected nor get a Congress more to his liking before his Administration ends, he campaigns.

Well, more generally, his Administration has been theatre. The apparent campaigning is a manifestation of that. And to-day I read that he has produced a trailer for his up-coming State of the Union Address. A trailer. It makes perfect sense, because the Address is theatre. It has long been theatre, but he does theatre as did no President before him.

He’s been concerned to posture and to act in ways that he expects to be made to look good by to-day’s mainstream media and by that bloc of historians who decided, even before he took office, that they would depict his Administration favorably almost without regard to whatever he ended-up doing.

The recent climate accord, for which there was so much build-up and from which nothing came but loose and unenforceable promises, was theatre. The negotiations with Iran, in which many meetings were held to agree that the United States would throw up its hands (something that it could more simply have done unilaterally) were theatre.

Even the Affordable Care Act has become theatre. As costs spiral out of control it approaches its implosion, but it will be portrayed as a Noble Effort, ruined by Republicans and by the inherent wickedness of market forces.

And it was theatre when the man who has killed so many children with his drone strikes wept for the murdered children of Sandy Hook.

Theatre. The cost of the ticket is very high.

for generations to come

Saturday, 4 July 2015

I believe that I last wrote here about what became the Affordable Care Act — aka Obamacare — in an entry posted on 28 July 2008. I’ve been meaning to write about it since, but I paused to await the outcome of NIFB v Seleblius, and then again to await the outcome of King v Burwell.


To understand what really drove the Democratic Party to pass the Affordable Care Act, one may look at the experience of the Social Security Act (1935).

The programme of old-age benefits — which is what most Americans have in mind when they refer to Social Security — is one that had been failing slowly over the many decades of its existence. Population growth has slowed strikingly, and life-spans have been extended significantly, so that the number of people paying into the system has declined dramatically relative to the number of people to whom payments have been made. At the same time, in various ways the typical payment per individual has been allowed to climb. The tax used to fund it has never collected enough revenue to do so indefinitely. At times, revenues have been much greater than benefits; but, none-the-less, there has never been a moment over the last 50 years or more when the demographics did not show that, within the expected lifetime of a young person, promised benefits would exceed revenues and exhaust whatever had been saved under the revised programme.

Congress did not plan for the old-age benefits programme to fail, slowly or otherwise. Congress simply didn’t take a careful look at the future. The immediate concerns of Congress were to exploit the political gains to be had from promising a pension programme, and to short-circuit political support for the ruinous Townsend Plan.[1] But this slow failure has proved to be hugely rewarding to the party most responsible for effecting the programme.

Because the programme has failed slowly, there was sufficient time for a large share of Americans to become dependent upon it. It was even, for a while, said to be the third rail of American politics — analogous to the rail delivering current to an electrically powered train, in the sense that touching it would prove fatal. As failure has recurringly loomed, Republicans (having increasingly become the party of opposition to the New Deal Coälition) struggled with how to respond to the failure of a programme with such broad support, while the Democratic Party has been able to position itself as rescuer. The slow failure of their creature has been an important part of the success of their party.

Although supporters of the programme often speak and write as if opponents would simply and abruptly withdraw benefits from all recipients, a more common suggestion has been to phase-out the present programme in favor of an overt poverty-relief programme. Thus, for example, those born after some point in time would received reduced benefits — perhaps in some cases no benefits — if they had income or wealth measured above some levels. This idea meets resistance not only from those who would lose benefits, but from those who would then find themselves on welfare.

Younger people, looking at a future tax burden, and perhaps doubtful that the next major reforms will prove sufficient to maintain the programme through their own retirements, are most often open to suggestions of reform. But, as time passes and they age, they find themselves having paid much of the tax that they might earlier have hoped to avoid, so that the principal pecuniary result of a phasing-out would be either to deny them benefits or to place them on welfare. Additionally, as they age, so do their parents, who go from being perhaps middle-aged to being elderly.

A sense may often be retained that they would have been better-off had the programme been phased-out when they were younger,[2] and that those now young would be better-off if the programme were phased-out now. There is, thus, something of the flavor of a sub-optimal Cournot-Nash equilibrium to it all. A lot of people would admit that the programme ought not to have been instituted; but, since it was, and since they would personally be hurt by an attempt to end the programme, they will not assist in an unwinding, and may even actively oppose an unwinding.

And, so, they are increasingly inclined to support the Democratic Party, which continues to promise to do whatever is necessary to keep the programme going.


The Affordable Care Act was intended to creäte another slowly failing programme with a large number of people dependent upon it. There was no illusion on the part of most of those who voted for the Act that this programme would be the one exception in the history of large state programmes. They might not know the core reason that such programmes perform so badly, but they’ve had plenty of observations of failures. As with the Social Security old-age benefits, each time that failure loomed for Obamacare, the Democratic Party could position themselves as rescuers of the programme and thus of the people dependent upon it in order to receive medical treatment. And the Republican Party would again be forced to choose between protecting their brand and protecting their jobs. The public might perhaps conclude that they would have been better-off had the programme not been brought into existence in the first place, but they’d see themselves now being made still worse-off in any unwinding, however an unwinding might benefit later cohorts.

Indeed, when the President acted to preserve the programme by ignoring the plain wording of the law, a large part of the defense of his action was that a substantial number of people had become dependent upon the programme. Even a great many people who had been insured, at lower cost, previous to the programme could have suddenly found themselves uninsured, and the programme was defended on the basis of a dependency that it had induced amongst those people. Meanwhile, the Republican Party, though returned to power largely because of voter discontent with the programme, has been widely criticized for not agreeing upon some view as to how health care ought to be allocated, and then presenting that view to the public. Many Republicans essentially propose adopting a position they are just stuck with Obamacare, since the Supreme Court has twice now refused to stop it.

However, Obamacare is not a slowly failing programme; it is a rapidly failing programme.

In my entry of 28 July 2008, I explained that the programme was effectively to tax the insurance policies of the healthy in order to subsidize the unhealthy; and that, in the absence of compulsion, the healthy would not insure, causing premia to spiral upward.

In order to make passage of the law politically palatable, the compulsion was relatively weak. The annual penalty for failure to buy insurance is well less than the cost of insurance, and the IRS is forbidden to attempt to collect the penalty (if not paid voluntarily) except by reducing the annual tax refunds of those against whom it is charged. I suspect that the Democratic leadership had some awareness that this penalty structure was going to be inadequate, but were thinking of this weak compulsion as the camel’s nose — they planned to get the rest of the beast into the tent in some later session, with higher penalties and more freedom of action for the IRS. They didn’t understand that they’d lose control of one chamber in the very next election.

So, indeed, many of the relatively healthy chose not to buy insurance, despite repeated extensions of the buying period. And, as a consequence, premia are going to rise by more than 10%. This increase makes insurance a bad buy for an even larger group of people, who will choose not to buy insurance next year. That will cause a further rise in premia. And so forth. Premia should be expected to increase by more than 10% every year, until the programme implodes as affordable insurance moves out of reach for a huge share of people. (With annual increases of more than 10%, premia would more than double over just eight years, but I do not expect the programme to survive to a doubling of premia!)

There was talk of how, if King v Burwell were decided against the President, Obamacare would go into a death spiral. In fact it was already in a death spiral. King v Burwell could have accelerated that sharply; if the spiral were faster, then the health-care system would have been less distorted by Obamacare, and the unwinding would thus be injurious to fewer people.

The sooner that it were admitted that Obamacare were in a death spiral, the sooner that a drum might be beaten for toughening penalties upon those who refuse to buy insurance. (Or for kicking the insurance companies to the curb, and establishing a more explicitly socialistic system.) But the President is not a man to admit to mistakes, nor do supporters want to admit to yet more deep problems in a programme that has already had many embarassments, as such an admission would increase skepticism. Further, the elected Republicans are unlikely to alienate their base by acting to pull Obamacare out of a death spiral any time soon, though most of them might do so from expediency were Obamacare to last-out a decade.


[1] The Townsend Plan, advanced by Francis Everett Townsend beginning in 1933, was that each person in the United States over the age of 60 years were to be given a monthly pension of $200, conditional upon a requirement that the entire $200 be spent within a month. The theory was that this spending would result in an increase in economic activity that would, in turn, effectively pay for the pensions.

I won’t endorse simply claiming that, since the CPI is now about 30 times that in 1933, $200 then would be equivalent to about $6 000 to-day. (Comparisons of so-called price levels becomes increasingly problematic as time-spans become longer.) None-the-less, one should see that a $200 monthly pension would have been rather breath-taking.

The Townsend Plan was supported by a very large number of people, and was especially popular amongst those over or approaching the age of 60 years, and amongst those economically responsible for the support of older people.

[2] This sense will be especially acute amongst those who understand that the Social Security old-age benefits crowd-out investment-savings for retirement. With reduced investment, the economy grows at a diminished rate.