Just How Affordable Is That Affordable Health Insurance?


Over the weekend, the Boston Globe ran an article warning that, if health care reform passes, insurance premiums (which would be mandatory) could be unduly high, even for those whose premiums are subsidized. It's a reported piece, but the thrust of it seems to come basically from the left: There's some mention of lowering the minimum coverage level (as I've said before, the problem with mandates is that they require minimums), but the chief worry seems to be that subsidies are too low.

This is not a new concern. Liberals have pushed to expand insurance subsidies throughout the year, arguing that although subsidies increase the overall cost of the bill, they make for both better politics and better policy. The reasoning, as I understand it, is that higher subsidy levels help more people—especially the crucial middle class—and that bills that help more people will be more popular, and thus are more likely to garner support amongst legislators, who, after all, are more likely to vote for bills that people like.

But this has always seemed self-evidently wrong. If more subsidies automatically generated greater support, it ought to be easy to just load the bill with subsidies for everything, buy everyone off, and pass it. To some extent, that's what Democrats have attempted to do. But there are real limits to this strategy. At some point, concerns about overall cost trump concerns about subsidy levels. As the piece notes, "because President Obama has put a $900 billion limit on the bill's overall price tag, and because the country is facing mounting deficits, Congress cannot offer unlimited subsidies to those who need help." And it's arguably true that political considerations amongst legislators—the personal biases and interests of the few in Congress who actually get to vote—are as or more important than worries amongst the general public, which tends to be less engaged and less aware of the details of legislation. The result is that a few hundred members of Congress get to decide who pays and how much. Inevitably, that means picking winners and losers.

The broader lesson from this (and many other political and policy disputes over health care reform) is one which liberals seem uninterested in learning: That in the end, the inevitable result of legislation like this is to force individuals and families into situations they don't like, don't want, or can't afford, and to put the power to make decisions about who gets stuck in those situations in the political arena, and thus subject to all the unpleasant bickering and bartering of politics.