New York magazine’s Jonathan Chait says he’s confused by conservative glee over the news that Harvard professors are complaining about changes to their health plans due to Obamacare. The faculty is mad about an increase in their out-of-pocket costs, such as higher annual deductibles.
Conservatives, Chait points out, would like consumers in general to pay for a greater share of their health care out of pocket, rather than consuming it through our byzantine tax-sheltered insurance system. Adrianna McIntyre, a health-policy writer formerly of Vox, says she’s therefore “baffled” that conservatives are taking the professors’ side in this debate.
McIntyre and Chait may not be Harvard faculty (yet) but they’re smarter than this: Conservatives aren’t saying a $750 family deductible is too high or some great abuse. They’re saying it’s funny that Harvard professors think it’s too high, because said professors generally like Obamacare, and (according to Harvard) Obamacare is the reason their employer is raising it.
Liberal writers engaged in something similar about a year ago, expressing shock that conservatives kept pointing out how the high deductibles of Obamacare-exchange plans can be a burden for a lot of Americans. But conservatives say they’re for high deductibles and having skin in the game, liberals said, as if this was some kind of significant, esoteric insight.
Obamacare hiked the cost of health insurance (leaving aside subsidies) by implementing higher taxes and huge new regulations. Those meant higher deductibles and higher premiums.
Conservatives therefore criticized both developments, even though sometimes they think other policies that produce higher deductibles are a good thing. Liberals sometimes like to argue that people really only care about ends and that all conservative process objections are disingenuous — I’m tempted to see what Chait’s doing as a particularly insane extension of that argument.
“Harvard’s reforms show that in some ways, Obamacare has pushed the health-care system moderately in the direction conservatives favor, by encouraging employers to shift more of the cost of care onto employees,” Chait writes. But the development at Harvard is higher overall health-insurance costs — no one favors that. Harvard chose to pass some of the higher cost on to its employees through out-of-pocket increases, which has nothing to do with the fundamental structure of Obamacare except inasmuch as it forces costs up almost everywhere.
The deductible increase is so small that it’s hard to imagine that’s where most of the cost increases are even ending up. One of Obamacare’s financing mechanisms, the Cadillac tax, will force pricey plans like Harvard’s to do more out-of-pocket financing some day, but other parts of Obamacare are driving costs up right now — Harvard refers to the Cadillac tax as a “potential” cost.
Chait is right the Harvard example shows us that increases in out-of-pocket health spending can be really unpopular. This is a political challenge for conservative health reforms — and for liberal reforms to the extent that this is how they expand coverage. That’s why conservatives pair that reform with liberalization of other elements of the market, so that overall costs can be reduced by market forces.
Assailing higher deductibles certainly can be problematic territory if one has the eventual goal of a consumer-driven health system. To the extent that conservatives may have suggested deductibles in the thousands of dollars on Obamacare plans are intolerable, that’s unwise, because high deductibles aren’t a bad thing per se. But there are benefits to individual control of health-care dollars for almost everyone.
Virgil scholar Richard Thomas offered colorful criticism of the Harvard plan to the Times, but conservative reformers, confident in market forces, can genuinely say of out-of-pocket increases they favor, forsan et hikes olim meminisse iuvabit.
Higher deductibles are definitely a bad thing when coupled with higher premiums and less choice brought on by a bad law, which is why the Harvard episode is not evidence that, as Chait claims, “Obamacare is implementing some versions of conservative ideas.” And yes, many conservatives may still not comprehend the political challenge of higher deductibles — but I don’t think that’s because, as Chait argues, we have “a conservative media apparatus that relentlessly turns all news stories into either non-stories or confirmation of their increasingly discredited hysteria.”
Any more, that is, than liberals have a media apparatus that didn’t prepare their partisans or Americans in general for the unpopular sides of Obamacare, and still can’t quite spin the situation to satisfaction.