Patterico's Pontifications


Mandate, myth and Ben Smith

Filed under: General — Karl @ 1:25 pm

[Posted by Karl]

Ben Smith (surprisingly) got his first political byline at BuzzFeed today.  It addresses a “pet peeve” of Smith’s:

[I]f the mandate won’t clamp down as hard on costs as its backers hoped, it also didn’t prove the political elixir some still believe it was, buying the myth is that the mandate effectively bought off the insurance industry.

The mandate “explains why the big insurers, while opposing the final legislation, never attacked it as vigorously as they did Bill Clinton’s ill-fated reform effort,” New York Times columnist Ross Douthat wrote this week.

Perhaps a stronger mandate would have soothed the insurers, providing them a guarantee of a big new market, but ObamaCare’s didn’t, and if they were quieter in that opposition, that was a tactical choice driven by the intense attacks on their industry.

In fact, Bloomberg News reported that the main insurance lobby, AHIP, quietly gave $86.2 million to the U.S. Chamber of Commerce for a slashing campaign against the plan. The contribution only became public the next fall.

At the risk of peeving Smith further, let’s review a lot of history Smith leaves out of his supposed “debunking.”  AHIP was planning to buy into big-government health legislation as far back as 2006.  The agenda of Big Insurance was consistent.  The industry would accept regulations, including guaranteed issue and coverage of preexisting conditions, in return for the individual mandate, while opposing the inclusion of a “public plan” that would unfairly compete with the industry.

The Bloomberg piece Smith cites turns out to not say quite what he seems to think it says:

The Chamber got the money from the America’s Health Insurance Plans as the industry urged Congress to drop a plan to create a competing government-run insurance plan.

Yes, AHIP, like the Chamber, opposed the so-called “public option.”  And if you look at the ad Bloomberg posted with the story, you will see it supported government action, but opposed the “public option” and an employer mandate.  Anyone see what they did not oppose? Anyone? Ben Smith? Bueller?  A “slashing” campaign this was not.  The Chamber supported the individual mandate, as did AHIP.

The BuzzFeed story is likely correct that AHIP would have spent less if the individual mandate had been even more punitive, but after a summer of getting hazed by the public Congressional Democrats set about watering down the politically toxic mandate, even as they continued to push for the inclusion of the “public option.”  AHIP spent not to defeat Obamacare, but to ensure the legislation conformed to conditions they would accept.  Obama’s flip-flop on accepting the mandate was key to avoiding the total opposition Bill (and Hillary) Clinton faced from Big Insurance in 1993-94.  Douthat is correct about that; Smith is the one dealing in myth.

Update: Ben Smith responds; I reply.


12 Responses to “Mandate, myth and Ben Smith”

  1. Karl – The narrative advanced by liberals like Josh Marshall that health insurers loved ObamaCare because they would get access to oodles of more customers and premium dollars has never made sense. The actions of the health insurers was all about deciding what was possible, especially in light of getting constantly bludgeoned and demonized as heartless, cruel profiteers by the left.

    As a thought experiment, consider that if ObamaCare is such a good deal for health insurers you would normally expect many new entrants into the market to reap all the rewards. Have we been seeing floods of such announcements? Heck no, in fact, just the opposite, we have seen companies announce their exit from the field.

    Another thought experiment. Take a peek at the stock prices of health insurers such as Cigna, U.S. Healthcare and Aetna last week during the Supreme Court oral arguments about ObamaCare as a consensus seemed to develop that the individual mandate might be in trouble. You might notice that the market does not think highly of the impact of the impact of the individual mandate on health insurance stocks and rewarded them by pushing them to 52 week highs.

    The narrative from the left about health insurers and ObamaCare has been complete BS from the start IMHO.

    daleyrocks (bf33e9)

  2. daleyrocks,

    Sure, but Smith some how translates Douthat’s “never attacked it as vigorously” into “were bought off.” Simth could beat that straw man all the way to the Emerald City. Moreover, ask why Smith didn’t tout this as a pet peeve when Marshall was actually putting out the extreme version of the theory.

    Karl (f07e38)

  3. Karl – The “were bought off” meme is just a toned down version of the same narrative, but the requirement that everybody participate for the plan to have a chance to work came from policy experts on both sides of the aisle. It was a recognition of reality rather than the creation of a bone to throw to the insurance industry.

    daleyrocks (bf33e9)

  4. its awlays been interesting that one of the stated reasons for the mandate was to reduce cost shifting from the insured back on the uninsured. But since the mandate forces young healthy individuals to purchase insurance that clearly exceeds their possible heath care needs they in fact would be paying more for insurance than they would ever use. Making young people pay more for insurance than they need to so that others can pay less … sounds like cost shifting to me …

    JeffC (488234)

  5. When the gov has you–an industry–by the shorts, it pays to get cozy with the DC worms.
    Would a stockholder suit that a CEO failed to bribe an important congresscritter, thus earning the firm the Gibson Guitar treatment, get anywhere?

    Richard Aubrey (a75643)

  6. So now that Kagan has leaked the preliminary vote, awaiting the circulation of argumentation, the Politburo enters full Pravda revisionism.

    How unexpected.

    gary gulrud (d88477)

  7. The health insurance industry doesn’t really want to insure your health. They want to administer a government program in which they do the admin and the taxpayers pay the bills. The Clinton bill banned private practice outside the exchanges. That meant no escape for doctors similar to the Canadian law when it was first implemented. That meant a mass exodus of Canadian doctors to the US. I know many of them. A “Shall issue” law without the mandate would be fatal for insurance companies which aren’t profitable anyway. The Canadians, socialist fools all, even closed medical and nursing schools thinking it would cut costs. It did, except for the big American medical centers that appeared in Spokane and Buffalo and Minnesota. Convenient for the Mayo Clinic, too.

    What I think will happen here is one of two things. If Obama is re-elected, there will be single payer and overt rationing. Doctors who try to exit the system will find their licenses are tied to Medicare, as Massachusetts is trying to do. If he loses, any real Medicare reform will require a lot more out of pocket payment and doctors will be happy to provide it with new products, like retainer plans.

    The Obama option will result in an exodus of specialists to the West Indies and Mexico if the crime problem is solved. Medical school applications will crater and PAs will provide primary care.

    I think, if Obama is defeated and the GOP takes the Senate, we will have a period of real reform like we did in the 90s, before the usual corruption recovers. Two years is about the best we can hope for. Will that be enough time?

    Mike K (326cba)

  8. Success has a million fathers,
    defeat is an orphan.

    There will be so many running away from ObamaCare, that the field will be a target-rich environment.

    AD-RtR/OS! (b8ab92)

  9. Karl – Just looking at Smith’s article and assumptions, there is intellectually dishonesty at every level.

    If you start at the progressive nirvana, government-sponsored universal health care, which they had no chance of achieving, it presumably would have required mandatory participation to offset the cost to the government, no different than ObamaCare. The financing could have been through taxes and individual contributions, but again, maximizing individual participation reduces the cost to the government, but also the reason for the use of the word universal.

    The goal under both ObamaCare and a universal plan was to cover everybody. Douthat just argues unartfully.

    daleyrocks (bf33e9)

  10. “If Obama is re-elected, there will be single payer and overt rationing.”

    I don’t see it. I see less money, fewer services and defaults all over.

    Congress will be in the hands of those who won’t take a risk on their own. Gridlock.

    We had the 7th warmest winter on records going back into the 1800s yet the first freezing precip in January the DOT tried to go without salt and we had people off the road everywhere, a few deaths.

    Next morning salters were out on straight time.

    The back and forth of failed government will be our savior.

    gary gulrud (d88477)

  11. Update and Ding!

    Karl (6f7ecd)

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