Why the potential defeat of the PPACA is a good thing

The Patient Protection and Affordable Care Act, known annoyingly as Obamacare, was given a serious constitutional vetting in the Supreme Court this past week. The constitutional objections point to the expansion of the Commerce Clause beyond the odious Gonzales v. Raich and Wickard v. Filburn rulings. That's not really a topic for this blog, but I will generally use any chance I can to talk about them. What I want to address in this blog post are reasons why the repeal of the PPACA should be cheered by both the right and the left and seen as an opportunity to create a much better law.

1) Employer-based healthcare. How anyone can be happy that this vestige of wage controls from WWII is still a main feature of American healthcare is beyond me. This is the primary distortion in our insurance market. It creates a ton of problems and has no sincere reason for its continued existence other than it is the status quo. No proposal from either party, to my knowledge, sought to address this problem after single-payer was taken off of the table. Democrats, with their belief in positive rights (including one to health care), hate the employer-based model because losing your healthcare with your job is a social justice issue. Republicans should see the government distortion in the health insurance market through regulations dating back 60 years and be driven mad by free-market wailing and gnashing of teeth. So, who kept it in there?

2) The individual mandate. The individual mandate is not a feature of this law, it is a cost control measure. Putting aside again the constitutional issues, the intended effects of the individual mandate are to punish people who do not buy insurance until they are sick (likely to be young and healthy) and to offset the increased cost of insuring people regardless of preexisting conditions. Like Obama said on the campaign trail, if mandates could fix social problems, we could eliminate homelessness by making not having a home illegal. An individual mandate would not be part of the perfect Democratic or Republican proposal (though Matt Zwolinski makes a philosophical case for it in "Is the Welfare State Justified"). A single-payer system covers everyone with no need for sanctions if a person does not carry insurance. Mandating that a person buy a certain product as a means of regulating it makes no sense in a free market system. Who actually likes this feature?

3) Insurance companies love this law. Remember the stakeholders when this law was being written? The insurance companies, Pharma, and the AMA. This legislation was passed with their input, assistance, and endorsement. How could you get any better for an industry than if the government mandates each American to buy your product? And further mandate that they buy the most expensive option that, regardless of need, covers absolutely everything? As we have seen most recently with SOPA, industry attempts to collude with government instead of innovating to increase their revenue. Centralizing power with and doling out money to the large insurance corporations are repugnant to both liberal and conservative sensibilities (though practiced by both with astonishing regularity). Why are those industries on the receiving end of these new regulations in support of reform instead of fighting tooth-and-nail against it?

4) We are better off without more federal involvement. Neither liberals or conservatives are going to agree on anything at the national level, and for good reason. Not every model works for each part of the country, each group of people, or each individual. Federal mandates means that the most important regulations and decisions are made far away from the people helping and the people being helped. They are also the most difficult to change for both ideological or practical reasons. Want victory for your proposed solution? There are states with excellent single-payer insurance like Vermont. Move it like right-to-work legislation--through the state legislatures. You can push your solution further if power is retained by the states.

5)It increases the cost of health care. Obamacare was sold as a cost-saving measure. This opinion is not shared by the OMB, CBO, or any serious policy organization. It was made up whole-cloth by the Department of Health and Human Services. By double-counting, the PPACA pretends to simultaneously cover the costs of other mandates and extend the Medicare trust fund (as reported by the OMB). The law does not include the yearly adjustment to Medicare reimbursement to doctors, which this year will top $276 billion and whose annual price tag will only increase for years to come (according to the CBO). Finally, the cost-savings measures and pilot programs built into Obamacare (according to the CBO) have not achieved their goals at all, and those programs that have helped are likely to be snuffed out by the health insurance industry. Dramatically driving up the cost of health insurance makes it more difficult to achieve the ultimate goal of universal coverage.

6)A personal reason. One of the mandates of the PPACA requires electronic documentation of all medical records. This presents an unfunded mandate to health care providers, including my company, who must now upgrade their software. For us, this means compliance with Department of Mental Health specifications. Our software upgrade included two things--a new, attractive visual interface and back-end changes so our program could talk to DMH. The actual acts of writing notes, looking at charts, and updating records became more time-consuming and frustrating as we are straddling between two iterations of the same software. The upgrade has taken money away from the organization, has stretched out over-deadline, and has no other purpose than to conform to this regulation. The upgrade surely was not for the benefit of the end-users.

I have always found it difficult to understand why people who favored health care reform actually liked this law. I understand that it was important to do something about these problems. But that do-something attitude got us a terrible piece of legislation. Just because it may be overturned on constitutional grounds does not mean that supporters should ignore the practical case against it. If the Supreme Court sides with the convincing (to me) constitutional objections to the PPACA, it will likely invalidate the entire law--giving Congress another opportunity to actually address the important problems with health care. People of all ideologies should be happy with that result.