In recent weeks, President Barack Obama has been appropriately raked over the coals for saying, multiple times, “If you like your health care plan, you’ll be able to keep it.” He shouldn’t have said it. The problem is, he shouldn’t have said it for entirely different reasons than most Americans think.
Let’s begin with a basic question: What does it mean to “like” one’s plan? And what is the value of this statement? All of this came to a head at an October 30 Congressional hearing with the Secretary of the Department of Health and Human Services, Kathleen Sebelius.
At the hearing, in a cantankerous challenge to Sebelius’s credibility, Tennessee Rep. Marsha Blackburn highlighted two constituents, Mark and Lucinda, who “like their plans,” but were being told they could not keep them because of the Patient Protection and Affordable Care Act (ACA), so-called “Obamacare.” A long-entrenched individualist rhetoric provided the framework for Blackburn’s point, namely that we should allow Mark and Lucinda to keep their plans in the name of individual freedom, just because they “like” them.
For purposes of argument, let’s assume that what Mark and Lucinda’s insurers are saying—that the cancellations are a result of the ACA—is true. But, as we do this, let’s also keep in mind that just because insurers claim premium hikes and cancellations are because of the ACA doesn’t mean that it’s true. In fact, it seems to be true only rarely and, even then, often as a half-truth.
But, anyway, let’s assume it is true. The question then becomes: why is it true? The problem is that this individual freedom is made possible by the assurances of a social safety net. This brings us back to the existential foundation of the ACA, namely that the choice to not carry health insurance—or to carry poor health insurance that individuals may find out, at some point, doesn’t cover something important—simply dumps those individuals into social institutions such as emergency rooms and local care centers, and does so in an extremely wasteful way. This returns us to the problem we started with and a question of whether or not ACA opponents are concerned with solving the problem of building a sustainable health care system.
In other words, Blackburn’s logic, as inspirational as it might be to some, bathed as it is in the rhetoric of freedom, is not premised on an analysis or understanding of health insurance, but deference to Mark and Lucinda to make their own choices, consequences be damned.
Two points need to be made in this regard. The first is that the very logic of health insurance is that customers (who will become patients) do not know what their needs will be. There is imperfect, asymmetrical knowledge on health markets, as health economists have long recognized (Kenneth Arrow wrote the classic health economics statement of this argument in 1963 while George Akerlof, Michael Spence, and Joseph Stiglitz won a Nobel Prize in Economics for hashing out the more complete theory).
Mark and Lucinda’s happiness with their plans is premised on fleeting and incomplete knowledge. They are not seers. Whether or not one “likes” one’s substandard health plan is therefore of little use. The purpose of the ACA’s essential health benefits requirements—the source of the restructuring of American health insurance plans and a key reason why some plans have to go—is that they are based on experience of the health needs of a broader population. They are the outcome of evidence-based considerations, grounded in clinical expertise and data, not just about what Mark and Lucinda need (or think they need) now, but what they are likely to need in the future. In this light, a key question is this: will they “like” their plans when they find out? Either way, “liking” one’s health insurance plan is not rhetoric that we would be wise to take (at least too) seriously. It would be foolish to mold our policy around it.
A second important point is this: If ever there was a need for a bit of paternalism, some regulation on the front end, it is health insurance. Unless, of course, one is willing to go the path carved out by Rep. Ron Paul, who noted in a much-discussed moment at a 2011 Republican presidential primary debate that, “Freedom is all about taking your own risks.” Paul’s protestations of freedom aside, risk pooling is all about minimizing risk when it comes to something as high stakes and socially consequential as access to medical care. Happily for the ideal of a social contract, a majority of Americans have rejected the idea that we will simply “let people die,” which Paul’s audience that night seemed to sanction. Luckily, these people do not tend to make policy, at least not yet.
Let’s connect the dots more directly: for years large numbers of Americans have been unable to keep plans just because they “like” them. The ACA did not invent this phenomenon. As Timothy Jost has noted, in fact, that it is quite the opposite, as the ACA is “quite specific” in asserting that “Nothing in this Act . . . shall be construed to require that an individual terminate coverage . . . in which such individual was enrolled on the date of enactment of this Act.” The public, moreover, would be surprised to learn that this promise has been kept since the ACA is not responsible for the canceled plans, at least not in a direct way. Perhaps out of naïveté, Obama assumed that insurers would start to phase in the ACA’s essential benefits packages rather than bring new customers onto new plans that didn’t pass muster and wouldn’t be phased in under the new rules. For political reasons, Obama took responsibility, but he shouldn’t have.
Instead, insurers kept selling plans that they knew did not qualify and would not be grandfathered in. These are new plans established after the passage of the ACA. While some pro-ACA commentators have been fast to make this point, the seriousness of these unethical actions on the part of insurance companies seem to have fallen on deaf ears. Even worse, they seem to have “forgotten” to notify their customers of this important fact, leaving them to find out only at the end of 2013. Accordingly, to watch Fox News and to see the Democrats’ capitulation to the “like your plan, keep your plan” meme is to enter into a bizarre world in which it is the ACA—and not health care insurers—that introduced volatility into American health care.
In the pre-ACA years, however, insurers would regularly cancel plans, raise premiums, and increase customer responsibilities in cost-sharing arrangements. State insurance regulators served as a drag on these practices, but they could never contain them. The political story here, then, is that the ACA provided fantastic cover for already established practices. Predictably, and cynically, insurers and their anti-ACA confederates have exploited the ability to blame the maladies of private health care on the ACA, even when doing so stretch the bounds of credulity.
It is easy to understand why not taking what customers “like” too seriously would be politically controversial. As the pro-choice movement has long known, the rhetoric of unbridled choice is powerful. And, of course, who doesn’t like spending the least amount possible? (A major problem, of course, is that as a society we spend more than other nations and get much less in return in measurable health outcomes. But the politics of the ACA tend to play out on the level of the individual, so the “social question” is rarely posed.) But suppose in spending the least amount individuals become dependent upon a system that eventually they find, at some unforeseen point, to exclude something they really need. The ACA insists upon evidence-based benefits, not a laundry list of wants or likes. Obama showed grit in taking on his own constituencies—especially unions—and insisting that the wastefulness of those plans—so called “Cadillac” plans—be addressed. More care is not better care, and may sometimes lead to worse outcomes.
Similarly, insufficient care shifts costs to society. As everybody from the Heritage Foundation to former Massachusetts Governor Mitt Romney to supporters of the ACA have noted, is that at that moment the problem becomes social. In other words—and here’s a juicy ideological inconsistency—the failure to go the route of the ACA encourages free-riding. Where are the conservatives crying foul over a system that encourages free-riding and even moral hazard? Isn’t moral hazard a close relative of simply responding to the preferences—the likes and dislikes—of individuals? The ACA is trying—even if in a non-ideal way—to balance all of this out.
Again: some plans do have to go. Allowing Americans to pay for substandard plans is not a responsible policy option. But the trickier cases are those in which insureds say their plans are equal to or better than the ACA-sanctioned ones but are being canceled anyway, or are experiencing skyrocketing premiums. There are only two possible reasons for these situations, both the responsibility of health insurance companies: either they established them after the ACA was passed, knowing full-well that they would not be grandfathered in, or they are canceling them and raising rates because they can use the ACA as a smokescreen. Either way, the reason why so many Americans cannot keep these plans—even if they “like” them—has nothing to do with President Obama’s promise. It is a symptom of the state of American political culture that the health insurance industry has made it out of this process unscathed and even bestowed with a renewed moral force.
Commentators have noted the fact that only a comparatively small percentage of Americans are substantively impacted by these cancellations. But these still number in millions. Nonetheless, there is a critical question here of who, exactly, should be responsible for rectifying the situation. In a more optimal political environment, we would start by establishing a commission to investigate the health insurance companies themselves.
This only highlights the importance of establishing effective oversight on the side of consumers, perhaps along the lines of the newly minted Consumer Financial Protection Bureau, established to watch the banking industry. This shouldn’t be controversial: the ACA is, indeed, a boon for American health providers and the various businesses that stand to gain from expanded consumer base. The health care industry should welcome a chance to prove that they are and will be good faith actors, especially considering the benefits they are likely to reap. As I’ve noted, however, one major curiosity of contemporary health care discourse is the absence of any sustained criticism or scrutiny of health care providers—especially by the ACA’s critics.
But this important work shouldn’t take us off the trail of the “like it, keep it” meme. The way the media has behaved in the wake of public perceptions that Obama lied in making his promise says much about the quality of our political discourse and very little about the ACA itself. If we are to move forward seriously with the important work of ensuring that all Americans have access to affordable, quality health care, we will need a more pointed discussion about the nature of health policy. If we are going to use social policy to empower private companies, then we must scrutinize their behaviors. Whether we have this kind of vigilance in us is a major question. What is clear, however, is that the childish discourse of “liking” something—so common in the age of Facebook—is simply not helpful.
Daniel Skinner, Ph.D is a professor of health policy at Ohio University’s Heritage College of Osteopathic Medicine, Dublin, OH. You can follow him on Twitter at @danielrskinner or email him at email@example.com.