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Posted at 11:10 AM ET, 01/ 9/2011

Now ObamaCare debate moves to the real world

By Jennifer Rubin

In writing on the real problems with ObamaCare and the prospect for repeal, Ezra Klein deserves credit on several points.

First, although he briefly delves back into a defense of CBO calculations, he then turns, as many of us have, to considering how ObamaCare works in the real world. The Holy Grail of CBO accounting only gets you so far. As he puts it, the "more persuasive critique" of ObamaCare focuses on "some bad signs for the bill going forward." That is a huge concession, but a smart one since the Republicans will spend the next two years revealing and explaining the load of unintended consequences.

As an aside, the CBO's details, which make clear that repealing ObamaCare entails eliminating $540 billion in government spending and $770 billion in taxes, not including the "doc fix" and corrections for accounting gimmickry, is going to play right in the Republicans' assault on the Democrats as the tax-and-spend party. Yuval Levin explains:

Obviously it would be best to reduce spending by an even greater amount than we reduce taxes over the next decade--and of course the Republican House is proposing to do just that through its cuts in discretionary spending, and hopefully will also do so through entitlement reform. But the notion that a massive tax increase and a massive spending increase are the way to reduce the deficit hardly seems like the message the Democrats should want to be pushing just now. If they want to spend their time informing Americans that the Republican repeal bill is a huge tax cut and a huge spending cut, it seems to me Republicans ought to welcome that.

In short, Democrats probably want to stay away from the numbers argument, especially as CBO is asked to review Republican plans with far more modest outlays.

Second, Ezra concedes the bill is unpopular. ("We can argue about why it's unpopular, or what the unpopularity means. But for the moment, let's just grant the point.") That doesn't seem to be a big deal for conservatives, who have been pointing this out for two years, but it's a rather stark turn-around for liberals. They tried to convince House Democrats it would be popular and the key to their electoral survival. They told the media and voters that once Obama really explained the bill, it would be embraced. All of that was wrong. Ezra doesn't delve into why it is so unpopular -- but the massive cost, the huge tax hikes, the disruption of existing insurance arrangements and the requirement to buy insurance you don't want are part of the answer. As the House Republicans explore all that in hearings, the legislation is likely to become even more unpopular.

Third, Ezra concedes the bill has real flaws. And he correctly recognizes that Republicans are not about to fix a bill they find fundamentally flawed. Think about that: the historic legislation that Obama said would be the last word on the subject ("I am not the first President to take up this cause, but I am determined to be the last") is politically toxic. Now reality has set in that Republicans aren't about to dump their longstanding objections to the fundamental design of the bill and fix it.

Fourth, Ezra's argument is a heads up to those who would welcome the invalidation of the individual mandate. He's telling them: don't expect the GOP to fix that one. You think they will throw in the towel and pass a public option? Uh... no.

Brooks wrote in opposition to ObamaCare in December 2009:

If this bill passes, you'll have 500 experts in Washington trying to hold down costs and 300 million Americans with the same old incentives to get more and more care. The Congressional Budget Office and most of the experts I talk to (including many who support the bill) do not believe it will seriously bend the cost curve. . . . The basic political deal was, we get to have dessert (expanding coverage) but we have to eat our spinach (cost control), too. If we eat dessert now, we'll never come back to the spinach.

So what's my verdict? I have to confess, I flip-flop week to week and day to day. It's a guess. Does this put us on a path toward the real reform, or does it head us down a valley in which real reform will be less likely?

If I were a senator forced to vote today, I'd vote no. If you pass a health care bill without systemic incentives reform, you set up a political vortex in which the few good parts of the bill will get stripped out and the expensive and wasteful parts will be entrenched.

If you pass a health care bill without systemic incentives reform, you set up a political vortex in which the few good parts of the bill will get stripped out and the expensive and wasteful parts will be entrenched.

Defenders say we can't do real reform because the politics won't allow it. The truth is the reverse. Unless you get the fundamental incentives right, the politics will be terrible forever and ever.

We are now seeing that played out, precisely as Brooks predicted. So, as Ezra observes, now is the time for both sides to move from the theoretical to the actual. If the bill is vastly more expensive than advertised, causes great upset to consumers and negatively impacts care, shouldn't we repeal and replace it? Levin wrote in April, 2010:

Conservatives opposed this scheme because they believed a public insurer could not introduce efficiencies that would lower prices without brutal rationing of services. Liberals supported it because they thought a public insurer would be fairer and more effective.

But in order to gain 60 votes in the Senate last winter, the Democrats were forced to give up on that public insurer, while leaving the other components of their scheme in place. The result is not even a liberal approach to escalating costs but a ticking time bomb: a scheme that will build up pressure in our private insurance system while offering no escape. Rather than reform a system that everyone agrees is unsustainable, it will subsidize that system and compel participation in it--requiring all Americans to pay ever-growing premiums to insurance companies while doing essentially nothing about the underlying causes of those rising costs. . . .

Indeed, many conservatives, for all their justified opposition to a government takeover of health care, have not yet quite seen the full extent to which this bill will exacerbate the cost problem. It is designed to push people into a system that will not exist--a health care bridge to nowhere--and so will cause premiums to rise and encourage significant dislocation and then will initiate a program of subsidies whose only real answer to the mounting costs of coverage will be to pay them with public dollars and so increase them further. It aims to spend a trillion dollars on subsidies to large insurance companies and the expansion of Medicaid, to micromanage the insurance industry in ways likely only to raise premiums further, to cut Medicare benefits without using the money to shore up the program or reduce the deficit, and to raise taxes on employment, investment, and medical research. . . .

Of course, this scenario--for all the dark prospects it lays out--assumes things will go more or less as planned. CBO is required to assume as much. But in a program so complex and enormous, which seeks to take control of a sixth of our economy but is profoundly incoherent even in its own terms, things will surely not always go as planned. The Medicare cuts so essential to funding the new entitlement, for instance, are unlikely to occur. Congress has shown itself thoroughly unwilling to impose such cuts in the past, and if it fails to follow through on them in this case, Obamacare will add hundreds of billions of additional dollars to the deficit. By the 2012 election, we will have certainly begun to see whether the program's proposed funding mechanism is a total sham, or is so unpopular as to make Obamacare toxic with seniors. Neither option bodes well for the program's future.

We're now going to see all that ObamaCare, as designed, entails. The problem is not in the particulars but in the concept, which Brooks and Yuval warned us was fundamentally flawed. It's not fixable. And so it must be repealed and replaced.

By Jennifer Rubin  | January 9, 2011; 11:10 AM ET
Categories:  Obamacare  
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It is disingenuous how some use the CBO as cover. Let's say that I submit my personal household budget to the CBO, and one of the assumptions that I present is that I expect to win the lottery. From what I understand, the CBO has to calculate an assessment of my budget based upon my assumptions, as they aren't equipped - nor is it their job - to pick apart my assumptions.

Posted by: coffeetime | January 9, 2011 1:09 PM | Report abuse

Note to US citizens:

1. Equal healthcare for constituents as for members of Congress (and staff) is freedom/justice/liberty.
2. Employer based insurance is not working if the goal is to create jobs.
3. A US Constitutional amendment is in order.
4. ……..

Posted by: OutOfState | January 9, 2011 3:19 PM | Report abuse

Thanks, J-Ru, for being nice to Ezra the (too often?) partisan Leftist. I don't read him much, so it's not clear if he's being more honest and helpful with you around, but a public argument between you and him thru WaPo blog posts/ articles might make WaPo far more relevant and read than any other paper.

I'm always disappointed at how little the supply of doctors, controlled by limited Med Schools by the (too rich) AMA, is discussed. The way a market works, like for lawyers, is that as wages go up, more folks go the law school. Now, of course, there are too many lawyers for the number of lawsuits (a number already too large) -- but that keeps salaries lower and law costs per user lower.

Where is a graph showing how many Med School graduates there have been in the last 20 (40?) years? That's the biggest reason health costs are too high; too few US doctors.

Posted by: TomGrey2 | January 9, 2011 3:44 PM | Report abuse

Before: 8-12 head colds/year, 2-3 days each
Then, 500 mg Vitamin C/day (cost $20/yr)
After: 8-12 head colds/decade, 1 day each

Pauling was right! Lots of health care cost savings right there...

Posted by: aardunza | January 9, 2011 4:33 PM | Report abuse

Again more rhetoric about what the Republicans are going to reveal in the next two years but still no revelation. Oh and how great that plan will be when revealed. Well what is the mystery? It would be a piece of cake to repeal any legislation if a better policy were presented first. Bottom line is the Republicans have no serious replacement. Repeal would be a budget buster because after repeal the popular items such as closing the Part D donut hole would be done with no increase in revenue. The Republican continually eat dessert first (big tax cuts etc) and never deliver anything else. Look at their record. It is tax cut and spend, spend, spend.

Posted by: chucko2 | January 9, 2011 8:48 PM | Report abuse

The health care law as designed is toxic to Democrats, and as this becomes more widely understood among them look for an initiative from Obama approaching the Republicans to fix/amend it. If he's very astute he will attempt it before 2012 and even if it becomes something more market friendly than the left can tolerate it will greatly boost his reelection chances.

If he waits until after the election (and he squeaks through (more likely now with the House checking his and the Dems worst instincts)) he will have to give up much more because he will be negotiating with a bigger majority in the House and a Republican controlled Senate.

Republicans should of course gut the thing thru and thru replacing it with something that actually delivers.

Posted by: Otiose1 | January 9, 2011 9:46 PM | Report abuse

It is easy to forget that the Democratic health care plan was approved because the lack of a plan was obviously going to bankrupt individuals. (The highest cause of bankruptcy was medical emergencies.) The Republicans had come up with nothing. Despite 8 years of a Republican president. Funny... while Obamacare was going through the legislative process, the Republicans did come up with something... which the Democrats ignored; my point is that the Republicans obviously had suddenly realized that the status quo was unsustainable. Shall we go back to the status quo ante? Not a good idea...

Posted by: michael_chaplan | January 9, 2011 10:59 PM | Report abuse

If one can focus on the idea tht spending is both good and bad and we have sent our Representatives to Washington to learn which is which - we cans see that cutting or adding spending "in general" is stupid. Professional economists say that we need to spend more than we take in when the economy needs it and spend less when it does not .

That is the truth.

Balanced budgets all the time are not good.

Smart spending is the way to go.

And that also means getting the most we can for every health care dollar.

The President's law is a good way to start that process.

And to attain the goal of smart spending supervised by informed Representatives.

Posted by: GaryEMasters | January 10, 2011 7:05 AM | Report abuse

So you presume to win the lottery? Fine. We just put a hold on the expenditures until the lottery money arrives.

Is the check in the mail?

I hope so.

Or you do not spend a dime.

There are ways to take care of presumptions. We just need to use them and not lie about health care reform.

Posted by: GaryEMasters | January 10, 2011 7:08 AM | Report abuse

"And so it must be repealed and replaced."

How about replacing it with freedom!! Small group control and decision making for 300 million is inherently flawed.

We need a few laws setting up a structure for freedom to work. No, it won't be utopia - but you're not going to get that out of congress anyway

Posted by: tom3433 | January 10, 2011 8:19 AM | Report abuse

Liberals bemoan that there is no 'single payer' or 'public option'. With government controlling the rules and regulations, all private insurers soon go out of business and effectively you soon get your beloved single payer. Unfortunately, liberals have no idea what insurance is. If you were an insurer, would you insure a burning house? Of course not. So it is ridiculous the emphasis liberals put on insuring 'pre-existing' conditions. No company should be forced to insure that. It stands the definition of insurance on its head. The circular liberal reasoning goes, well then companies need to insure more people to pay for that, so we'll need to force everyone to buy it even if they don't want it since otherwise people will wait until they do have a condition, thus we need rate controls and medical price control, etc. Take away the linchpin of insuring pre-existing conditions, and you avoid rationing and destruction of freedom and free enterprise and US bankruptcy.

The best reform is the simplest. With no need for 2000 pages and 20,000 regulations, 20K new bureaucrats and $3 trillion tax dollars, my plan is: 1) reduce the 7.5% threshold on Schedule A medical deductions to 1%. 2) Tort reform. 3)Allow insurance to be purchased across state lines. In a few words I've done more for health care reform that a year of lawmaking.

So under Obamacare do taxpayers fund medical marijuana?

Posted by: mrego | January 10, 2011 9:21 AM | Report abuse

Thanks, J-Ru,
Loved your work at Contentions, and so nice to see some balance at the WaPo. I canceled the print subscription because of the leftward tilt. I'll never re-subscribe, but it's nice to see a voice like yours to represent a balanced view.
Herndon, VA

Posted by: randall_carter | January 10, 2011 10:18 AM | Report abuse

>>> The highest cause of bankruptcy was medical emergencies

This is a myth. Only 3% to 5% of bankruptcies have anything to do with medical costs, let alone be the sole cause.

Posted by: TheMSMControlsUs | January 10, 2011 2:25 PM | Report abuse

If Ezra "The Perpetual Liberal Optimist" Klein is souring on PPACA the death spiral has officially begun. Unfortunately Barry has invested so much political capital into it that he is almost obligated to go down with the ship and his second term along with it.

Posted by: cunn9305 | January 10, 2011 8:26 PM | Report abuse

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