Conservatives’ Failure of Imagination on Universal Coverage
Free markets have made millions of products affordable for all. They can do the same for health insurance.
American conservatives routinely express suspicion, if not outright opposition, to the goal of ensuring that every American can afford health coverage. But they’re wrong to do so.
In the March 22, 2017 episode of Uncommon Knowledge, the public affairs program produced by the Hoover Institution of Stanford University, I joined host Peter Robinson and Commentary’s John Podhoretz for a debate on the topic of health reform.
It was “never a conservative or Republican goal,” lamented Podhoretz, to achieve “universal coverage for health care in the United States.” That increasing numbers of Republicans have changed their minds about this, he said, represented “an essential social Democratic principle and…a huge concession.”
I countered: “If reforms [with] less spending, less taxes, and fewer regulations led to more people having health insurance, would that have been a defeat for conservatism?” When Podhoretz said “no,” I noted that conservatives have long argued that free markets lead to more affordable goods and services, and that they should apply that principle to health insurance:
This is the problem with the failure of imagination of conservatism. It’s that we’ve conflated a policy outcome, more people having health insurance, with the process by which we achieve that outcome. And the point I’m trying to make is that we conservatives, we have always known that less government leads to more abundance, more wealth, more prosperity. We would never say we need more government so that every American can have a smartphone. We would never say we need government so that every American can have a job and yet we’ve accepted the left wing narrative that the only way to make sure that more people have the economic security of health insurance is through more statism. Why do we accept that narrative in healthcare when we accept it nowhere else in the economy? And this has been the failure of imagination of conservatism.
Here is the transcript of that segment of the program (the full transcript can be found at the website of the Hoover Institution):
Peter Robinson: Writing about the American Healthcare Act in The New York Post, John Podhoretz. This is a question directed to you, John’s words. “Barack Obama and the Democrats may have lost the house in 2010, the senate in 2014, and the presidency in 2016, but they may be winning the most important argument they’ve ever made.” Before we get to your rebuttal, explain what you’re talking about there.
John Podhoretz: I think that the release of the American Healthcare Act, the Republican effort to start taking on Obamacare showed the way Republicans talked about it both positively and negatively, showed that a Rubicon may have been crossed since the passage of Obamacare in 2010. And the Rubicon is, a kind of common unspoken, almost unspoken acceptance of the idea that there should be universal coverage for healthcare in the United States. That was never a conservative or Republican goal. It’s not the right goal but in conceding it, or in seeming to accept it implicitly, not necessarily in the drafting of this law but in the way congressman went on TV to talk about the law and to defend it or attack it. That concession means that in the largest picture, Obama might have won the larger argument about where healthcare is going in the United States. Which is to say if Republicans cannot defend the idea that what is important is the freedom of the individual to make choices about how to live his life as opposed to the notion that we are all in this together and must all participate in healthcare to ballast each other’s healthcare outcomes. Then we have accepted an essential social Democratic principle and that’s a huge concession.
Peter Robinson: Barack Obama argued that it is the responsibility of the government to provide every American with healthcare. And the American Healthcare Act, the Republican proposal to replace Obamacare ratifies that decision and everything else is details. Avik.
Avik Roy: So what John just articulated is the conventional conservative view, that universal coverage is a great defeat for conservatism and a victory for progressivism. I take a different view—
Peter Robinson: Avik, can I just say that’s the first time I’ve ever heard John called a conventional conservative. But go ahead.
Avik Roy: I think he would agree that, that’s a conventional conservative view. I think that conventional view is wrong and represents a failure of imagination of conservatism. I know Peter that you keep Friedrich Hayek close to your heart? I do as well actually quite literally because here on my iPhone I’ve got The Constitution of Liberty and The Road to Serfdom on my Kindle app. And if you read The Constitution of Liberty or The Road to Serfdom, you’ll see that Friedrich Hayek actually supported universal coverage. He actually talked about how in wealthy societies like he was referring to post-war Britain at the time, there is actually an affirmative case to be made that the economic security that comes from basic health insurance for everyone is actually a worthy goal. And if it’s done in a market-oriented way it can actually be done with very low cost, but a great deal of economic security and adequate healthcare leads to a better society. So he supported universal coverage. In fact, the United States doesn’t have a free market healthcare system, didn’t before Obamacare. The thing that we’ve done, and this has not raised the hackles so much of conservatives, is we heavily subsidize healthcare for the wealthy through the tax break for employer based coverage, which is regressive tax break that helps the upper middle class. You and I, Peter and John, we pay taxes so that Mitt Romney and Warren Buffet and Hillary Clinton can get government subsidized healthcare called Medicare. You don’t see Rand Paul and Ted Cruz raising a lot of objections to that. Instead, they’re raising objections to health insurance for low income uninsured people and I wish we in the Conservative movement would say “You know what”—
Peter Robinson: Hold on let me get one point very explicitly here. You’re granting John’s argument. You’re saying yes, yes, yes, it’s over. Everybody now agrees that it’s the responsibility of the government to provide universal health care but that’s not such a bad thing. But you are granting the premise aren’t you?
Avik Roy: I wrote a cover story for The Washington Examiner a few years ago called “The Conservative Case for Universal Coverage” and my argument was—and this is based on data—we could spend one seventh of what we spend on healthcare in America in terms of government spending, in terms of overall public and private health spending and cover everybody in this country or provide the right kind of safety net that provides a level of financial assistance that lower income people really need, if we just stop subsidizing health insurance for upper income people. If we just did that, we’d spend a fraction what we spend. We wouldn’t have a budget deficit. We wouldn’t have an entitlement crisis. We’ve done it all wrong. The reason why all these problems exist is because we’ve spent all of our resources subsidizing health insurance for upper income people.
Peter Robinson: I’m going to ask this question one more time. I’m not even disagreeing with anything you say but I just want to get to the premise here. So I think John will argue—John is more than capable of amending or correcting my statement of his position—but John would argue, that Obamacare changed the relationship of the state to the citizen in a fundamental way.
Avik Roy: And I would totally disagree with that.
Peter Robinson: Let me state it though. Never before had the federal government claimed the right to use its coercive powers to force citizens to do something just because they were breathing. And you are saying—
Avik Roy: I agree that the individual mandate was a constitutional injury and I totally disagree with the Supreme Court decision by John Roberts—
Peter Robinson: There is no route to universal healthcare absent coercion; is that not correct?
John Podhoretz: I would actually argue that Avik is right and that sure there’s—
Peter Robinson: I’m trying to stick up for you and you’re kicking me out at knees here, John.
John Podhoretz: But there is a way. There is way and the way is single payer health insurance. Government provided health insurance and the creation of a government system of healthcare in which largely speaking, the medical profession works for the government and supplies its services to the individual.
Peter Robinson: Canadian system, National Health Service in Britain, it exists.
John Podhoretz: Pretty much. By the way it’s constitutionally sound. It’s something that would be passed by legislation. There’s no constitutional issue with single payer it’s just that its inimical as I understand it. It’s inimical, the nationalization of the health care system. It’s inimical to the American political experiment but I think that this is where we’re going inevitably and part…Let me just follow up on this in this sense, which is Avik is absolutely right that the original sin of our healthcare system was the decision to create the employer tax break in 1946. Just as you could say that the original sin of our real estate market was the decision to make deductibility of home mortgages. Which again is a regressive break that helps the richer you are the larger a mortgage you get, the better a break you get from the government. The problem we have is that this is where we are. If would could go back in time and start from zero and redesign from the ground up we know all these things about the moral hazards of using the tax system in this terrible way. But we can’t so we have to build from where we are. And that’s part of the American Healthcare Act obviously is that Paul Ryan, and the president, and Tom Price, the health, and human service secretary looked at this and said “What can we do that is practicable in 2017? What adjustments can we make that can get through the senate with 51 votes instead of 60? What can we do here and there?” Because that’s the reality that they face. But I think in overarching terms, if we are looking at this and saying “What must be satisfied is that American’s get healthcare.” We get to Avik’s point and the only way we get there eventually is not through the ways that he would want it. It’s through single payer.
Avik Roy: Okay, I would like to respond by asking you, John, a hypothetical question. And it’s a very hypothetical question.
John Podhoretz: Yeah.
Avik Roy: Let’s say in 2010, hypothetically, we passed a law that reduced federal spending by 10 trillion dollars over three decades. Reduce taxes by two trillion dollars over three decades. Had no individual mandate but ended up resulting in 20 million more people having health insurance because health insurance premiums went down by 25%. This is, admittedly, a hypothetical scenario. But if that combination reforms less spending, less taxes, fewer regulations, led to more people having health insurance, would that have been a defeat for conservatism?
John Podhoretz: No, but you’re missing—but—
Avik Roy: So I’m glad you said that because this is the problem with the failure of imagination of conservatism. It’s that we’ve conflated a policy outcome, more people having health insurance, with the process by which we achieve that outcome. And the point I’m trying to make is that we conservatives, we have always known that less government leads to more abundance, more wealth, more prosperity. We would never say we need more government so that every American can have a smartphone. We would never say we need government so that every American can have a job and yet we’ve accepted the left wing narrative that the only way to make sure that more people have the economic security of health insurance is through more statism. Why do we accept that narrative in healthcare when we accept it nowhere else in the economy? And this has been the failure of imagination of conservatism.
Peter Robinson: Hold on. Again a simple question. So here’s the simple question. You believe then that if American Health Care Act, the Republican replacement for Obamacare, is enacted largely as it being talked about as we sit here today, that will lead to an increase in liberty?
Avik Roy: No, I’m not saying that. I’m not saying the American Healthcare Act is the hypothetical example. I’m saying that there are policies. So my think tank, the Foundation for Research on Equal Opportunity, has published a proposal that is called Transcending Obamacare you can download through our website that, actually, based on our estimates—which are of course estimates—would do exactly what I described. They would deregulate the insurance market, reduce federal spending, reduce federal taxes, but increase the number of people with health insurance because we dedicate our scarce resources to the people who need the help and not to the people who don’t need the help.
Peter Robinson: So the two of you, as best I can tell, agree on the conservative principle that the government ought not to use coercion to achieve universal healthcare. You’re suspicious that we can survive that there’s any way of acting on that. You disagree by saying “No, no there are ways we can increase liberty and healthcare at the same time.” Right?
Avik Roy: Exactly.
Uncommon Knowledge © 2017 by the Board of Trustees of Leland Stanford Junior University.
