As you may have heard, Trumpcare—the efforts to repeal and replace the Affordable Care Act—appears to be dead. Jonathan Chait attributes the reason to the Republican party and conservatism as a movement because it is incapable of governing and meeting basic public needs. As he writes:
The collapse of the Republican plan to repeal and replace Obamacare is an especially vivid demonstration of the broader problem. The cohesion Republicans possessed in opposition disintegrated once they had power, because their ideology left them unable to pass legislation that was not cruel, horrific, and repugnant to their own constituents.
Frankly, I couldn’t agree more. Back in May, I wrote that the Republican Party is incapable of governing because their ideology is incompatible with government playing any role in most aspects of public life. In other words, they can’t govern because they basically want to abolish government. However, the reality is that government intervention is necessary when the market fails to provide necessary services. For most of the twentieth century, the government has generally balanced private industry and public intervention on the grounds of the “public good,” using a formula that looks something like this:
- Allow the market to operate freely and provide whatever it is we need.
- Identify areas where market failures do not provide for the public good.
- Devote government resources to provide those necessary services.
We’ve done this with labor protections, the environment, civil rights, education, and, in expensive localities, with rent control. But we haven’t done this with healthcare, and that’s why we’re in this mess.
Market-based healthcare is a failure because healthcare providers charge as much as they want and because patients have no idea or control over what those costs are. Insurance providers and government health plans can only negotiate with the providers in an opaque system that keeps costs high for everyone. This is even more true for those who aren’t covered by a group insurance plan, such as those provided by an employer, or by a government health program, such as Medicaid or Medicare.
What is necessary to truly reform healthcare is universal regulation over rates for health services. The free market has failed to control costs, and that’s the real reason why health insurance premiums are higher every year. There’s nothing to control those underlying costs. The Republican Party line—that “Obamacare is a failure”—is true because it didn’t address the cost of health services: it only made it so that health insurance cover more people that couldn’t afford it before, including the poor and patients with preexisting conditions. The Affordable Care Act can’t keep premiums low because it is an attempt to reform from the supply side. Its aim is to give health insurance companies more customers so they could spread healthcare costs over a bigger pool of patients. But what we truly need is a demand-side reform. Regulate the health services markets, standardize the rates, freeze their costs, and reward providers who implement efficiency measures to provide better health services at a lower price. In essence, this is what single-payer healthcare does, but this is not the only possible solution.
Government reform of the health services market would do what we need most in the US healthcare system: cover everyone and keep health insurance premiums down. But doing this requires Congressional leaders to put on their big-kid pants and to actually govern, and we see what happens when we let try to do that.