Wednesday, November 27, 2013

Redistribution, Yes!

Ida May Fuller, the first Social Security recipient

The present skirmish in the Obamacare wars concerns whether those in the individual healthcare insurance market will be able to keep their existing plans.  Most people get their health insurance through their employer or through the federal government (i.e. Medicare or Medicaid), but 9% buy it as individuals directly from insurance companies.  As Obamacare swings into operation it’s causing many of those individuals – it’s hard to say exactly how many – to lose their plans, forcing them onto more expensive plans.  It seems unfair, and it’s proving to be a political disaster for the president, especially considering his repeated promises that this would never happen. Throw in the ongoing fiasco of the federal government’s insurance exchange website and not only does Obamacare begin to seem fundamentally flawed, but – as some kind conservatives have helpfully suggested – so does liberalism itself.

Hardly.  As the indispensible Jonathan Chait has explained in numerous clarifying pieces, if you wish to make sure that (nearly) everyone has adequate health insurance then there must be some mechanism for making the young, healthy and affluent help pay for the old, sick and poor.  For example, Obamacare forces insurance companies to cover people in the individual market with pre-existing medical conditions, most of whom have been denied coverage or forced to pay exorbitant premiums.  How is that additional coverage paid for?  Partly it comes from subsidies to poorer individuals from Medicaid, which is, of course, funded by taxpayers.  But Obamacare also raises the regulatory standards of health insurance plans with the specific intent of forcing healthy individuals to pay for better plans so that insurers can provide care for more expensive patients.  (It also does so to protect consumers from unreliable plans, like those with lifetime caps and serious lapses in coverage.)

But all this is true of employer-based health insurance as well; i.e. it forces those who need health care less to pay for those who need it more (subsidized by taxpayers).  Such plans usually have a set price, regardless of age, sex or medical status, thus allowing a large group of people to pay for the small number which will actually need expensive care.  Such risk-pooling is the basis of all health insurance – indeed, of all insurance.  Obamacare, as Ezra Klein says, “basically makes the individual market more like the group markets.”  That is, it makes it more redistributive.  Yes, redistribution rests at the heart of any insurance system, public or private.  And we’re all willing to contribute to those systems because the future is uncertain; even the best actuarial tables cannot predict with any certainty who will need the benefit of insurance.  We buy fire insurance even though, as Chait so eloquently puts it, “fire insurance is a bad deal for people whose houses don’t burn.”

But let’s take that one step further: Redistribution rests at the heart of all liberalism.  This is liberalism’s open secret, and one’s view of this principle makes or breaks one’s support for the entire liberal welfare project.  Every worker pays Medicare taxes, but Medicare only supports those over 65.  Medicaid only covers those below a specified financial threshold.  Even Social Security provides slightly higher benefits to lower wage workers (relative to their lifetime income).  For political reasons liberals generally attempt to disguise the redistributive aspects of their programs; for example, Social Security taxes are paid into individual accounts.  But to modern liberalism a secure retirement is an individual and social good that humanitarianism simply and firmly demands.  Could we consider ourselves a just society if there were people who had worked their whole lives who were forced to retire in destitution?  It was exactly destitution to which all too many workers were consigned by pre-welfare-state laissez-faire capitalism.  Relative poverty causes so much harm, we should feel ashamed if it denied people the requisites of even a modestly fulfilling life: nourishment, education, decent housing, a secure retirement and medical care.  And if those with less can’t pay for those minimal goods, then – as long as it’s practical and sustainable – those with more must foot the bill.  This is the essence of modern welfare state liberalism: Taxing the affluent at higher rates and spending that money on insuring that working and poor people posses the minimal requirements of civilized life.  (This is the crucial distinction between welfare liberalism and socialism, which advocates the equalization of most or all social goods; liberalism merely advocates minimal standards and for a much shorter list of goods.)  Redistribution is part of the rationale even for infrastructure and public institutions, such as roads, bridges, hospitals, universities, crime control, emergency management.  Such things are generally regarded as benefitting everyone, but they’re partially funded through progressive taxes, and there are such things as private highways, private police, etc.

Since conservatives generally equate what you deserve with what capitalism allocates to you, they consider any non-capitalist redistribution to be inherently unjust.  Pragmatic conservatives – quite a rare species! – may tolerate a very short list of public goods and social insurance programs, but only for the sake of market efficiency or social comity.  But, as conservatives, they would never concede that anyone has a moral claim on some good for which he could not pay, such as a poor person who cannot afford a college education.  But if you accept that there are some goods for which everyone should be forced to pay, even those who will never directly benefit from those goods, then you have accepted the rationale for the welfare state.  All that’s left at that point is to argue over which goods should be on the list.  Should we have public healthcare but not public housing?  Should we have food stamps but not public day care?  We have moved from the realm of moral justification to that of policy detail.  To be sure, the devil is in the details; even liberals like Ezra Klein dislike Obamacare’s employer mandate, for example.  But if you accept, for instance, that people without children should pay taxes for schools, or people who don’t drive should pay taxes for highways, then you support the welfare state in principle.  However much you feel the urge to make moral complaints about liberal social policies, you can reasonably make only practical or economic ones.  You are a redistributionist.  Accept it.

Most Americans – with their sober and practical generosity – easily accept the logic of liberalism.  That practicality lets them support universal healthcare in general while still seeing Obamacare’s faults.  Most of Obamacare’s complexities and confusions result from using private institutions – i.e. insurance companies – for public ends.  Thus, its redistribution involves the regulation of private insurance plans in addition to the typical liberal funding mechanism of direct taxation.  But given the moral urgency of universal coverage and the redistribution it demands, the only alternative would be a single-payer scheme, in which the federal government acts as the health insurance company for all Americans and pays for the system out of progressive taxes.  Once again, we can argue over policy details, but let’s have the adult version of that argument, in which we accept the necessity of federal government redistribution. Conservatives may rail against redistribution in principle, while they lambaste Obama for cutting Medicare funds. And liberals may tout the benefits of tight regulations on individual plans while swiftly running from any redistributionist rhetoric.  But, outside the Tea Party’s tightly sealed ideological ghetto, everyone in America actually supports redistribution. They support it because human decency demands it.  They support it because they know that someday they may come to need it themselves.  They may consider it a necessary evil or a positive good, but they understand, intellectually or viscerally, that modern life would be intolerable without it.  That is the open secret not just of liberal politics, but of all American politics.

No comments:

Post a Comment