Republicans won because we have private health insurance
Yes another example of why we need Medicare for All.
Government subsidies have proven to be the most consequential benefit provided by Obama’s Affordable Care Act, so it made sense that Democrats would stake any deal to reopen the government on their extension. And that’s why the public ultimately supported the Democrats in this shutdown fight, as I posted yesterday morning in a graph on social media:
But if you know how Democrats typically fare in these fights then you knew that popular support would do little to guide their strategy. “There’s just no political case for folding,” I wrote, “which is how you know that Democrats are eventually going to do it.” Sure enough, within nine hours Democrats had agreed to a deal that would re-open the government without extending the subsidies.
Understandably, liberals have focused their outrage on the fecklessness of Democrats who agreed to the deal. “We need to purge the weak Dems,” Brian Tyler Cohen said in a typical post. “I’m looking forward to a robust primary cycle and new Democrats who know how to right.”
Still, it is worth reflecting on how we got into this situation in the first place.
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Obamacare is means tested, which means that one’s eligibility for subsidies varies dramatically based on income. If for example you are at 150% of the poverty line or less, the ACA will cover up to $2000 in monthly premiums, whereas if you are at 650% the government only provides about $520. This sliding scale has a significant effect on the quality of insurance beneficiaries receive. Since the poorest Americans get larger subsidies, they tend to spend them on better healthcare plans: 81.4% of enrollees at 150% of the poverty line or less have a silver plan. Americans who are slightly better off, meanwhile, spend their limited subsidies on lower quality plans: at 400% of the poverty line, enrollment in bronze plans leaps to 67%.
The consequence of this is that net benefit that Americans derive from ACA subsidies drops dramatically as their income rises. If you are near the poverty line, it covers around 100% of a silver-tier plan; but if you make just $60k a year, you are at best getting half that from the government, and the odds that you’ve slid back to a bronze-tier plan to cut costs have more than doubled. And of course, if you are making that much then the odds that you get your insurance through your employer are extremely high — over 80% — which means that by then ACA subsidies aren’t helping you at all.
On that note, here’s what net support for restoring the enhanced ACA subsidies looks like:
This pattern recurs throughout polling on the ACA. In the same survey, for example, YouGov asked respondents if they approved or disapproved of Trump stopping the funding; those making $50k or less disapproved by a margin of 25%, but at six figure incomes that margin drops to 11%. KFF’s health tracking poll has Obamacare’s net favorability at +40 among people who make less than $40k; among those who make more than $90k, meanwhile, that number drops to +23.
So while support for the subsidies remains significant across the board, one can see how it declines as household income goes up. That drop matters because it clearly would have taken overwhelming public support for the subsidies to save them. Instead, Congressional Republicans were widely motivated by the danger of a Trump-endorsed primary challenge, according to reporting by Phil Galewiz and Stephanie Armour. And Trump’s views on healthcare have been significantly informed by lobbying from the so-called Paragon Health Institute — a think tank swimming in libertarian money connected to Charles Koch and the secretive DonorsTrust fund as well as the neo-Bircher Bradley Foundation.
Overcoming that kind of well-financed lobbying would have required precisely the kind of overwhelming voter insurgency that private health insurance undermines. Economically, the very existence of private health insurance splits voters into two different interest groups: those who can afford it and those who can’t. Those who can afford it will naturally have less of an incentive to preserve government health insurance programs than those who cannot. And as we have seen in this case, all it takes are a few ideologically motivated billionaires to overcome an ambivalent population.
This direct consequence of private health insurance is why settling for a public option is a non-starter for socialists. It’s why, during the 2020 elections, supporters of Medicare for All so ferociously opposed the alternatives offered by Elizabeth Warren and Pete Buttigieg, both of which began as a public option. Keeping a public option in place fractures the social solidarity that you need to save universal healthcare from the billionaires. Enlisting everyone in the same universal program, meanwhile, gives them a stake in preserving the status quo.
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The Democratic rank-and-file has overwhelmingly responded to this defeat for the ACA by casting it as a failure of willpower and calling for new Democrats who are willing to fight. Here, for example, is another typical response from insurgent Congressional candidate Kat Abughazaleh:
This is exactly what’s wrong with Democratic Party leadership and why we need more people in Congress who will actually hold the line.
It is true that we would be better off with Democrats who are actually interested in fighting the GOP. But now, consider Kat’s platform:
Every American deserves healthcare regardless of whether they have a job. That’s why we need a universal single-payer healthcare system — with an opt-out if you’re a private insurance super-fan… for some reason.
In other words, even as Kat promises to fight, she is calling for a system that guarantees fights over healthcare for the foreseeable future. As long as private health insurance is an option, the interests of Americans who can afford it will always be different from those who cannot. Socialism proposes to solve this conflict by nationalizing health insurance. Liberalism propose to deal with this conflict by asking you to rely on their good intentions and willpower, forever. To see how well that strategy works, just look at what happened last night.
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