The Central Difficulty

Here is a strong argument by Sean Trende why the health care boondoggle has a good chance of being repealed:

… This bill is substantively different than Social Security and Medicare.

My colleague Jay Cost made a critical point a few days ago:

“Franklin Roosevelt and Lyndon Johnson made use of an ingenious social insurance system – promoting the idea that we all pay in today to take out tomorrow. It was consistent with American individualism. It was simple. It was intuitive. It was bipartisan. Obama’s new system has none of those virtues.”

This feature is what makes repealing or substantially modifying Social Security and/or Medicare so difficult. They are entitlements that are broadly given to the middle class, who also pays for them. …Everyone, from the poorest member of society to Bill Gates, has some stake in Social Security and Medicare.

By the time a member of the middle class retires at age 65, he will have likely paid tens of thousands of dollars into the Social Security system. He expects to get that money back. The same goes for Medicare… In other words, cutting Social Security or Medicare requires taking something away from the middle class that they’ve already paid for. That’s obviously hard to do.

While this bill was intended to be a broad middle class entitlement in the mold of Social Security and Medicare, it is fundamentally different. It is funded by a variety of mechanisms that target specific stakeholders. It is paid for primarily by Medicare beneficiaries and the wealthy, neither of whom are likely to receive the benefits. While beneficiaries will have a stake in the program, it will not be as substantial as their stake in their Medicare or Social Security benefits, which they have already essentially “bought” by the time they approach retirement.

Moreover, this bill will have a smaller number of beneficiaries, especially at first. Democrats like to brag that in the weeks after the bill has passed, the ban on pre-existing conditions will be lifted for children, adults with pre-existing conditions will be allowed to participate in high-risk insurance pools, and adults will be able to maintain their children on their insurance until those children turn twenty-six.

These are popular features of the bill, but I’m not certain how broad their appeal is. Most people do not have pre-existing conditions that they know of, nor do they have children with pre-existing conditions… I’ve not seen statistics on the number of parents who would like to keep their children on their insurance policies, but I imagine the number is relatively small compared to the vast number of people who are eligible for Medicare or Social Security.

Indeed, the central difficulty that the bill will run up against is the same one it has run up against all along: most people already have health insurance, and most people are basically happy with their insurance…the bill creates a number of real losers as well: People who participate in Medicare Advantage, healthy people who would rather not purchase insurance, and people whose employers stop providing health insurance as a result of the bill…

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