The American Spectator

In other forms of insurance, the carrier covers the policyholder only in the event of substantial losses, but in health care an expectation has developed that people shouldn’t pay out of pocket for anything, from major procedures to doctor visits. One can only imagine the cost of a homeowner’s insurance policy that had to cover every call to a plumber, or a car insurance policy that subsidized tanks of gas and oil changes.

UNFORTUNATELY, THE MANDATES on services, specialists, and beneficiaries tell only a small part of the story. The most prominent criticism liberals offer regarding private health insurance is that in a free market, insurers would never want to cover the truly sick—or at least not at affordable prices. For many, the solution is two sets of regulations. One is called “guaranteed issue,” which requires that insurance companies offer coverage to anybody that applies, even if the applicant has a preexisting condition, and “community rating,” which requires that insurers charge the same amount to all comers, regardless of risk factors, so that the young and healthy can subsidize the old and sick.

While such regulations make health insurance more affordable for high-risk patients, healthier citizens are forced to pay more, giving them less reason to enter (or remain in) the market. Making matters worse, because insurance companies cannot deny anybody coverage, those who are healthy are given every incentive to defer purchasing insurance until they get sick. This would be like a motorist waiting until after he gets into an accident to purchase car insurance.

As several states have already passed such laws, there’s no need to be theoretical about their ramifications. “It’s been an unmitigated disaster,” Wieske says of guaranteed issue and community rating regulations in the states.

Kentucky is a textbook example. In 1994, the state legislature passed a health-care reform package that imposed both requirements, causing a mass exodus of insurers from the state. Within two years of enactment, about 60 insurers had exited the market, according to the Kentucky Office of Insurance. This left the state with just one private insurer in the individual market, plus a now defunct state-run plan. As a result, Kentucky was forced to rescind the regulations in an effort to woo back insurers, and now it has seven carriers in the individual market.

Despite the atrocious track record of such experiments, Sen. Barack Obama’s health-care proposal would impose the same type of regulations at the national level. The plan, as described on his campaign’s website, promises “Guaranteed eligibility. No American will be turned away from any insurance plan because of illness or pre-existing conditions” and “affordable premiums, co-pays and deductibles.” It would also create a National Health Insurance Exchange in which participating insurers “would have to issue every applicant a policy, and charge fair and stable premiums that will not depend upon health status.” (Interestingly, Obama has come out strongly against an individual mandate requiring that everybody obtain health insurance, which many liberal policy analysts see as crucial for keeping healthy people within the system.)

While insurers can still do business elsewhere when such regulations are imposed at the state level, they wouldn’t have that option if the requirements were the law of the land. It is hard to see why any presidential candidate would want to impose guaranteed issue at the national level unless the goal were to deliberately destroy the private insurance market. As it turns out, that may very well be the case.

IV

IN MID-MARCH, ABOUT 2,000 progressive activists invaded Washington’s Omni Shoreham Hotel for the annual Take Back America conference organized by the Campaign for America’s Future. The mood was ebullient this year as liberals celebrated the “Crackup of Conservatism” and the “Emerging Progressive Majority,” confident that this would be a winning year for Democrats. When it came to domestic policy, health care received as much attention as any other. Activists roamed the halls with “Health Care Not Warfare” and “I’m A Health Care Voter” stickers, and there were four different panels dedicated to the topic.

In one strategy session, an audience member proposed that they enlist the aid of religious groups in pushing for universal health care, asking, “Who would Jesus deny health care?” Celinda Lake, a progressive equivalent to Frank Luntz, came armed with a slide presentation on the type of rhetoric that resonates best with voters. The word public, she said, “tests better than government.” Lake instructed progressives that they would be more successful if they made people angry, instead of making them fearful. “Rather than make people expansive, [fear] makes people contract to hold on to what they have,” she said. “Animating anger makes them expansive.”

There was broad agreement that the ideal type of health-care system would be a single-payer model, which is a technical term for a socialized system in which the government is the sole purchaser of health care. The big debate was over how to achieve that system. The purists argued that progressives should push for it immediately, while pragmatists insisted that they should focus on reforms that are achievable in the short term, and incrementally move the country toward a single-payer system.

“I’m a single payer advocate,” declared Bob Creamer, a Democratic strategist married to Illinois Rep. Jan Schakowsky, who helped devise the campaign to defeat Social Security personal accounts in 2005. “Here’s how I think we should get there. I think we need to create a public plan that is superior to any private insurance plan, include it in a package that can pass Congress…. As Newt Gingrich used to say about Medicare, he wanted it to wither on the vine. I want private insurance to wither on the vine.”

In another panel at the Take Back America conference, the influential Yale University political science professor Jacob Hacker declared outright that, “You need to have an enemy in any battle, and there are two enemies I would like to have.” The first, he said, was the right, and the second was private insurance. “I really don’t think we can mandate our way, or regulate our way, into getting private insurance to operate in a public-spirited way,” he said.

During this year’s Democratic nomination battle, the primary focus of the health-care debate between Obama and Hillary Clinton concerned the fact that Clinton’s plan required all individuals to purchase health insurance and Obama’s did not. But lost in this back and forth was the fact that both plans included a government-run option modeled after Medicare. To Hacker, this was no small detail. “It’s not like a decal on a car,” he said of the public option. “It’s the engine of the car.”

In a breakaway session during the conference, single-payer advocate Rep. John Conyers (D-MI) tried to quell a room full of progressives who wanted to push for such a system immediately.