ObamaCare Is No Big Deal Michael Maiello, 08.17.09, 1:00 AM ET
When a cop and a professor got out of control, Barack Obama defused tensions with a beer in the garden. But the way health reform opponents have flown off the handle, nothing less than a fistful of Xanax and some medical marijuana could possibly calm things down. I kid, angry mob, I kid because I love! Please don't send me to your death panels, no one is seriously suggesting silencing you with a cocktail of recreational drugs. ObamaCare isn't worth all the shouting. It's not an ambitious proposal. It doesn't change health care as we know it. Not even the industries that will be most affected are that worked up about it. The health insurers won. UnitedHealth, Aetna and Cigna will maintain hegemony. Most people will still get the health insurance that their human resources managers pick for them. Pharmaceutical companies like Merck and Pfizer will not have to contend with the federal government using its purchasing power to bring down prices or with re-imported drugs from Canada. For that, the pharma lobby might accept slightly shorter patent protection so that generic drugs can be manufactured more quickly--a minor concession for which the industry won two major victories. The most radical of Obama's suggestions, that the government should provide a strong public option to private insurance is history. It's not happening. We're getting co-ops instead. Co-ops. The last co-op I saw was an organic grocery store where you had to spend hours stocking shelves and ringing up customers just for the privilege of buying produce that's cheaper and better at a farmer's market. It'll be worse with health care. The co-ops will be small, regionally based nonprofits that will be open only to people with incomes at three or four times the poverty line or for people who are not offered insurance by their employers. The co-ops would be seeded by the government but will have to be self-financing soon after. They won't take business away from private insurers because, by design, insurance company customers won't be allowed to switch to them. Even if people had a choice, they'd likely not pick the co-ops because they won't have the scale that big insurers do. Move on, angry Town Hallians, there's nothing to get hoarse over here. Everything else that's part of ObamaCare is something that industry and the government agree on. The government will expand Medicaid to cover more poor people, and it might expand the State Children's Health Insurance Program. Neither program threatens private insurance in any way--both are for people and families who legitimately can't afford to buy insurance. ObamaCare will end the practice of rescission where insurers drop ill customers to avoid their mounting bills. This actually fits right in with the conservative critique of health insurance and with policies enacted by George W. Bush. In the conservative analysis, there's two kinds of health care--routine stuff that people should pay for and catastrophic stuff that it's just too hard to reliably save for and is more appropriately insured against. So Bush started the Health Savings Account as a tax-free way to save for health care expenses that can be tapped to pay for routine care by people who have high-deductible catastrophic health insurance. If you agree with Bush's HSA idea, then you kind of have to agree with Obama's effort to end rescission because there's simply no point in paying for catastrophic health insurance if the insurer can drop you at the first sign of catastrophe. The Obama plan will also bar insurance companies from refusing to cover people based on pre-existing conditions (either by not offering them coverage outright or by charging ludicrous premiums). The insurance companies have no problem with this, so long as everyone is required to have insurance to stop people from staying uninsured until the day after they're seriously ill. The mandate that everyone be insured is a sticking point for some on the left and on the right. I'm sympathetic to those who believe, as Obama did in the primaries, that it's basically unenforceable, and I also sympathize with freedom lovers who think it's a bit nanny-statish. But if we're willing to subsidize purchases for those who can't afford to buy insurance, and the insurance industry is willing to end rescission and stop refusing to cover people who are already sick, then this is a good deal both for society and the shareholders of publicly traded health companies. The mandate isn't a slippery slope toward socialized medicine, it's more like a subsidy for industry, and that's probably why the insurers don't mind it. Unavoidably, there will have to be some debate about publicly subsidized health plans providing abortions. Also, some will worry that taxpayer money will buy doctor visits for illegal immigrants. Believe me, I understand how infuriating it is when the government uses taxpayer dollars in pursuit of goals that individuals might abhor. But where were the anti-health reformers when the government took my money and used it to eavesdrop on phone calls, invade Iraq and bail out AIG? The government just doesn't let taxpayers dictate how each of its citizen's dollars gets spent. That's probably a good thing, because I'd blow all my tax money on obscene art and Jay-Z tickets, and you'd wonder why there were potholes everywhere. Oh, and there will be no death panels--most people will continue to have their care rationed by bureaucrats working in insurance companies instead. Why that's more comforting to people remains a mystery. If somebody denies me access to a medical service, I really don't care if they work for Aetna or the government. Here's one thing we can agree on, left or right: After ObamaCare, our senators and congressional reps will still have better health insurance than the vast majority of citizens. If you're headed to a Town Hall, could you please scream at them about that for me? It's pretty freaking absurd. If they can't give everyone in the country access to the congressional plan, they shouldn't give themselves access to it either. By all means, be angry at the the hypocrisy of our federal representatives who will give to themselves before they think about us. But don't let ObamaCare get to you. The day after ObamaCare begins, the system as we know it will have been ... tinkered with. Nothing more. Michael Maiello is the editor of Markets and Intelligent Investing at Forbes. An Equal Shot, his weekly column, runs on Mondays.