Douthat on Reforming PPACA

Cross-posted from The Agenda on National Review Online.

Ross Douthat has a useful piece out today on something I’ve been spending a lot of time on lately: what Republicans should do if and when their initial repeal effort fails. Here are some of his policy recommendations:

To address the first problem, Republicans should work to deregulate the new health care exchanges, so that high-deductible, catastrophic coverage can be purchased as easily as comprehensive plans. To address the second, they should propose capping the subsidies for the uninsured, so that they don’t dramatically exceed the value of the existing tax subsidy for employer-provided insurance.

Both of these are constructive ideas. House Republicans can ensure that high-deductible plans are not only eligible for the exchanges, but that the definition of HDHPs is broadened, such that individuals can put more money away in health savings accounts, and with more flexibility around out-of-pocket costs and deductible ceilings.

In addition, capping the dollar amount of subsidies in the exchanges could provide a backstop to the growth of subsidies, in case Republicans are ultimately unsuccessful in repealing PPACA.

Both of these efforts must be pursued with foremost consideration for how they would affect the CBO score of a repeal bill under reconciliation. As a reminder, Republicans will only be able to repeal PPACA via reconciliation if each provision of their repeal measure contributes to deficit reduction.

Ross goes on to endorse a limited enrollment period, something that we have advocated in this space:

The mandate is a harder puzzle, since it works in tandem with the requirement — popular enough to have many Republican supporters — that insurers cease denying coverage to customers with pre-existing conditions. If you repealed the mandate without repealing that requirement, people could simply wait until they were sick to buy insurance, driving everyone’s prices up.

But Republicans could propose dealing with the same problem in a less coercive way. One alternative would establish limited enrollment periods (every two years, for instance) when people with pre-existing conditions could buy into the new exchanges without being denied coverage. Anyone who failed to take advantage wouldn’t be able to get coverage for a pre-existing condition until the next enrollment period arrived. This would reduce the incentive to game the system, without directly penalizing Americans who decline to buy insurance.

Personally, I think two years is too short of an enrollment period: four-to-five years is better, as the German experience demonstrates. But the idea is sound.

Weekend Links

Because you really didn’t have anything better to do this weekend than read about health policy.

I’m late to the party, but you have to smile at Harvard economist Greg Mankiw’s take on the fiscal responsibility of Obamacare:

I have a plan to reduce the budget deficit. The essence of the plan is the federal government writing me a check for $1 billion. The plan will be financed by $3 billion of tax increases. According to my back-of-the envelope calculations, giving me that $1 billion will reduce the budget deficit by $2 billion.

Now, you may be tempted to say that giving me that $1 billion will not really reduce the budget deficit. Rather, you might say, it is the tax increases, which have nothing to do with my handout, that are reducing the budget deficit. But if you are tempted by that kind of sloppy thinking, you have not been following the debate over healthcare reform.

I’m sure there will come a point where we all get sick of Xtranormal, but it hasn’t happened yet, so check out this hilarious video entitled “Medical Loss Ratio Explained,” which explains the Obamacare debate better than I could with a year’s worth of blog posts:



One thing that the Left does well, but the Right does poorly, is talk about how real people are affected by health care policy. The Heritage Foundation has launched a series of videos to address this issue, and here is the latest (h/t InsureBlog):

Health Wonk Review Review: Does PPACA Control Health Costs?

Cross-posted from The Agenda on National Review Online.

The latest edition of Health Wonk Review was hosted by Joe Paduda of Managed Care Matters. Fittingly, it touched on Republican efforts to repeal PPACA. Count Joe among those who are irked by the “Obamacare” moniker: “the President signed a bill that was sent him by the Senate; BaucusCare would be much more accurate.” Does this mean we get to refer to the “Bush tax cuts” as the Lott/Daschle tax cuts, and the “Clinton balanced budget” as the Gingrich balanced budget?

Paduda also weighed in on the debate regarding the CBO’s assessment of PPACA’s fiscal impact, arguing we should trust the CBO because “they’ve no axe to grind, unlike the pols.” (My take on the matter is somewhat less sanguine.)

Austin Frakt of the Incidental Economist is the left-of-center health wonk who is most engaged with right-of-center analysts. So I was surprised to see him approvingly cite this quotation from health economist Henry Aaron:

[T]he bill contains, at least in embryonic form, virtually every idea for cost control that any analyst has come up with…The most practical cost-control strategy that is now available to Congress is to accelerate the implementation of these provisions, not to stymie them.

This argument that “every idea for cost control that any analyst has come up with” was incorporated into PPACA is only true of you entirely exclude the right side of the spectrum. I can tick off a laundry list of cost-control strategies that weren’t included in the law: means-testing Medicare benefits; defined contribution reforms; indexing Medicare eligibility to life expectancy; serious tort reform; FEHBP-modeled reforms, etc. etc.

Furthermore, I and most other free-market-oriented health policy analysts argue that PPACA will increase costs by further subsidizing the overconsumption of health care. If you increase demand, while keeping supply constant, prices go up.

The opportunity for cost control that most excites center-to-left health wonks is PPACA-sanctioned accountable care organizations, or ACOs. Indeed, the January 2011 issue of Health Affairs is devoted to the topic. ACOs work by assembling a group of hospitals, doctors, and clinics who agree to be paid based on quality-driven measures, instead of simply on a fee-for-service basis. With this in mind, Jason Shafrin of Healthcare Economist has identified some legal barriers to ACO implementation that ACOs will need to seek waivers from.

Jeff Goldsmith of the Health Affairs Blog has an unconventional approach to Medicare’s “doc fix”; i.e., Sustainable Growth Rate, problem: “writing off the SGR ‘debt’ to the federal budget as ‘uncollectable’ and demanding both sacrifice and reform from the physician community in exchange.” The end result of the proposal put forth by the President’s deficit commission was somewhat similar: various Medicare and health spending cuts used to offset a long-term doc fix.

Rich Elmore of Healthcare Technology News links to a report from the International Federation of Health Plans that finds that the U.S. has the highest hospital and physician fees in the world. Could this mean that the “doc fix” doesn’t need to be fixed?

David Harlow of HealthBlawg has an interesting piece on an ongoing lawsuit to overturn one aspect of the Massachusetts individual mandate. The issues are quite different from those surrounding the PPACA mandate, as you can imagine.

The rest of this fortnight’s Health Wonk Review can be found here.

Wasn't Obamacare Supposed to Stop Insurance Rate Hikes?

Cross-posted from Critical Condition on National Review Online.

Supporters of Obamacare often attempt to reassure themselves by claiming that opponents of the law are ignorant and demagogic. The PPACA Pack, on the other hand, is enlightened, cerebral, and compassionate.

In reality, however, Democrats are the ones who speak most demagogically about health care. Like when the Democratic National Committee says that “insurance companies … overcharge for insurance just to boost their profits and CEO bonuses.” Indeed, the DNC went so far as to claim that Obamacare “frees Americans from the fear of insurance companies raising premiums by double digits with no recourse or accountability.” Kathleen Sebelius and the DNC would have you believe that Obamacare prevents rate hikes by cracking down on those demonic, profit-hungry insurance companies, and that repealing the law would allow insurers to once again run amok.

So, then, how to explain the news this month that Blue Shield of California was “seeking cumulative hikes of as much as 59% for tens of thousands of customers” this year? Wasn’t PPACA supposed to stop these supposedly abusive practices?

Unfortunately not. Blue Shield has stated that the new rates “meet the federal requirement that 80 percent of premiums are spent on healthcare expenses,” putting paid to the nonsensical argument that marketing expenses and CEO bonuses are driving premium increases. As Blue Shield detailed in a lengthy statement, the rate hikes correlate directly to increases in the cost of health care, including 4 percent “to cover the costs of enhanced benefits required under healthcare reform.” Despite these increases, Blue Shield expects to lose $10-20 million in 2010 and $20-30 million in 2011 on their individual plans.

New California insurance commissioner Dave Jones, in his first act in office, fired off a letter to Blue Shield, calling on the insurer to suspend its rate hike. “I wish to satisfy myself that all the pending proposed increases have been thoroughly and excessively reviewed.”

But Blue Shield of California is a not-for-profit entity “that has long advocated for universal coverage,” and the company was not cowed by Jones’ posturing. Instead, Blue Shield CEO Bruce Bodaken said the company would have its increases reviewed by an independent actuarial consultant, promising to refund Blue Shield’s policyholders with interest if the company had calculated its rate increases incorrectly.

But neither independent consultants nor press releases from politicians can change the basic facts of health costs. As Jordan Rau recently chronicled in an insightful piece for Kaiser Health News, hospitals are taking advantage of their monopoly status to charge more for their services, and insurers have no choice but to pass those increases onto their policyholders, or they would go out of business.

Indeed, Obamacare is guaranteed to increase, not decrease, underlying health costs. The law subsidizes excessive health spending, and imposes costly mandates on insurance plans that drive costs upward. Those who are genuinely concerned about rising health costs must start by repealing that law.

Obamacare: The End of the Beginning

Cross-posted from National Review Online.

Sixty-eight years ago, after a long-sought victory in Egypt that marked a turning point in World War II, Winston Churchill said, “This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

In what will be a long and arduous struggle to bring fiscal stability and true reform to our tottering health-care system, partial Republican control of Congress was a necessary first step. But, now, the hard work begins.

The Republican health-care platform, such as it is, is pretty simple: Repeal Obamacare and replace it with incremental, common-sense, politically popular reforms. The GOP’s “Pledge to America” may therefore have been an appropriate platform for a midterm election. However, the document barely begins to address the profound and difficult issues that any serious government must. Indeed, if the early signals are any indication, the troubling reality is that the Republican health-care agenda for 2011 and 2012 may actually make it harder to repeal Obamacare in 2013, and thereby harder to achieve conservatives’ long-term goal of a humane, efficient, and fiscally sustainable health-care system.

The best way to grasp the enormous difficulties ahead is to work backwards.

Runaway growth in government spending is America’s biggest fiscal problem today. Growth in Medicare and Medicaid spending, in turn, accounts for nearly all the projected future growth in government outlays relative to GDP. If the principal domestic-policy goal of conservatives is to restore the country to a truly limited government that can live within its means, we can achieve that goal only through serious and thoughtful reform of health-care entitlements.

That is to say: For the foreseeable future, health care must become the single dominant focus of conservative domestic policy.

Hence, our first and most important problem is intellectual. Conservatives speak often of repealing and replacing Obamacare. But how many can articulate a conservative vision of what our health-care system should look like? Leading Republican politicians have plenty of detailed opinions on a broad range of subjects. But does anyone know what John Boehner’s vision is for the future of American health care? How about the main contenders for the 2012 Republican presidential nomination? To ask the question is to answer it.

FREEDOM, SECURITY, AND INNOVATION

It should be said that, within the diminutive circle of conservative health-policy wonks, there is a fair amount of agreement as to where we should go. But translating that wonkery into plain English isn’t easy.

Among less specialized conservatives, a common refrain is, “I’m not clear on the details, but that Paul Ryan sounds like he knows what he’s talking about.” And Rep. Paul Ryan’s plan is indeed a solid start. But unless other Republican leaders fully immerse themselves in health-care policy, they will be able neither to articulate the core principles of free-market health care, nor to address new issues as they arise, nor to persuade American voters that they should be trusted to enact far-reaching reforms.

The core health-care principles that Republicans should embrace can be summarized in three words: freedom, security, and innovation.

First, the conservative vision must, out of both principle and pragmatism, hold that the best health-care system is one that trusts individuals to make the choices that are best for them and their families. The liberal view of health care is the opposite: that individuals are neither knowledgeable enough nor wise enough to make health-care decisions for themselves; instead, these decisions are best left to unelected government experts.

Second, conservatives must stand firmly behind the principle of a safety net for those who are genuinely down on their luck, and also for the principle that those who pay for insurance and play by the rules will get the care that they’ve earned, without losing out on technicalities. Liberals might agree rhetorically with these principles, but they use them as a pretext for expanding the entitlement state, with destructive effects: extension of government insurance to those who don’t need it, at a cost the country can’t afford, and strangulation of private insurers with onerous regulations that the market can’t sustain.

Third, conservatives must always keep in mind that the entire point of health care is to extend and enhance life. Thus their vision can include, but must be broader than, the hot-button issues of abortion and stem-cell research. A pro-life health-care policy involves accelerating the pace of medical innovation, by reducing the regulatory and financial burdens we place on the pharmaceutical and medical-device industries. That means strengthening the influence of market forces, as opposed to subsidies and price controls, on the development of drugs and devices. It also means streamlining the FDA so that innovative new therapies can reach the market more quickly and cheaply. It means minimizing, and if possible eliminating, the ability of federal bureaucrats to deny life-extending care.

Liberals, on the other hand, tend to look askance at medical innovation. Most progressive health-care economists blame new medical technologies for rising health-care costs: costs that can, in their view, be lowered only by restricting patients’ access to those technologies. In addition, new drugs and medical technologies are developed by private companies, for profit: a concept to which many on the Left are instinctively hostile.

Health-care policy is exceedingly complex, and translating these basic principles of freedom, security, and innovation into actual legislation will not be easy. Doing so must start with three policy goals.

First, Republicans must foster a truly free market for health insurance by eliminating the differing tax treatment of employer-sponsored and individually purchased insurance. Second, Republicans must make dramatic improvements to Medicaid, using Mitch Daniels’s impressive reforms in Indiana as a template. Third, Republicans must move Medicare onto a sustainable path that puts financial control in the hands of seniors themselves rather than central planners.

On all three fronts, Obamacare moves us in exactly the opposite direction. The law will force employers to provide insurance for their employees, instead of allowing them to leave that money in their employees’ paychecks so that they can buy insurance for themselves. The law will dramatically expand Medicaid in ways that will accelerate the pending bankruptcy of several large states, even though Medicaid provides far worse care than people can obtain on their own. And the law will effectively eliminate Medicare Advantage and other programs that helped move Medicare from its traditional single-payer approach into a more market-oriented one.

THE OBAMACARE TRAP

And so, it remains true that the most critical task for Republicans in the 112th Congress is to lay the groundwork for the ultimate repeal of Obamacare. Given that House Republicans don’t have the power to repeal the law by themselves, what can they do in the meantime? More importantly, what should they do in the meantime? The question has been asked, but it hasn’t been adequately answered.

We must remind ourselves of the electoral realities. For Republicans to succeed in repealing the Patient Protection and Affordable Care Act (PPACA), they will need to control the House, the Senate, and the White House. From a political standpoint, if Republicans are not able to achieve this in 2012, they are unlikely ever to repeal Obamacare.

This means that influential Republican activists must — must — coalesce around the most electable Republican presidential candidate who can articulate conservative health-care principles. This is no time for single-issue small-ball or personal score-settling. A GOP nominee who passes all the litmus tests but can’t win in November would only succeed in making Obamacare permanent. One who can win but isn’t capable of pushing for real health-care reform wouldn’t be much better.

In turn, this means that Republican presidential aspirants must place health-care policy front and center in their campaigns. They must avoid the easy rhetorical flourishes and expend the time and effort to gain fluency in the complexities and trade-offs of health-care policy. A politician who regularly speaks of fiscal responsibility and limited government without building a mandate for actual, specific legislation to achieve them will not move the country in his direction. This is a time for serious government, and there can be no greater test of a politician’s seriousness than his command of health-care policy.

And, of course, in order to repeal Obamacare, Republicans also have to gain control of the Senate. Here, too, we cannot afford any more Delaware Debacles: We need candidates who, whatever their flaws, are electable and who pledge to vote for repeal. A realistic best-case scenario is that Republicans get to between 51 and 55 seats in the upper chamber: a majority, but not a filibuster-proof majority. In the 2010 wave election, they gained six seats, raising their total to 47. Despite the favorable turf in 2012, they are unlikely to win the 13 additional seats needed to reach 60.

Hence, full repeal of Obamacare will require the participation of Democrats. There may be some Democratic senators willing to go along with a repeal effort: Joe Manchin in West Virginia, Ben Nelson in Nebraska, and a few others. But it is very likely that even with those Democrats, there won’t be 60 repeal votes in the Senate. If that is the case, then Republicans will need to turn to the reconciliation process to roll back the law.

As we learned last year, the reconciliation process is different from the normal legislative process. The Senate parliamentarian, using Congressional Budget Office estimates, certifies measures that, either by raising taxes or by cutting spending, will reduce the budget deficit. Only deficit-reducing measures can be passed using reconciliation.

The problem for Republicans is that the CBO estimated that the PPACA would reduce the deficit by $132 billion over the 2010–2019 period. Because of amendments passed in late 2010, it’s likely that the CBO’s estimate of the cost of repeal will be even higher in 2013. Hence, a simple, two-paragraph repeal measure won’t get through reconciliation.

This is where the agenda of the next Congress comes in. In place of comprehensive health-care reform, House Republicans are promising to reverse some of Obamacare’s most unpopular elements: for example, the new 1099 provision, which requires that all businesses issue an IRS form 1099 for any payments to vendors of more than $600 per year. The CBO scores this measure as raising $18 billion for the government over ten years: indeed, that’s why it was included in the PPACA in the first place. If Congress reduces Obamacare spending elsewhere to “pay for” this tax cut, ultimate repeal could become more difficult.

The individual mandate is a more worrisome example. Last June, the CBO projected that repealing the individual mandate would reduce the deficit by $252 billion in the 2011–2020 timeframe. In making that calculation, the CBO is counting on some people under PPACA paying the fine for not purchasing health insurance, thus increasing revenues to the government; however, repeal of the mandate would generate savings by reducing the number of people who rely on Medicaid and exchange subsidies. If the mandate is eliminated, repealing the rest of Obamacare will become $252 billion harder.

Hence, if Republicans in the 112th Congress succeed in eliminating some of these provisions, they will increase the fiscal cost, as scored by the CBO, of repealing the rest of Obamacare in the next Congress. In addition, every unpopular tax increase that is eliminated now will need to be offset by additional tax increases or spending cuts, which will complicate things when the real repeal effort starts in 2013. Republicans, therefore, may be setting a trap for themselves.

THE REGULATORY INTERREGNUM

Another problem with Obamacare is regulation. The PPACA dramatically expands federal regulatory control over the health-care system, concentrating enormous power within the Department of Health and Human Services. But, because most regulations aren’t germane to the budget, from a parliamentary standpoint, it’s far from clear that Republicans will be able to use the reconciliation process to reverse Obamacare’s substantial regulatory provisions. For example, the PPACA provision requiring health insurers to keep their medical-loss ratios above 80 percent — a technicality that will drive many insurers out of business — isn’t germane to the budget, but it is highly relevant to the future of the private insurance market.

Precisely because these regulations do not affect the fiscal calculus, and therefore will not undermine Republicans’ ability to repeal Obamacare after 2012, it is here that the new House majority can be most constructive.

In other words, Republicans will be well advised to adopt a two-track strategy: using the conventional legislative process to turn back as much of Obamacare’s regulatory architecture as possible, while waiting until 2013 and then using the reconciliation process, to repeal Obamacare’s tax and spending increases.

Hence, in the near term, Republican policy experts and legislative staffers will need to come up with a comprehensive regulatory strategy, one that will entirely replace Obamacare’s regulatory architecture with a sounder one that hews more closely to conservative market principles.

The politics of smart regulatory reform are favorable, too. Remember that many of the negative headlines about Obamacare since the law passed have had to do with new regulations: the fact that McDonald’s almost dropped health coverage for its junior employees; the aforementioned medical-loss-ratio mandates, which will force many insurers to drop out of the market; the lobbyist-driven ban on new hospital construction, which preserves local hospital monopolies; and on and on. Regulatory reform is an important way for the Republican House to earn its credibility on health-care reform, while calling attention to Obamacare’s many flaws.

One other thing to keep in mind: The Prescription Drug User Fee Act — the law that Congress uses to oversee the FDA — is up for reauthorization in 2012. House Republicans should use this opportunity to reform the FDA and demonstrate that they are on the side of patients who want faster access to innovative new medicines.

MEDICARE AND MEDICAID REFORM

Finally, House Republicans must begin to build the case for real entitlement reform. Medicare is the most politically sensitive subject, but it is one where Paul Ryan has already done most of the necessary groundwork. Medicaid is an even more urgent issue, as many states are sinking under the weight of reckless commitments made by their governors in flusher times.

It will be difficult for Republicans in the next Congress to achieve much on these issues without leadership from the other side. If President Obama’s deficit commission is any indication, that leadership does not exist. The commission’s report effectively advocated rearranging Medicare’s deck chairs, and it proposed essentially nothing to address the grave problems with Medicaid.

There is one Medicare-related issue that the next Congress will be forced to deal with: the never-ending saga of Medicare’s Sustainable Growth Rate, a.k.a. the “doc fix,” which governs how Medicare reimburses doctors and hospitals for their services. Remember that the doc fix was kept out of Obamacare because it would have added $239 billion over ten years to the law’s price tag. Republicans will be under significant pressure from the American Medical Association and others to continue to pay doctors and hospitals at current rates, instead of the roughly 25 percent lower rates required by the 1997 Balanced Budget Act.

It’s not clear that Republicans should go along. For one thing, the AMA was a strong supporter of Obamacare (albeit over the dissent of many of its members). More importantly, perpetuating the doc fix will cost tens of billions of dollars: money that will have to come out of some other vital priority. Republicans in the 112th Congress will need to consider ways to address the doc fix, and other pressing problems, without jeopardizing their ability to repeal Obamacare in the 113th.

Recent history is not encouraging. In December, with bipartisan support, Congress passed doc-fix legislation that froze reimbursement rates at 2010 levels for 2011, at a cost of $19 billion. The law was “paid for” using gimmickry: an amendment to Obamacare that would require some individuals to pay back insurance subsidies they may receive at some point in the future. Republicans saw this as a victory, as the compromise reduces future Obamacare spending, albeit in a manner that will be difficult to enforce. However, in the medium term, it is a victory for the Democrats, as the measure adds to the difficulty of repealing the entirety of Obamacare using the reconciliation process.

A TIME FOR GROWN-UPS

It has been said that we campaign in poetry and govern in prose. But the experience of Ronald Reagan adds a corollary: Only those leaders who have a command of public policy before their candidacies begin can succeed at both campaigning and governing.

The problems we face are grave. If their solutions were simple, they would already have been tried. Our presidential aspirants and congressional luminaries, as well as the people who elect them, must face up to the difficult choices ahead. If they do, we just may succeed in turning Obamacare back, and putting something much better in its place.

American Imbecilism

Cross-posted from @TAC.

I regret to say that this is another post on “American Exceptionalism” – to my mind, the most bogus ideological construct since Theodore White likened the Kennedy administration to the Knights of the Round Table. ”American Exceptionalism” is truism gussied up as philosophy. Of course America is exceptional in some respects. So is every other nation. Nor is there any political or intellectual figure who seriously proposes (or can be seriously be construed as proposing) to obliterate all differences between America and rest of the world. Object to universal health care or defend America’s military extravagance if you will: Inflating the merely exceptional into the “Exceptionalist” will add nothing to your arguments but bombast.

Yet to hear conservative intellectuals carry on, you would think that “American Exceptionalism” was the most groundbreaking political idea since universal manhood suffrage. No less an eminence than Harvard’s Harvey Mansfield takes up the idea this weekend in The Wall Street Journal. If Mansfield can’t make sense of it, then, depend on it, none of the lesser lights of the conservative movement can either.

Mansfield begins portentously. Asking how much Alexis de Tocqueville learned by actually visiting America (as opposed to contemplating it from afar), and by what method, Mansfield writes:

These questions [regarding Tocqueville] engage the assertion known today as American Exceptionalism, a recent issue between Republicans, who trumpet it as the justification for American patriotism, and Democrats, who deprecate it as nothing special, unless it is special to be leader of all other unexceptional countries.

The “assertion” (it is not anything so pitifully monosyllabic as a “claim” or “point,” mind you) is known today as American Exceptionalism. In previous eras, it was presumably known by different names. Whatever it was called before, say, Obama took office, Mansfield leads us to understand that the question of American Exceptionalism has perennial significance — so much significance, indeed, that one must consult the immortal Tocqueville to understand it.

For all the importance he attributes to American Exceptionalism, however, Mansfield nowhere deigns to define it. Suppose that of instead of, “These questions engage the assertion known today as American Exceptionalism,” Mansfield had written simply, “These questions help us figure out whether America is different.” The latter statement accurately translates Mansfield’s Really Smart Person Talk, yet hardly calls for a close reading of Tocqueville. You don’t need to read Democracy in America to notice that, yes, America does of course differ from other countries. To define American Exceptionalism — the idea that America is in some ways unlike other countries — is to reveal just how banal it really is.

Mansfield goes on to contend that Democrats deprecate “American Exceptionalism.” If he had tuned into President Obama’s State of the Union address, he might on the contrary have heard the following:

We [Republicans and Democrats] have fought fiercely for our beliefs . . . That’s what helps set us apart as a nation. . . .

We believe that in a country where every race and faith and point of view can be found . . . That, too, is what sets us apart as a nation.

At stake right now is . . . whether we sustain the leadership that has made America not just a place on a map, but the light to the world.

America still has the largest, most prosperous economy in the world.

What’s more, we are the first nation to be founded for the sake of an idea — the idea that each of us deserves the chance to shape our own destiny.

What America does better than anyone else is spark the creativity and imagination of our people.

Recent events [in Tunisia] have shown us that what sets us apart must not just be our power — it must also be the purpose behind it.

That’s seven claims of American Exceptionalism already. There are dozens more: I only stop excerpting them because they consume perhaps a third of the entire State of the Union address. Moreover, the very examples Obama cites of America’s alleged uniqueness are the ones that conservative intellectuals warn are under attack — in particular, that America has a quasi-religious mission to spread its ideas to the rest of the world. Mansfield’s coolly self-assured claims to the contrary, Democrats not only endorse American Exceptionalism but have made it the core of their governing philosophy.

Very well, perhaps Mansfield is not the most reliable observer of contemporary politics, to put it mildly. No matter: He’s the William R. Kenan, Jr. Professor of Government, not Political Punditry. Surely his performance will surely improve when he plunges not beyond his depth but stays within his area of expertise.

Alas, that is not the case. Mansfield argues that Tocqueville believed in “American Exceptionalism” yet Mansfield’s evidence proves the opposite. He concedes that Tocqueville didn’t think much — indeed, Tocqueville barely even seems to have noticed — the unique intellectual achievement of the Founders. Ignoring theory, Tocqueville looked instead at how Americans actually practiced democracy. Mansfield quotes Tocqueville’s own summary of what he found (or thought that he had found): America was “more than America . . . an image of democracy itself.” Or, as Mansfield puts it, “America was democracy complete and as a whole, the material and source of its image.”

In other words, Tocqueville saw America as unique because America had taken the practice of democracy the furthest. One doesn’t have to get very far into Tocqueville to learn that he believed that the whole world was moving in America’s direction — i.e., away from tradition and aristocracy and toward equality of condition. If Tocqueville saw America as a living model of democracy, then it follows that Tocqueville did not see America as very exceptional at all. Americans were in Tocqueville’s view merely the most advanced. Under a Tocquevillian interpretation of the present, Americans could not even boast of that, for the world now brims with democracies. To save American Exceptionalism, one must either downplay the very features that Tocqueville found so notable, or else recharacterize them as American idiosyncracies rather than (as Tocqueville saw them) byproducts of equality.

Mansfield’s ends his attempt to build a Tocquevillian theory of “American Exceptionalism” with this baffling swipe at the social sciences:

Tocqueville asks intelligent questions of intelligent people and presses them to face their contradictions and explain themselves; he thinks and learns as he surveys. Today’s survey researcher asks bland questions of average respondents, has an assistant code the responses, restates and manipulates them mathematically, and then interprets them according to a model that he can persuade his professional colleagues to accept. Which method produces the better result? To answer the question, consider that Tocqueville addresses the question of American Exceptionalism, the question of what America is all about, while social science assumes it is meaningless or answerable and evades it.

Mansfield has spent a lifetime in the academy, but his description of the social sciences is unrecognizable. Asking “bland questions of average respondents”: is this really how economists proceed? Linguists? Psychologists? International Relations theorists? Not at all. At best, Mansfield has characterized a single research program — namely, the study public opinion — and somehow confused the (minuscule) part for the (vast) whole. Tocqueville’s methods are not even obviously superior to those of pollsters. So most people have trouble coming up with cogent philosophical reasons for their beliefs and actions. What of it? As any economist could tell you, cognitive resources, like most others, are scarce. If Americans in Tocqueville’s day could not justify their institutions to an imperious Frenchman, then that may prove only that they have better things to do with their time. If Mansfield was trying to vindicate some alternative social science agenda (presumably, his own), he failed.

Perhaps the idea of “American Exceptionalism” has simply dulled his wits, as it has those of so many of his allies.

Come on, Kathleen

Cross-posted from Critical Condition on National Review Online.

This morning, the Department of Health and Human Services released a report headlined, “At Risk: Pre-Existing Conditions Could Affect 1 in 2 Americans: 129 Million Could Be Denied Affordable Coverage Without Health Reform.” Get the implication? Without Obamacare, half of America would be left without health insurance.

Well, admits the actual report, maybe not exactly. The HHS estimates that anywhere between 50 to 129 million non-elderly Americans have “some type of pre-existing condition.” Between 50 and 129 — I’ve gotten more reliable estimates of next year’s weather. But the real laugher is in how the HHS takes the term “pre-existing condition” and mutates it beyond all recognition, in order to prop up our benighted new health-care law.

Let’s understand first what the problem of preexisting conditions is.

Because our World War II–era tax system allows employers to buy health insurance tax-free, while making individuals buy it with after-tax dollars, the vast majority of those under 65 get health insurance from their employers. This, in turn, creates the phenomenon of job lock: Individuals who fall ill at one job (or have family members who fall ill under their health plan) are afraid to leave that job, because switching jobs means switching insurance plans, and a new insurance plan is likely charge more to cover someone who is already sick.

Note that the words “denied coverage” are not present in the preceding paragraph. Indeed, as Michael Cannon points out, a 2001 HHS survey found that only one percent of Americans had ever been denied health insurance for any reason. Cannon brings us to two other studies, one by a Wharton economist and one by the RAND Corporation, both of which echo the HHS data. As Cannon writes,

It is true that insurers charge higher premiums to many people with pre-existing conditions — and it is crucial that they have the freedom to do so.  Risk-based premiums create virtuous incentives for people to buy insurance while they are healthy and to be cost-conscious consumers.  They also encourage insurers to develop innovative products that protect against the risk of higher premiums.  The real problem here is that the government has created an employment-based health insurance system that denies consumers the protections that unregulated markets already provide, as well as additional protections that insurers would develop absent this government intervention.

Our health-care system, pre-Obamacare, was far from perfect. But it’s exceptionally dishonest to say that half of Americans are at risk of losing their coverage without Obamacare’s blizzard of mandates and controls. Instead of creating two new entitlements and hundreds of thousands of pages of new regulations, we could have done something much simpler: equalize the tax treatment of individual and employer-sponsored health insurance.

There are lots of ways to do this, depending on if you want to increase or reduce taxes. You can eliminate the employer loophole altogether, raising taxes by over $300 billion a year, making a huge dent in the budget deficit. Or, you can extend the tax break to all individuals, whether employed, self-employed, or unemployed. Finally, you could split the difference: reducing the tax break for employers, but increasing it for individuals.

Once people are buying insurance for themselves, rather than depending upon their employer, their insurance stays with them. If you lose your job or change jobs, your insurance will still be yours, just as your auto insurance and your life insurance stays with you regardless of where you work. And if you have insurance, like most Americans do, the issue about preexisting conditions is irrelevant: If you are sick, your insurance provides the coverage it is meant to provide.

Sebelius and her HHS colleagues try to morph the definition of “preexisting conditions” into “conditions.” Take this random sample of Sebelius’ assault on the English language:

An analysis of a survey that follows people over time found that, among healthy people—reporting very good or excellent health with no chronic conditions—today, 15 to 30 percent (depending on their age) will develop a pre-existing condition within the next eight years.

So, let’s get this straight. Fifteen to 30 percent of Americans will, in the future, develop a preexisting condition. This only makes sense if the HHS has also invented time travel.

A person who has health insurance, and later becomes ill, does not have a preexisting condition. He has a condition of the plain old “existing” kind—one that his insurance will help pay for. This is exactly how insurance is supposed to work.

Millions of young, healthy people who can afford health insurance today choose not to buy it. Obamacare will allow them to buy it after they get sick — because, aha! They now have a “preexisting condition.” This is exactly the opposite of how insurance is supposed to work.

Obamacare’s advocates want you to believe that, without their 2,300-page, trillion-dollar extravagance, half of America would lose their health insurance. The reality is that preexisting conditions is a problem affecting a minute fraction of Americans, a problem that could be solved with a simple, one-page bill.

If Republicans repeal Obamacare and replace it with a straightforward law that equalized the tax treatment of employer-sponsored and individually-purchased health insurance, they will have done more for real health-care reform, and for people with real preexisting conditions, than the last forty Congresses put together. Let’s hope they get their chance.