Deconstructing The Rhetoric

A week or so ago, an Indiana legislator–a Republican– posted a comment to Facebook about the current effort to “repeal and replace” the Affordable Care Act. I know this particular Republican to be thoughtful and well-intentioned; he’s not one of the mean-spirited or rigidly ideological partisans who populate our Statehouse.

His “logic,” however, defied reality.

He began by saying that we are not debating healthcare–we are debating access to health care via insurance coverage and that government  should “let the insurance market work.”  (Why he thought the distinction significant mystifies me, but okay.)

I am a huge proponent of markets–in areas of the economy where they work. Most people recognize that healthcare is an area where markets do not work; market transactions require a willing buyer and a willing seller both of whom are in possession of all information relevant to the transaction. That definition doesn’t characterize doctor-patient interactions, and it also doesn’t characterize the health insurance “marketplace.”

Even if you assume that all citizens understand the complexities and “fine print” of the policies offered by health insurers, that they all understand the technical terminology employed and are able to make considered opinions about the nature and extent of their desired coverage, you are left with several major problems that cannot be solved by “market magic.”

First of all, most Americans get their health insurance through their employers. They don’t get to participate in the choices involved. (This coupling of insurance and employment is problematic for lots of reasons unrelated to the subject of this post; for one thing, it makes American businesses less competitive in the global economy. But that’s a subject for another day.)

Second, significant numbers of people who do not get their insurance through their jobs–either because they don’t have jobs or their employer doesn’t offer it–cannot afford the coverage they need. (That’s why we have Medicare and Medicaid.) In the U.S., non-governmental health insurance policies are priced to cover expenses that include not just the expected payouts to providers, but the costs of marketing, profits and taxes. Private insurance overhead also includes very substantial salaries paid to insurance companies’ management, costs not incurred by Medicare and Medicaid. Last time I looked, Medicare overhead averaged around 3% while private insurance overhead averaged around 24%.

Third, and most important: markets, by definition, are voluntary. (That “willing” buyer and seller…). Insurance works by spreading risk. If younger, healthier people decide they aren’t “willing” buyers–if only the elderly and sick and people with pre-existing conditions participate in the market–the whole system comes crashing down. Insurers have to charge higher and higher premiums, and policies become more and more unaffordable. That’s why the ACA’s mandate was an essential part of the law.

If we accept the premise that access to healthcare is a human right–and I am well aware that most Republicans do not accept that premise–then people who cannot afford insurance must be subsidized. For the reasons I’ve listed, providing access through “market forces” would add enormously to the costs of the insurance and thus to the amount of the subsidies.

There is a reason other developed nations have pursued a variety of ways to nationalize health insurance; it’s the only way to make universal access cost-effective.

When you deconstruct Paul Ryan’s rhetoric about giving people the “freedom” to go uninsured, and the GOP’s reverential references to “market economics,” what you get is what the Congressional Budget Office described: millions of Americans losing insurance entirely, and millions of others paying much more for much less coverage.

Eventually, Americans are going to have to decide between a system like “Medicare for All,”  that pays for actual healthcare, and our current, unsustainable and immensely more expensive insistence upon subsidizing the bottom lines of Big Insurance and Big Pharma in the name of “the market.”

The purchase and sale of health insurance in today’s U.S. can be called many things, but a genuine market isn’t one of them.


  1. Sheila this is perhaps the most succinct and common sense summary on the subject I’ve come across in quite some time. Thank you!

  2. A country as well resourced as the USA should be able to solve a problem like universal health care. Many other less advantaged countries managed it just fine.

  3. Seems Mr Rep,has all the answers..Not,,, as a typical blue collar working class, and drives a truck, Ive never had health insurence via,employment. And you thought we made a decent wage,eh? try the same wages as 1986, and dont even, get a job trucking,its a road to poverty for new hires. My wife of 35 years has had a few jobs were insurence was available,she broke her arm riding her horse on the trail, we paid for the whole thing,we had a policy with, most were, we were offered one thru a colorado funny named company,via employer, it was more of a scam than a plan..and we wonder why the ACA was created? My typical point here in discussion with othrs isnt the cost of this ACA ,but why we cant afford it? Im really on a rail here about wages. if we watch the growing point system of the dow, and nas,foots,hong,etc, we see global growth,by the working class,and we see little afforded us,for all the work we do.instead its a common theme to ignore the working class, kinda like china, its a slave mentallity,and its blossomed in America. When we signed off on the free trade agreement for china to gain access to the world markets, the business world here saw the biggest exploitation of labor in the modern world, and now, we are the casulties of this manmouth plan. We the working class has been pigeon holed to be economic slaves to society,and its growth. Flat wages are just that,flat,as are the taxes paid in. we have grown in economic size for 37 years,and our wages remain flat.the rich, theones who, feel they invested in this growth should remain the primier takers in this game,ignoring the ones who really sweat this one out. If the fall out of 2008 didnt tell us something about banks and greed, we missed a point, they can and will, screw us,and take anything they want,with congresses approval. after all, congress allowed the distruction of wage growth,pension and retirement plans,and never gave a second look at who earned that money,and who it belonged to. no excusess here, its fact, we the working class are mere economic slaves to America,and like china, we have nothing to say about it unless wall streets gods deem so. if you have investements on wall street, great, it was earned by the working class so you can have a great future off our backs. sure we can invest,but, i dont invest on a gamble, thats for cheap flights to vegas. if we the working class cant save enough to retire,and keep social security solvent, then we dont have a government for the people,but,against the people. its not had to ask for secuirty from the richest nation in the world, we earned it,its a fact, we died protecting America,in wars and on the job,and many will work to the death,without America.. wall street merely wants to control the money,all of it, now,tell me im wrong….good day?

  4. Jack Smith you are absolutely right on. For-profit entities such as Wall Street financiers, Big Corporations and Big Pharma indeed do want ALL the money and power. They could care less about ordinary citizens unless itʻs to get us to buy something (from them). Die-hard republicans will not admit that the myth of “trickle down economics” is a sham and are still to this day pushing for more deregulation to make ever higher profits. The wealthy mostly keep their money. They are not going to do us regular folks any favors and “invest” in American businesses, factories or otherwise. The bulk of their money is squirreled away in secret off-shore bank accounts where they cannot be taxed by the IRS. The only way to get more Americans into healthcare coverage is to take the profit out of the system. Thatʻs why itʻs so much cheaper to run in other countries, as Sheila points out. While we are at it, we also need to abolish for-profit prisons. Thatʻs a money-making scam if there ever was one, and at the expense of so many lives. Itʻs the modern form of exploitative slavery legalized for maximum profits. Keep shifting peopleʻs perception to the reality that “regulations are protections.” The way republicans make regulations sound like some horrible impingement on “our” freedoms has brainwashed a whole generation of working class who now identify with the so-called “blue-collar billionaires” like The Donald. How twisted is that.

  5. With no regulations on all levels; anything regarding health care costs have soared for years, long before the ACA was a twinkle in President Obama’s eye. Health care coverage has been approached and rejected for years by all levels of government, both parties at fault, and the fact that our first Black president got at least a “foot in the door” with ACA, has rankled the Republican party since before he approached the issue. President Obama has stated from the beginning that there are problems within the ACA which need to be addressed – by both parties – but there will never be one perfect solution to this, or any other human issue. Meetings were held, committees were formed and Republicans were asked to participate but they declined. Including sections in the ACA which were authored by Republicans under George W. didn’t appease them…but nothing from the Democratic party is acceptable.

    Previously expensive prescription medications became available over the counter (OTC); touted to be for the benefit of the public needing but unable to afford them. Oh please; they became OTC to remove them from coverage by health care insurance. Big Pharma still manufactures these medications; the lower costs made them available to more people so they lost little profit by doing this and insurance companies make a huge savings.

    Primary physicians no longer practice actual medical care but are information and referral sources to expensive, often unnecessary specialists. Some still hand out prescriptions for what are now available OTC, Ibuprofen is one of them. Or they prescribe highly addictive medications, adding to the current opoid epidemic. I saw a news post on MSNBC yesterday “announcing” the newly discovered fact that doctors, hospitals and Big Pharma are the cause of most of these addictions. Bernie Sanders and Chris Hayes aired a one-hour special a few months ago on that issue in a small area of West Virginia. MSNBC needs to rerun that program. Cutting fund to or closing Planned Parenthood Clinics cut many off from any form of health care testing or treatment.

    Health care coverage, providers and Big Pharma NEED to be regulated because they have run amok; if Trump, Pence, McConnell and Ryan get their way with Trumpcare, people will begin dying at a much faster rate. Then the funeral business will raise their already high costs due to no regulations over them. Dead or alive; we will be the source of wealth for the already wealthy.

  6. Even if you have great health insurance, it is in the insurance company’s interest to deny coverage for what you submit. Since profit is the bottom line, the goal is to take in premiums and pay out as little as possible.

  7. I apologize that I can’t put my finger on the source right now, however, ALL but one of the G-20 countries have fashioned their national health insurance regimes based partly on a study done many years ago by economists who demostrated in their research that open markets for health care sevices themselves perform very poorly, but NOT because of the complexity of insurance or the additional role the employer often plays in the process (although they do exacerbate the problem).

    Rather, it is because there is such a tremendous information and knowledge disparity between the medical provider (doctors) and the patient, and often in a setting of high emotional distress (brought on by trauma or a life-threatening disease). This puts the provider in the economic exchange at such a significant advantage that, when you add up millions of such interactions every day, it results in very poorly performing markets for medical services – even dysfunctional.

    The Republican legislator Sheila cited is not irrational. He is delusional. Even Taiwan, a libertarian’s dream for its unfettered and unregulated markets, realized this in advance of building its own national health insurance program.

    The fact that US and state legislators and policy makers cannot come to grips with this reality I feel is rooted in the same irrational anti-science and anti-intellectualism that has swept our society and also a loud pudgy and corrupt sweet potato into the highest office in the land.

    Below is a link to a recent article by Ed Dolan on Vox outlining a hypothetical approach to health insurance called Universal Catastrophic Care (UCC), based on writings and proposals of many conservative thinkers and policy-makers.

    This begs the question that if it is such a good idea why haven’t conservatives advanced it as a reasonable alternative to both ACA and Medicaid??

    In addition to the delusions mentioned above of many of our legislators (mostly on the right but the left has their delusions as well) I would suggest thee reasons:

    1) As is well-known and documented ACA itself was based on a blueprint advanced by a paper written by the conservative Heritage Foundation and later implemented by a Republican governor in Massachusetts. But because it was implemented nationally by a black intellectual Democrat President and a Democrat-led Congress, Republicans are happy to eat their young as well as their conservative principles to reassume power and maintain it.

    2) our country and its democratic processes are simply incapable of anything but incremental change, except in times of great national crisis (an attack on our soil or a Great Depression).

    3) Our legislative representatives (Dems AND Repubs) are no longer elected to govern for the greater welfare of their constituents but are elected to represent the special interests that finance their campaigns.

  8. Speaker of the House of Reprobates Ryan made a similar statement a short time back. The bill guarantees ACCESS to health care and if people don’t want it, it isn’t wingnuts fault.

  9. So given the insights of a range of Americans on this issue–see above for a good sampling–why, Sheila and others, are Republicans in Congress and state legislatures so incapable of recognizing the fallacy of “marketplace” health insurance? Why do we count on the fingers of one hand the Republicans in Congress willing to speak out against Mitch McConnell’s absurd plan? (I think he is more dangerous to this nation than Trump and he has been in power for years.) And do we even have very many Democrats in Congress who understand the need for radical change, other than Bernie Sanders? Because the ACA (which I have supported despite its major and glaring flaws, because it has literally saved lives and given people their health back) was overly complex, cumbersome, and compromised from the start. Americans seemed irrationally frightened of anything resembling “government health insurance” or “government health care” (despite the fact that it already existed through Medicaid, Medicare, and the VA). After all these years of the ACA, I think more and more Americans are getting over that fear. So we citizens must demand of our elected representatives a sane, thoughtful reform of health insurance and health care.

  10. Steve; I saw AGAIN where Trump has threatened to use PAC to post negative campaign ads for Republican Senators who do not vote for his health care bill. I believe he must be holding something much more powerful over their heads because the last thing the Republican party wants is to lose any elected seat in Congress…negative campaign ads from him should be an empty threat to THINKING Republicans and Republican voters who are against his idea of health care.

  11. Just a couple of additional thoughts (whole books have been written on this subject so we have to pick and choose our issues in a forum like this). First, with respect to the cost of drugs, an economist (Dean Baker) has estimated that if drugs were priced competitively (i.e., as generics with competition) we would spend more than $300 billion less on drugs in this country than we do today. We do not have a “free market.” This is due to our intellectual property laws (long and strong) which create monopolies resulting in very high prices. We do this to finance the development of new drugs but (a) a lot of breakthrough drugs are discovered in Universities under government contracts (and then commercialized) and (b) we get only a fraction of the research investment relative to the extraordinary cost of granting monopoly status.
    Second, most countries have a mechanism for setting health care prices on a national or regional basis. Except for government programs, our prices are determined in negotiations between literally hundreds of insurers and thousands of providers. In most markets, provider consolidation tips the balance toward higher prices. But the cost of all of this added administrative complexity (insurers have thousands of contracts to negotiate and administer and providers have scores of payers to negotiate with and collect from) leads to an extraordinary administrative cost burden – estimated to be a high as $600 billion.
    Single payer would address this dysfunction and provide a countervailing force on the Rx front.

    Finally, the unbalanced income distribution was mentioned above. Although this is broader than today’s focus, we are beginning to understand that our trade policies have exacerbated the problem. We have put our middle class in competition with most of the world while protecting many professions (i.e., physicians) and companies (pharma) from similar competition. In this sphere, winners and losers are determined by policy, not by impersonal market forces.

  12. Excellent summary Professor! Spot on. Thank you. I’ll bookmark this post for future reference when needed.

    And this summary forced me to look up that quote that I keep repeating in my head whenever I hear this ACA debate:

    You can always count on Americans to do the right thing – after they’ve tried everything else. Winston Churchill

    Seriously, we need to get our s*it together and do the right thing for our citizens, our humans. Single Payer for All.

  13. President Herbert Hoover thought that free-market enterprise would solve all economic problems in 1929-32 too. Guess how that worked out. It’s the same thing today. The utter contrivance of supply-side economics has poisoned American capitalists with the delusion that they’ll all get rich. They have NEVER considered those who make them rich. This is the sole reason why we are the only major economy in the world that does not have universal health care.

    Whereas, the rest of the world doesn’t blink about investing in their people for education and health care, we keep making up fantasies that denies our citizens these rights. They are NOT profit centers. Stupidly, the bottom-line mentality has missed the point entirely: Healthy, educated people make and spend more money than the sick and the ignorant.

    Why is this lost on so many? The quarterly report of corporate/banking America, that’s why. Our “business” schools teach the wrong model.

  14. Joseph E. Stiglitz, one of my favorite economists, won a Nobel for exposing the fiction that market economics involve a willing buyer and seller in a free market where both have access to all the information to make a good choice. They don’t, and never have, contrary to assumptions to such classical economists as Adam Smith.
    I have never understood the role of ever having insurance companies involved in health care. It is so clear and demonstrable that single payer works for all and at less costs for more coverage that I will not repeat the obvious. Insurance companies are the horse and buggy culture in this equation and single payer is the motorcar. Like most if not all civilized countries, let’s usher in the motorcar. It is long past time, and as for the young folks, they don’t understand that the whole concept of insurance is mutual risk, and apparently don’t understand that they will be older someday and wish the young folks of that time were contributing to the pot. Raise by five times what old and retiring people must pay just when their incomes are curtailed and their health is statistically more at risk? Insane! Let’s get on with single payer and end this nonsense.

  15. Gerald; insurance companies involved in health care SHOULD provide “insurance” as your homeowner’s does if your house burns down and vehicle insurance if you total your vehicle. “Hedges against the night.” To “insure” there is money available to pay for your loss…or condition in the case of health care. Rather like a savings account for emergencies. Notice I said SHOULD. Greed took the humanity out of health care; I’m 80 so I can remember when it actually was a help when needed. Of course, at 80, I can even better remember when medical bills were affordable, you could make payments on the rare big bills such as hospitals, etc. My first baby in 1956 only cost us $500; he was a bargain at twice the price.

  16. H.R.676 Expanded & Improved Medicare for All Act – health care that includes all medically necessary care, such as primary care and prevention, dietary and nutritional therapies, prescription drugs, emergency care, long-term care, mental health services, dental services, and vision care. HR 676 was sponsored by John Conyers (D-Mich). There are now 114 Co-Sponsors all Democrats. However, the Democratic Leader Nancy Pelosi is NOT a Co-Sponsor.

    There are examples and models in the world of other systems. Canada, France, Germany and Japan all have health care systems that are less expensive than ours and life expectancy from birth is better in these countries.

    CNN and MSNBC have devoted virtually all of the air time to the Trump and Russia theme. If healthcare is mentioned at all, it relates to how bad the Republican Plan is. It would appear the only retort from the Democratic Corporate Establishment is to save ACA-Obamacare. Joe Donnelly is good example, his website is just a bunch of garbage about healthcare, glittering generalities, platitudes and cliches – no specifics.

    An Indiana senator and longtime critic of outsourcing jobs to foreign countries announced Friday that he’s selling his stock in his family’s arts and crafts company after The Associated Press reported it manufactures some products in Mexico.

    Americans are not really receiving the whole truth concerning the options that exist throughout the world to the system we have and the Republican Plan.

  17. A close to home, simple reason that it’s long past time for universal mandatory health care – either single payer and/or highly regulated private insurance affordable to all – is that we already have laws that say a hospital can’t turn away anyone who needs help. That means that anyone who shows up in an overcrowded, underfunded ER, must be cared for, and the money for that has to finally come from the taxpayer, through circuitous routes that are hard to monitor. If you let hospitals turn people away, no matter how sick, for whatever reasons they choose, (Untrendy clothes? Darker skin? An accent? Too old? Too young? Bad grammar? Big hair? Thin wallet?) then people who can afford it will buy insurance and get care, and everyone else can die on the hospital steps. This would be the hard right Libertarian wet dream. If, on the other hand, you require hospitals to save anyone who shows up, as we do and have done for years, then you better have an efficient way to fund those hospitals, medical personnel, drug and device providers. Because unfunded mandates are a no no. An efficient system also means reasonable costs, prophylactic care, all the medical stuff that makes the system really work. For years we have had 1 part of the equation without the other. Getting funding for medical anything is more like a crapshoot rather than an accountable plan. (Lottery anyone? Education gets to fund by crapshoot too. That’s 2 huge elements for future security – both underfunded – Health and Education.) Since the pursuit of happiness is enshrined in our founding documents, and it’s pretty hard to carry that out if you’re going bankrupt or croaking on the hospital steps, I would argue that universal health care is now, and has been historically accepted by society as a basic right. The fact that for years, hospitals have had to meet the needs of all comers, suggests that legally, healthcare is absolutely considered a basic right in the US. Unless you are in favor of medical personnel going bankrupt, to care for bankrupt patients, it’s time to accept that we all pay for health care, just as we pay for roads, and defense (whether we like it or not), and should pay for education. They are some of the dues you pay for civilization. Civilization allows you to live where you can grow a business, and support your family. It really is ‘All for one and one for all’. You could even argue that a healthy population is a matter of national defense. Drop the FICA caps, open up Medicare for all, and make the system better, for a change.

  18. Joslyn makes an important point: anybody who shows up at a hospital ED must be cared for no matter their ability to pay. They can be billed, they can be sent to collections (and into bankruptcy) if they are unable to pay, but they must be stabilized — they do not have to be cured. Until the ACA hospitals were largely not reimbursed for this care and smaller hospitals around the country were beginning to close.

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