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Hoisted from the Archives (2007): My Review of Alan Greenspan's "The Age of Turbulence"

Monday 10 AM: U.C. Berkeley: Panel on the Supreme Court's Health Care Decision: What Next for Health Care Reform?

Come one, come all… Monday July 2nd, 10 AM to Noon, Berkeley Law School at Boalt Hall, Room 132:

Ann Marie Marcarille's Powerpoint:

Ann Marie Marciarille's Powerpoints: Download 20120702 Ann Marie Marciarille ACAatSCt | key | ppt

J. Bradford DeLong's Powerpoint:

Brad DeLong's Powerpoints: Download 20120702 Berkeley ObamaCare Event (pdf) | key | ppt

Panel Audio: Berkeley ACA SCOTUS Panel


  • Robert Reich, Chancellor's Professor of Public Policy, U.C. Berkeley, quondam Secretary of Labor
  • Moderator: John Ellwood, Professor of Public Policy and Program Director of the Berkeley/UCSF Branch of the Robert Wood Johnson Foundation Research Scholars in Health Policy Program, U.C. Berkeley
  • Jesse Choper, Earl Warren Professor of Public Law, U.C. Berkeley
  • Steve Shortell, Dean of the School of Public Health, U.C. Berkeley
  • J. Bradford DeLong, Professor of Economics, U.C. Berkeley
  • Ann O'Leary, Director, Children and Families Program, Center for the Next Generation
  • Ann Marie Marciarille, Associate Professor of Law, University of Missouri at Kansas City

What I am going to say: first draft:

One piece of background is all-important in assessing last Thursday's decision.

ObamaCare is RomneyCare.

The health-care reform plan that Mitt Romney proposed when he was Governor of Massachusetts, and shepherded through the Massachusetts legislature is the health-care reform plan that Barack Obama proposed and shepherded through the U.S. Congress.

RomneyCare made it through the Massachusetts legislature with only two dissenting votes. RomneyCare made it through the Congress with not a single Republican vote in favor. No Republican made audible complaint that RomneyCare was bad policy, or would destroy the economy, or would be unconstitutional at the federal level, or whatnot--not as long as it was the signature policy initiative of a Republican governor who might well become president someday.

But when the same policy became the signature policy initiative of a Democratic president, every single Republican in office changed their mind.

Some Republican officeholders claimed that they had always been opposed to RomneyCare--but had just kept quiet because of Ronald Reagan's 11th Commandment: "Thou shalt not speak ill of a fellow Republican".

For the most part, however, Republican officeholders claimed that they had not changed their minds. When a state government requires people to buy insurance, they said, that is Gan assertion of the Conservative Principle of Personal Responsibility. But when a federal government requires that people to buy insurance, they said, that is Bad Big Government, the Liberal Nanny State, and unconstitutional. Never mind that the centerpiece of the Bush 2005 Social Security privatization proposal was an individual mandate to regulate "inactivity": to require that people who had not established their own private individual retirement accounts do so.

Go figure.

Of all the justices who claimed that the individual mandate exceeded Congress's Commerce Clause powers last Thursday, only Justice Thomas would have reached the same conclusion had the issue reached them in the form of a challenge to a Republican president's policy mandating the purchase of retirement accounts rather than a Democratic president's policy mandating the purchase of health insurance: Kennedy jointed and Alito and Roberts endorsed Scalia's opinion in Gonzales v. Raich holding that the Commerce Clause allows Congress to take away from cancer patients pain-relieving marijuana that they have grown themselves. Larry Lessig had a piece a couple of months ago about how his patron Scalia's Commerce Clause jurisprudence was principled, and he would uphold the law. Larry Lessig has a lot of explaining to do. Akhil Reed Amar said a couple of weeks ago that if the Court did not uphold the ACA under the Commerce Clause that his career had been a waste--that he ought to have been doing constitutional law not as an autonomous discipline but as a subbranch of political science.

Both Lessig and Amar really ought to have taken as their model not Alex Bickel but Fred Rodell.

Indeed, that ultimate legal realist Fred Rodell would have been shocked and astonished by last Thursday. In past Constitutional Moments--Miranda, Brown, Jones and Laughlin, Lochner, Dred Scott, McCulloch vs. Maryland, Marbury vs. Madison--the stakes had been partisan, yes, but they also had been moral, and properly political: decisions on deep questions about what kind of country America is going to become are made when the Court rules that the law is different today from what it was yesterday. When the original Four Horsemen--never mind that McReynolds, van Devanter, and Butler begged Herbert Hoover not to appoint Cardozo because Brandeis was already one kike too many on the court--struck down New Deal legislation, it was because they thought America should not become a social-democratic country.

But this time it is our New Four Horsemen--supposedly market-oriented Republican justices who have struck down RomneyCare: an approach supported by the market-oriented Republican presidents who appointed them--an approach thought up by market-oriented Republican ideologues and developed by market-oriented Republican health care experts to be the market-oriented Republican minimal state intervention to make the health-insurance market work and thus preserve its market-oriented character. Fred Rodell understood that supreme court justices were for the most part moral and political actors first and text- and precedent-oriented legal technicians second. Fred Rodell would have been astonished by judges who were for the most part neither precedent- and text-oriented legal technicians nor moral and political actors but mere partisans.

One piece of background is all-important in assessing what will happen to healthcare reform in the future.

ObamaCare is RomneyCare.

It thus has all the weaknesses of RomneyCare. It does not allow us to conduct the experiment of whether people under 65 would find a Medicare-like public option better on price and quality grounds than bargaining with private insurance companies under the exchange framework: the public option has been excised. It hands a great deal of market power to near-monopoly insurance companies in thinly-populated states--it removes the curb on their ability to raise rates provided by the existence of the option for individuals to exit the insurance system, go naked, and rely on emergency rooms. It requires that state-level bureaucracies be functional and effective when many states' politicians have laid down political markers that the reforms will fail. It relies on a bet that Medicaid can grow by 2/3 and still attract enough doctors and nurses and technicians to service its population even with its low and sub-market reimbursement rates. A substantial hole has just been blown in its structure by the other lawless piece of the decision--the Court's granting of states some kind of entitlement to past levels of Medicaid funding. And its long-run cost-saving and efficiency-increasing provisions rely on six largely untested bets:

  1. That Congress will stick to its guns and actually implement the tax on high-cost health plans--which is, over the next two decades, a slow repeal of the much-loved tax preference for employer-sponsored health benefits.

  2. That Congress will stick to its guns and allow the IPAB to recover the reimbursement system for doctors from the groups of specialist who have currently captured it.

  3. That the bet on evidence-based medicine and comparative-effectiveness and electronic medical records will bring cost and quality in the U.S. as a whole within shouting distance of best-practice found in the Mayo Clinic.

  4. That large for-profit providers and sociological groups of practitioners will not find additional ways to game the system and acquire large amounts of unconstrained market power.

  5. That demand will create its own supply--that we can double the amount of health care currently received by 40 million of our presently-uninsured without demand for care outstripping the ability of our doctors, nurses, and technicians to provide it.

  6. That the insurance market reforms will work--that the exchanges will function as, effectively, one large benefits department for those who do not work for large bureaucracies, and deliver high-quality insurance options at an affordable price.

Bets (1) and (2) are bets on us: on what kind of future congresses we are going to elect. The preliminary evidence from RomneyCare in Massachusetts on (3) through (6) is very hopeful--but the dive was less difficult in Massachusetts, and the success of RomneyCare in Massachusetts is only preliminary.

I am hopeful but worried.

I really wish there were a public option in the mix.

I still don't understand why they didn't simply do FEHBP for all: allow everybody to buy in to the federal employees' health-benefit program if they wished.