Noonan’s confusion

NOONAN’S CONFUSION…. The Wall Street Journal‘s Peggy Noonan argues in her column today that President Obama could have had more success pursing a less ambitious health care reform bill.

In a way Mr. Obama made the same mistake President Bush did on immigration, producing a big, mammoth, comprehensive bill when the public mood was for small, discrete steps in what might reasonably seem the right direction.

The public in 2009 would have been happy to see a simple bill that mandated insurance companies offer coverage without respect to previous medical conditions. The administration could have had that — and the victory of it — last winter.

Instead, they were greedy for glory.

It’s hard to overstate how incredibly wrong this is. The most obvious problem is that the president and his allies weren’t “greedy” at all — they gave up on single-payer before the process even started, and then compromised away several important elements in order to get it through Congress. The reform package — like Social Security and Medicare before it — is poised to be both a landmark achievement and a modest, moderate step forward.

But on a more fundamental level, Noonan’s argument suggests she hasn’t paid very close attention to the policy debate. As the former Reagan speechwriter puts it, all Obama should have done was prevent insurers from discriminating against those with pre-existing conditions. At that point, presumably, the president could declare victory and move on to the next subject.

Except, her proposal doesn’t make sense. Paul Krugman explained today:

Start with the proposition that we don’t want our fellow citizens denied coverage because of preexisting conditions — which is a very popular position, so much so that even conservatives generally share it, or at least pretend to.

So why not just impose community rating — no discrimination based on medical history? Well, the answer, backed up by lots of real-world experience, is that this leads to an adverse-selection death spiral: healthy people choose to go uninsured until they get sick, leading to a poor risk pool, leading to high premiums, leading even more healthy people dropping out.

So you have to back community rating up with an individual mandate: people must be required to purchase insurance even if they don’t currently think they need it.

But what if they can’t afford insurance? Well, you have to have subsidies that cover part of premiums for lower-income Americans.

In short, you end up with the health care bill that’s about to get enacted. There’s hardly anything arbitrary about the structure: once the decision was made to rely on private insurers rather than a single-payer system — and look, single-payer wasn’t going to happen — it had to be more or less what we’re getting. It wasn’t about ideology, or greediness, it was about making the thing work.

I get the sense from Noonan’s column that these pesky details don’t matter. Like too many Republicans, making effective policy through sensible lawmaking just isn’t that important.

Worse, Noonan went on to argue that the president put health care above the economy and national security — which is as offensive as it is ridiculous. As Andrew Sullivan explained, “Noonan’s column is a fantasy, a dream, a weird incantation of a thesis that is merely how she feels, without any substantive relationship to reality.”