Insurance Is Redistribution

Everybody’s talking this morning, as they should, about Jonathan Cohn’s article at TNR explaining exactly who benefits from and who pays for the improvements made in the Affordable Care Act. You should read the whole thing, but the “winners” are basically low-to-moderate income people with health conditions and the “losers” are for the most part the very wealthy and some elements of the health care industry (including the insurers providing private Medicare Advantage policies).

Yes, some of the institutional costs will be passed on to consumers, but the extent to which that will happen is the subject of sharp and ancient ideological differences over the extent to which corporations and the wealthy are able to pass on costs.

Cohn’s piece is meant to answer and contextualize the conservative argument that Obamacare is “redistributive.” Of course it is. But so, too, is insurance itself, by its very nature: risk pools are designed to cushion losses for the unlucky by tapping the resources of the lucky. Obamacare is mainly a significant expansion and regulation of the risk pool for private health insurance, so the number of unlucky folk benefitting and lucky folk paying more than they immediately get back will be increased.

I’ve often observed that conservatives these days seem to be in revolt against the very idea of health insurance, preferring schemes that encourage people to pay for health costs out-of-pocket like they did in the 1940s or so. Most GOP “reform” proposals now basically focus on pushing people from large-group into individual insurance markets, and then where possible out of insurance altogether. That does indeed reflect a hostility to “redistribution.” But if pursued consistently, it’s a hostility that would lead Republicans to fundamentally oppose the very existence of Medicare and Medicaid, along with the tax subsidy for employer-sponsored health plans.

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Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.