Yuval Levin tackles a topic that continues to perplex Republicans.
Sometimes in politics, you win not by changing the world but by changing the subject. That’s how the Democrats won this fall’s government shutdown.
It didn’t look like a win for them at first. Progressive activists and many Democratic members of Congress fumed at their leaders for failing to draw any substantive concessions from Republicans. But when the dust settled, the concrete results of the shutdown were three more months of Biden-era spending levels and a healthcare debate that would stretch toward the midterm elections.
Reigniting the healthcare debate was a triumph for Democrats, since healthcare is Republicans’ worst issue and greatest vulnerability. This has been true for two decades. Republicans have struggled to reach an internal consensus on health policy since George W. Bush’s second term, because the economics and politics of healthcare have never lined up well for them.
The economics of healthcare, like the economics of just about everything else, works best when consumers use their spending power to compel providers to offer higher-quality coverage or care at a lower cost. Give American families genuine options and the freedom to choose among them, and the competition for their dollars will push hospitals and insurers toward efficiency.
Of course, medical care is not like other commodities. It involves life-and-death situations that threaten the people we love, there are enormous knowledge gaps between providers and consumers, and the most urgent and important services are often very expensive. That’s why we want to purchase insurance in advance, rather than directly buying care. And it’s why it makes sense to subsidize coverage for people who can’t afford it. That could be done in line with the economic logic of healthcare by using subsidies to give everyone the resources to enter competitive insurance markets as consumers making choices.
But this is where politics gums things up. The fact is, most of us don’t actually want a lot of choice when it comes to healthcare. We just want to believe that everything is paid for. That creates an incentive to hide costs by routing most payments through insurers or government, which sustains the illusion that everything is free to the consumer.
