Policy: getting there from here

I was having a discussion today with a friend about McCain's health plan, and its purported goal of breaking the link between employers and health care provision. This is a good thing to do, but I'm not sure it will happen. I suspect that if the McCain plan passed (a damn slim chance), what you'd see is a benefit going to some of the more affluent self-employed, while most people continue to purchase health insurance from their employer with their now-individualized tax subsidy.

The problem is, because of the subsidies, the market for individual insurance is very thin, and the market for employer insurance is extremely well established. There's also a very strong social expectation of getting insurance from your employer. Removing the subsidy might eventually create a more robust individual market, but at the very least, I expect it will take a really long time.

Ignoring institutional inertia is a general problem with policy theorizing. It's certainly not limited to libertarians--all the liberals I hear talking about national health care seem to imagine it being implemented in a magic fairyland where the AMA and the AHA have not developed gigantic lobbying arms in order to more effectively siphon cash from Medicare. This enables them to design a perfect system based on cherry picking their favorite features from each European country, rather than working on the assumption that whatever we get in the future is probably going to look very much like what we already have.

It is good to develop ideal frameworks--I certainly have a lot of my own. But the problem with shiny, perfect framework is that it's easy to become so dazzled with it that you ignore the actual political landscape in front of you. It takes a hell of a scorched earth battle to get that space clear enough to build from scratch.

Presented by

Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

Never Tell People How Old They Look

Age discrimination affects us all. Who cares about youth? James Hamblin turns to his colleague Jeffrey Goldberg for advice.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Never Tell People How Old They Look

Age discrimination affects us all. James Hamblin turns to a colleague for advice.

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

Video

Pittsburgh: 'Better Than You Thought'

How Steel City became a bikeable, walkable paradise

Video

A Four-Dimensional Tour of Boston

In this groundbreaking video, time moves at multiple speeds within a single frame.

Video

Who Made Pop Music So Repetitive? You Did.

If pop music is too homogenous, that's because listeners want it that way.

More in Business

Just In