FFF: Obamacare Reform and Paternalism’s Pratfalls

Future of Freedom Foundation

Obamacare Reform and Paternalism’s Pratfalls

by James Bovard

One of Donald Trump’s first actions as president was to issue an executive order to reduce the regulatory burden of the Affordable Care Act. Obamacare has been intensely controversial since it was enacted in 2010. The battle over its reform or replacement will very likely continue for most of this year, if not most of Trump’s term in office. It remains to be seen how much effort the Trump administration will make to repeal, replace, or reform Obamacare.

While the media often portray Obamacare as a holy humanitarian rescue mission, it has profoundly disrupted millions of Americans’ health care, while sharply inflating health-care costs for more millions. Obamacare is the most prominent paternalist policy in recent decades. Any evaluation of whether it can be fixed should begin by considering the limits of paternalism.

The word “paternalism” originally referred to a father’s power over his children; contemporary paternalism means governments treating citizens like children. The more paternalist policies are adopted, the further the citizenry is infantilized. As children grow older, they acquire more autonomy and are less restricted by their parents’ rules and values. In contrast, the welfare state piles rule upon rule, edict upon edict — and the only certainty is that citizens will be presumed less competent in the next decade than they were in the previous decade.

Law professor H.L.A. Hart defined paternalism as “the protection of people against themselves.” According to Donald VanDeVeer, author of Paternalistic Intervention, “A paternalistic act is one in which one party interferes with another for the sake of the other’s own good.”

The paternalist state advances by multiplying its levers over private behavior. These levers are enforced by government penalties: the more the government claims to protect citizens, the more it must punish them. Yet, at some point, the sheer number of threats government makes, supposedly to protect the citizen, destroys the citizen’s “domestic tranquility.” This is the vicious cycle of paternalism: the more power the government acquires to control people, the more the citizen naturally fears the government.

Paternalism offers the social-economic equivalent of happiness through political conquest and obedience — happiness by surrendering the keys to one’s own life to one’s political overlords. The goal of the welfare state is not to make people happy, as people themselves understand their own happiness; instead, it is to make them “happy” in ways their superiors think they should be happy. According to philosopher Hans Kelsen (one of Friedrich Hayek’s nemeses), “happiness in an objective-collective sense” means “the satisfaction of certain needs, recognized by the social authority, as needs worthy of being satisfied, such as the need to be fed, clothed, housed, and the like.” Thus, the “social authorities” (i.e., government employees) are granted sweeping discretion to decree which desires or aspirations of private citizens are “worthy of being satisfied.”

Democratic Party leaders in the Congress and the White House decided that people could not be — or deserve to be — happy unless they had health-insurance policies that the feds approved. For instance, Obamacare is driven by the heavy penalties on anyone who fails to purchase insurance policies that satisfy federal overseers ($695 per adult or 2.5% of annual income, whichever is higher). Punishing people was a nonissue for the Obama administration and the vast majority of Obamacare supporters. Anyone penalized by the feds is irrelevant as long as politicians can boast that a single additional person received government-subsidized insurance — at least according to some of the liberal and media scorekeepers.

The more power government acquires over people, the more the system of governance rests on a blind faith in the rulers’ benevolence. Paternalism presumes that government will serve the people even better than the people could have served themselves. And why? Because government knows best. But that means nothing more than “government employees know best.” And why do they know best? Because they work for the government.

And even if they don’t know best, as long as their pretenses are accepted, politicians can seize far more power over citizens. When Congress considered Obama’s proposed health-reform legislation, the highest-profile expert it relied on was Jonathan Gruber, who was christened “the Oracle of Obama-care.” Gruber received a $297,000 federal contract to help lead the legislative charge for the Affordable Care Act with his “black box” computer program. The Washington Post reported that “Gruber and his staff of three could provide answers overnight, when it often took weeks to run the same questions through the Office of Management and Budget or the Congressional Budget Office.”

The biggest paternalist coup of the last half-century required vast deception. Gruber explained in 2013 how Obamacare was sold to the public: “Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically, that was really, really critical to get this thing to pass.” Gruber admitted that the Obamacare “bill was written in a tortured way…. If you had a law which … made explicit [that] healthy people pay in and sick people get money, it would not have passed.” Gruber described one Obamacare provision as a “very clever basic exploitation of the lack of economic understanding of the American voter.” The bill also exploited congressmen’s feeble grasp of the issues but it would have been undiplomatic to mention that. Once politicians decided to brag about the increase in the number of Americans with health insurance, the odds of rational policy that respected citizens’ rights took a dive.

Paternalism delivers happiness via an iron fist. People pursue happiness, governments impose happiness. Paternalism presumes that people will be happier doing what they are told than what they choose to do. Kant declared, “Nobody may compel me to be happy in his own way. Paternalism is the greatest despotism imaginable.” Kant based his ethics on the moral value of each person as an end in himself; paternalism necessarily sees people as plug-ins to fulfill political visions and bureaucratic timetables. Once paternalism gets rolling, individual preferences cannot be allowed to delay the official advance of progress. Whole-wheat bread is more nutritious than white bread, but would that be justification for the government food police to go into each recalcitrant’s home, seizing his white bread, and jamming whole wheat bread down his throat? The damage done by forcing even healthy morsels down someone’s throat — in all but extreme cases, in which the beneficiary is on the verge of death — will almost certainly exceed the nutritional benefits of the food itself.

The people must be subdued before they can be saved. That is why the Obama administration issued more than ten million words of regulations and regulatory guidance for the Affordable Care Act.

Maximizing submission

Paternalism is also often the enemy of the rule of law and democracy. Once Obama got his signature bill pushed through Congress, he acted as if he was entitled to issue endless decrees to buttress it politically. One of the most controversial “reforms” consisted of bankrolling insurance companies to deter skyrocketing premiums. On January 13, 2014, a group of IRS financial managers were summoned and escorted into a conference room and permitted a peek at a secret Office of Management and Budget memo explaining why the Obama administration was entitled to spend $4 billion on subsidies for consumer health insurance. IRS officials were wary because they felt pressured to make outlays they considered illegal under the Affordable Care Act. As a New York Times article two years later noted, “They were told they could read it but could not take notes or make copies. The O.M.B. officials left the room to allow their visitors a moment to absorb the document, and then returned to answer a few questions and note that Attorney General Eric Holder had been briefed and signed off on the legal rationale.”

Congress refused to finance the program but “the Obama administration spent the money anyway and has now distributed about $7 billion to insurance companies to offset out-of-pocket costs for eligible consumers,” the Times noted. Federal judge Rosemary Collyer ruled in May 2016 that the payouts violated the Constitution because Congress had appropriated no funds for that purpose. But top Obama administration policymakers considered the peek-a-boo routine a sufficient hat tip to obeying federal law. It was important not to let due process and honest government stand in the way of creating bragging points for White House speeches.

The welfare state seeks to maximize happiness by maximizing submission, as if confinement were the key to contentment. Are modern citizens supposed to be made happy because government coerces and restricts them in so many ways — or despite that? Is the subordination of the individual to the State supposed to make the individual happy, or supposed to make the State happy? How can we distinguish between coercion to punish and subjugate people and coercion to make them happy? The sanction of coercion matters less to most citizens than how often and harshly they are threatened and punished.

English law professor A.V. Dicey observed a century ago, “‘Protection’ … is tacitly transformed into guidance.” The welfare state, in its daily operation, appears more devoted to controlling people than to benefiting them. Every extension of benefits is premised on an increase of controls — sometimes on the person to be benefited, sometimes on other people (taxpayers, businesses).

But there is no virtue in forcibly taking care of people who otherwise would have taken care of themselves. Many paternalist policies are the equivalent of the kidnapping of little old ladies by Boy Scouts and forcing them to cross streets so that the Scouts can fill their quota of good deeds. Many of the people who chose not to buy health insurance had sufficient income or savings to take care of the health emergencies they were likely to face at their age.

Paternalism presumes that individual people are “welfare receptacles” waiting to be filled to the correct level by their superiors. Welfare-state happiness must be a type of happiness that can be mass-produced by inefficient government bureaucracies — a “close enough for government work” happiness, a happiness that exists because government agency annual reports claim to have fulfilled their goals.

The more coercion government uses in the name of progress, the more oppressed people will feel. Government is often like a lifeguard who begins a rescue by standing on the shoulders of a person who is not drowning. The bigger the government, the heavier the political dead weight on the average citizen. In order to lift himself, the citizen must also lift “his fair share” of the entire government. The heavier the weight of government, the greater the odds against self-help. The expansion of government by itself, of itself, becomes an increasingly negative factor in the life of the individual person. Citizens are left to glean the remnants of their own lives from what the politicians have not already seized.

There is no way to fix the Affordable Care Act that would respect the rights, property, and freedom of American citizens. The federal government has thrown so many wrenches into health care since the 1965 creation of Medicare and Medicaid. Americans cannot afford any more Washington solutions designed largely to boost campaign contributions and reelection rates.

This article was originally published in the April 2017 edition of Future of Freedom.

Thanks to the Washington Times for the artwork (from an oped I did for them several years ago)


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