Progressives: Stop laughing at Harvard

But it’s so much fun! After the New York Times provided conservatives with a schadenfreude feast about Harvard elites bemoaning their own ObamaCare petard, the scolds on the Left came out in force in an attempt to shame conservatives into giggles rather than guffaws. Jonathan Chait argued that the Right didn’t appear to realize they were laughing at their own solutions:


What makes this response funny, if not unusual, is that the reforms currently roiling the Harvard faculty are moderate versions of the reforms conservatives themselves not only have championed but continue to champion. …

But of course the conservative objection to Obamacare isn’t that its silver plan, covering 70 percent of health-care costs, is too skimpy. The objection is just the opposite. Conservatives hate, or claim to hate, Obamacare because its benefits are too generous. They propose instead to replace the law with far skimpier benefits, so that healthy individuals can enjoy the low premiums that come with bare-bones plans covering fewer claims and offering less protection. They don’t think the 70 percent of costs covered in the Obamacare exchanges is too low. They think it’s too high.

Well, yes and no … but mostly no. Conservatives wanted to restore pricing signals, it’s true — as did Harvard’s faculty, about which more later — but not coercively, and certainly not with a universal mandate to buy comprehensive health coverage. The conservative solutions to pricing signals were to incentivize the use of health-savings accounts, move the industry to hospitalization coverage, and encourage the growth of retail-care clinics for routine care on a competitive fee basis. That would have protected people against serious illness while alleviating costs for both insurers and providers. It also would have reduced prices by eliminating insurance overhead on most routine care and forcing providers to compete on price. That works in the Lasik and plastic-surgery markets, neither of which usually deals with insurance, and both of which have seen prices controlled through market forces without government interventions and mandates.


The mandate for comprehensive insurance made the pricing signal situation worse. It enforces pricing opacity across a wider range of consumers while increasing burdens for insurers and especially providers, many of whom are bailing out of these networks and moving to concierge service instead. ObamaCare’s mandate also serves as a perverse wealth transfer from the young, healthy, and generally poorer population to the older, wealthier, and more sickly population.

The problem with ObamaCare is that it both hikes deductibles and premiums and most of the other costs, without really doing much about pricing signals at all. Patrick Brennan slapped back at Chait and others on this score, too:

Obamacare hiked the cost of health insurance (leaving aside subsidies) by implementing higher taxes and huge new regulations. Those meant higher deductibles and higher premiums.

Conservatives therefore criticized both developments, even though sometimes they think other policies that produce higher deductibles are a good thing. Liberals sometimes like to argue that people really only care about ends and that all process requirements are disingenuous — I’m tempted to see what Chait’s doing as a particularly insane extension of that argument. …

Higher deductibles are definitely a bad thing when coupled with higher premiums and less choice brought on by a bad law, which is why the Harvard episode is not evidence that, as Chait claims, “Obamacare is implementing some versions of conservative ideas.” And yes, many conservatives may still not comprehend the political challenge of higher deductibles — but I don’t think that’s because, as Chait argues, we have “a conservative media apparatus that relentlessly turns all news stories into either non-stories or confirmation of their increasingly discredited hysteria.”

Any more, that is, than liberals have a media apparatus that didn’t prepare their partisans or Americans in general for the unpopular sides of Obamacare, and still can’t quite spin the situation to satisfaction.


The part of the story that produces and deserves laughter is the hypocrisy of Harvard’s faculty over the pricing-signal mechanism that actually did stay in ObamaCare, the Cadillac tax. As Robert Pear pointed out, a member of the faculty led an effort by a group of economists to praise the Cadillac tax, although Pear neglected to mention that four other Harvard professors were also signatories to the letter. In my column today for The Week, I look at the claim made in that letter, and the reversal of one signatory in the New York Times’ story as emblematic of that hypocrisy:

In a letter that the White House widely publicized, [Harvard provost Alan] Garber and his fellow economists extolled the excise tax on high-coverage plans for its pressure on consumers to seek less access to medical care. They also predicted that the savings realized by employers that opted for lower-coverage plans would produce wage increases for workers amounting to $300 billion in the first decade of its imposition.

“This provision offers the most promising approach to reducing private-sector health care costs,” they wrote in December 2009, “while also giving a much needed raise to the tens of millions of Americans who receive insurance through their employers.” The signatories included four other Harvard faculty members: Dr. Katherine Baicker, Dr. David Cutler, Dr. Joseph Newhouse, and Dr. Meredith Rosenthal. …

What of the signatories to the December 2009 letter? Only Cutler and Rosenthal made appearances in Pear’s report. Cutler defended the university as “very generous,” which the plan itself supports, but didn’t have much to say about the Cadillac tax itself. Rosenthal offered an oblique criticism of the Cadillac tax that she once endorsed. Calling it a blunt instrument, she told Pear that such pricing signals force consumers to “make choices that do not appear to be in their best interests in terms of their health.”

Left unexplained is Rosenthal’s public endorsement for precisely this method of cost control in December 2009. Oddly, Pear didn’t mention Rosenthal’s participation in that effort, although he did note Garber’s leadership on it. The letter emerged as Democrats pushed ObamaCare through Congress over the objections of Republicans and the electorate, who saw through the nonsensical arguments of Garber and his colleagues. It helped convince Democrats to go all in on ObamaCare, even though few of them had even bothered to read the bill before voting for its final passage, let alone consider its consequences.

Clearly, that was the case at Harvard as well. Suddenly, Harvard’s elite have grown disenchanted with the policy that they championed for everyone else now that their own ox is being gored. It provides quite an example of the hypocrisy often displayed by elitists, which is not usually demonstrated so publicly.


So … Harvard didn’t see their share of that $300 billion in wage increases? Maybe they should ask the first 2,000 people in the Boston phone book about their prediction and see what kind of an answer they get. They’d be lucky to hear laughter rather than cursing.

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