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Critics miss the point of Affordable Care Act

ALBUQUERQUE, N.M. — Wealthy opponents of the Affordable Care Act – Obamacare – in the form of the Club for Growth have launched some absurd television commercials featuring Uncle Sam replacing the kindly family doctor to examine the most private part of a patient’s anatomy. The message is that the government wants to take over your health care.

There are many Americans who would love to see a real government takeover by eliminating the private, for-profit insurance industry and replacing it with that radical, socialistic, alien form of health care finance known as … Medicare.

As it happens, Obamacare has very little to do with health and everything to do with finance. It is an attempt to rescue the nation’s for-profit health-care financing system from itself.

The United States has a lot of experience with rescuing elements of capitalism from capitalism’s strange propensity to self-destruct.

The Federal Reserve System was created so J.P. Morgan and his rich friends no longer had to bail out the nation’s banking system in times of financial panic, which is what they did in 1907.

The Federal Deposit Insurance Corp. came about when massive bank failures in the 1930s wiped out the wealth of millions of middle-class families.

More recently, President George W. Bush and Treasury Secretary Henry Paulson persuaded Congress to rescue the global financial system with an unprecedented bank bailout through the Troubled Asset Relief Program, or TARP, and the nationalization of much of our mortgage-financing institutions.

Unlike the financial panics of 1907, 1929 and 2008, the health care finance crisis occurred in slow motion. The nation embarked on its approach to paying for health care quite by accident.

The government imposed wage and price controls during World War II. With so many working-age men off to war, companies were desperate for labor. They couldn’t offer better wages to compete for workers, so they started offering benefits instead, among them health insurance.

Now, almost 70 years since the end of World War II, we have a system that leaves about 20 percent of our citizens without a way to pay for health care, consumes nearly 20 percent of our gross domestic product, is responsible for much of the government’s budget trouble, and produces medical results that are inferior to those of the nations with which we compete in the global economy.

It is a system that often fails to deliver the healthy, productive workforce that employers thought they were getting when they agreed to pay for health insurance. It is a system that creates incentives for medical providers to waste billions of dollars a year. It is a system that discourages the most economically efficient use of human capital because too many workers remain in jobs they don’t want rather than lose their health insurance.

That is a market failure by anyone’s definition.

This is the system that Obamacare is attempting to rescue from itself. Instead of scrapping a World War II-era financing scheme, the Affordable Care Act is attempting to protect it by providing the for-profit insurance industry with tens of millions of new customers. In return, the industry will never refuse to cover anyone who pays the bill.

Universal coverage works in the for-profit, private insurance world if and only if the risks and costs of health care are spread over a very large number of people. The young and healthy subsidize the old and ill. That is the essence of insurance.

The only way you can give the industry the bodies it needs if it is to be solvent in a universal-coverage world is by requiring everyone to jump into the actuarial pool. And because we are a nation with millions of people without the means to pay for insurance and thousands of employers who do not want to help pay the bill, the taxpayer is the only one left to tap.

The price President Barack Obama paid to rescue private, for-profit insurance from itself was the requirement that we all have coverage, a tax on companies that don’t offer insurance and whose employees require government help to buy their own, and an infusion of taxpayer dollars. That, plus the scorn of the Club for Growth, the tea party, the U.S. Chamber of Commerce, Physicians for a National Health Plan, anyone who wants Medicare for all, and others.

It is instructive to consider what Obamacare would have looked like if the central goal had not been to preserve private insurance. The leading alternatives are a single-payer system (like Medicare and Canada’s system) or a national health plan (like the American veterans’ health system or Britain’s system).

Imagine the commercials the Club for Growth would run then.

UpFront is a daily front-page news and opinion column. Comment directly to Winthrop Quigley at 823-3896 or Go to to submit a letter to the editor.



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