The ACA, social insurance, and human solidarity

Most liberals and Democrats admit that the rollout of the Affordable Care Act has been a mess. How serious this is for the long-term success of the law is a matter of debate, but no one thinks this has been anything other than a rocky start. The most visible problem, of course, has been the all-but-non-functional website, which has prevented people (how many is uncertain) from signing up for insurance plans under the new federal exchange. But more recently the focus has shifted to the architecture of the law itself–specifically changes to the individual insurance market which have resulted in people having their existing policies cancelled and, in at least some cases, seeing the amount they will have to pay to get new policies go up.

There are good wonky liberal responses to this–Jonathan Chait provides a nice overview here. The short version is that two groups–those without any insurance at all and those who purchased individual insurance–were always going to be the ones most affected by the ACA. For the former, the effects were virtually all positive: they would either be able to afford insurance on the exchanges, possibly qualifying for subsidies to help, or they might fall under expanded Medicaid eligibility. In the case of the latter group, things are a bit more mixed. Many of these people would find that they could now afford policies that were cheaper and/or better than what they had before. But at least some of these people (no one seems to know for sure how many) would end up paying more for policies comparable to what they had before. This is the much-vaunted “sticker shock” we’ve been hearing about.

As Chait explains, the reason for this is relatively simple: the whole purpose of insurance is to put people into risk pools in order to spread risk (and hence cost) around. Thus in any risk pool, those people with lower risks (in this case, the young and healthy) are going to end up “subsidizing” those with higher risks (the old, the sick, etc.). So people who were able to get policies for less, because insurers could discriminate based on your health history, may now find themselves paying more because they are in a pool with people who previously would’ve had to pay more, or wouldn’t have been able to get insurance at all. The very same principle operates in the employer-based insurance model, which is how most Americans currently get their insurance. People whose age and health vary widely are grouped into a single risk pool, with the younger, healthier people effectively subsidizing the older and less healthy.

From a certain point of view this all sounds horribly unfair. But only if you take an ultra-individualistic, short-term view of fairness. As David Kaib nicely explained in a post yesterday, the concept of social insurance rests on a sense of social solidarity. We spread risk around because we want everyone, within limits, to be taken care of and have a shot at a decent life. All wealthy societies have implemented forms of social insurance, including the U.S., despite our individualistic rhetoric.

The notion of solidarity rests not only on concern for our fellow citizens, but also a more realistic understanding of our own self-interest. Social and political philosophers like Alasdair McIntyre, Martha Nussbaum, and Susan Moller Okin have pointed out that much of the Western political tradition assumes that the typical or normative human being is a healthy, independent, male individual, and this has distorted our concepts of justice. In reality, all of us find ourselves, at some point in our lives, dependent on others, whether as infants and children, or because we get sick, or because we get old and frail and lose our minds. We are “dependent rational animals,” in McIntyre’s suggestive phrase. Vulnerability and dependency are instrinsic to the human condition.

This means that even if you are a young, healthy person, you will, inevitably, be an old or sick person. And when that happens, younger, healthier people will be caring for you. Social insurance is simply a way of institutionalizing this, making it less ad hoc and subject to chance.

It should be obvious that these principles are congruent with Christian ethics, which enjoin care for the neighbor, respect for parents, and justice for the poor, the widow, and the orphan. Moreover, the doctrines of original sin and unmerited grace emphasize our common human lot and fact that none of us can save ourselves. Conservative Christians sometimes argue that social insurance is not a proper responsibility of government but that relief for poverty and sickness should come voluntarily from churches and other non-governmental entities. But there’s very little in the Christian ethical tradition per se to support such a restrictive role for government; this view owes more to libertarian conceptions of the “night-watchman state” than anything specifically Christian.

Unfortunately (from my perspective), the U.S. is still caught in the debate over whether the government has a proper role in ensuring economic security for all its citizens. This distinguishes us from most European social democracies, where the debate is more about the means by which the government should do this, the precise levels of expenditure, etc. During the last election, the Democrats emphasized solidarity and interdependence to some extent (e.g., the president’s (in)famous “you didn’t build that,” and in some of the speeches at the Democratic National Convention), but American political discourse still seems largely driven by notions of individual rights and deserts. We need a stronger culture of solidarity to underwrite a commitment to social insurance, and thus the possibility of human flourishing for all.

8 thoughts on “The ACA, social insurance, and human solidarity

  1. While I can see why one would want social insurance to be based on solidarity, I think looking at the programs shows the opposite: their purpose, and often the basis on which they get pass, is to reduce the need to depend on solidarity by forcing individuals to pay their own way to the extent that this is feasible. I think this is an entirely legitimate function, but I think it simply undoes any attempt to treat a culture of solidarity as underwriting social insurance. People support social insurance, at least in the modern world, because they seem it as reducing the degree to which they have to live up to the burdens of solidary action. We saw this quite clearly and explicitly with ACA itself, in which the primary rhetoric by its defenders was penal, not solidary.

    The problem is that insurance is not a solidary idea in the first place; it’s not based on the idea of everyone looking out for everyone else but on the idea of everyone looking out for themselves and theirs — in particular, by paying (in general) more money over a long period for future care that would (in general) cost less at the time, in order to reduce personal financial risk. Yes, you can do some kind of cost-sharing, but there’s nothing any more solidary about that than dividing rent and utilities among housemates according to strict house rules, which is not a way of having solidarity but a way of forcing people to pay their own way. And likewise one can make it more or less progressive in how the costs are shared, but it’s still a force-people-to-pay-their-own-way system, even if you are adding ‘to the extent that the rest of us deem that they can’ as a qualifier to it.

  2. Yeah, “punishing freeloaders” is not the best way to defend the ACA in my view–though maybe that betrays its conservative intellectual origins!

    I think I see your point about insurance being primarily a “look out for me and mine” endeavor. But if we qualify “pay your own way” with “to the extent you can”, aren’t we getting perilously close to “from each according to their ability; to each according to their needs”? Particularly when we know ahead of time that many people won’t be able to pay their own way, or will get far more out of the system than they put in?

    More specifically, to the extent that we’re going in the direction of one big, compulsory risk pool (and that’s what the ACA, for all it’s patchwork nature, seems to be heading toward), aren’t we saying, in effect, that “we’re all in this together”?

    1. I think ACA is pretty clearly not heading toward a big compulsory risk pool; it is a requirement for everyone to have a risk pool, which is not the same thing. You can do that sort of thing in a solidary way — it’s the way the Amish usually handle not having insurance, for instance — but it’s not actually insurance: it’s a common pot for health reasons: a welfare pot, in fact. Welfare can be solidary, but insurance is not welfare in this sense; it’s just paying for a redistribution of risk.

      What we’re actually doing with ACA is (1) forcing everyone to try to pay their own way, albeit with subsidy for people who in fact can’t; and (2) as you note in the post, requiring people who already pay their own way to shoulder a larger cost so insurance companies can maintain their profits in the face of much greater risk even given the subsidy. I think there’s an argument to be made for general insurance, but ‘we’re all in this together’ is surely not one of them. That would be an argument for a straight welfare approach — simply guarantee health care and establish a system of regulations and taxes to make it sustainable. But this is not what we’re doing — there’s no actual guarantee of health care, only a guarantee that people will pay for it through insurance companies. In this sense it’s not any different at all from forcing people to save for retirement, even allowing for means of redistribution. It’s not ‘we’re taking care of each other’, it’s ‘if you can take care of yourself, you’d better.’

      1. It’s not entirely clear to me whether we’re outright disagreeing or just emphasizing different things. So: my contention is that, to the extent that a modified insurance model incorporates redistributive elements, it’s best justified using a framework of “solidarity.” That is, I ought properly to take my neighbor’s good as part of my good, and be willing to sacrifice or forgo certain benefits to ensure that they have access to the goods needed to live a decent life.

        What I don’t think I clearly stated in the post, is that a “pure,” or textbook, insurance model doesn’t necessarily incorporate such redistributive elements. In theory, an insurer writes you a policy (based on a cold assessment of risk) only if it thinks it will make money. But both the employer-based model and the modified individual market under the ACA depart from this idealized case not only through the subsidies, but through the rules regarding preexisting conditions, lifetime limits. etc. But perhaps I muddied the waters in switching from talking about “insurance” to “social insurance.”

        Does that make sense, or am I totally off base here?

      2. I would deny that redistribution as such has much to do with solidarity. Why would it? Solidarity requires emphasis on common good over private good; this is simply not required for redistribution generally. Genuine solidarity requires a specific direction of working, from common good to its implementation, and a specifically cooperative form of implementation. There are lots of reasons for redistribution; I would say that most redistribution systems are not solidary, though. I suppose I think of solidarity as an end; a means is only solidary if it is actually designed in a way to establish the end, which redistribution systems are usually not.

        I would also, though, deny that ACA involves any real redistribution, outside of government subsidies, which could be done without the rest of it. The ‘redistribution’ in ACA consists entirely of setting things up so that insurance companies can guarantee profits while taking on riskier clients. If a late-in-life bachelor with no children is paying for maternity or pediatric coverage, this is either just free money or profit-increasing risk-spreading for the insurance company. If one thinks that ACA is redistribution, one should think that insurance companies are already through-and-through redistributive; this is just what they already do on a smaller scale and more carefully, without government enforcement. What we’re actually doing is guaranteeing larger profits for insurance companies in exchange for their guaranteeing that people in general won’t have to have as much of their health care on the public dime. There are potential advantages to this, but if this is redistribution (of anything except redistributing risk away from insurance companies), much less solidarity, I’m a skinned cat. It’s as if one took airlines to be the model of redistribution and solidarity, because airlines guarantee their own profits by having some passengers subsidize the rest. Somehow I doubt that Delta Airlines is the most solidary institution ever.

        Solidarity is a great reason for health care; it’s a great reason for welfare; that it is a great reason for complicated insurance schemes I doubt in the highest degree.

  3. (I should add that the framework established by the ACA would not necessarily be my ideal model, and that a straight welfare approach might well be preferable.)

  4. Okay, that’s interesting stuff. You clearly have a more detailed and fleshed out idea of solidarity than I was working with here. I was using it (perhaps too loosely) to mean the general notion that other people’s good or flourishing is a genuine part of my own self-interest, properly understood. So in that sense, increasing people’s access to health insurance (which I’m assuming, other things being equal, is welfare-enhancing) can be justified on grounds of solidarity.

    I’m also not convinced that the ACA doesn’t do more by way of redistribution than you’re giving it credit for. In addition to the subsidies, the Medicaid expansion alone is a pretty major part of the law (and would’ve been bigger if the Supreme Court and certain red state governors hadn’t intervened). Though I do agree that the de facto guarantee of profits to the insurance companies is problematic; that’s one reason why liberals wanted a public option (something I think they should keep agitating for as a fix to the law.)

    1. That would make sense; however, in this sense of solidarity it seems that practically any solution to a social problem will be solidary — a pure market solution would be just as solidary (since based on enlightened self-interest). I was taking you as appealing to it in a specific sense capable of distinguishing solutions, rather than just taking solidarity to indicate that some solution was needed in some way.

      It could be that I just don’t have a sufficient grasp of how it works, but I don’t see Medicaid as a redistribution program; it seems only to involve redistribution in the sense that virtually every government program involves some kind of redistributing of government funds to a particular use, and not to have a particular redistributive function.

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