Ross Douthat

Conservatives attacking Obamacare rediscover their love for indenture

To keep their attacks consistent, conservatives have decided job lock is great -- for people who want to work less!


Brian Beutler
February 7, 2014 12:43AM (UTC)

Imagine someone who's been employed consistently for 25 years. He doesn't earn big wages, but he's frugal and would have enough money saved for a modest retirement but for the fact that insurance on the individual market will cost him $1,500 a month -- or simply won't be made available at all.

Now imagine someone else who's been employed consistently for 10 years and thinks it's time for a change. She wants to join a new start-up, which is offering her a decent salary bump, but won't provide health insurance, or the insurance they will provide will place her pediatrician out of network, and her child has a preexisting condition.

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Is one more deserving of government intervention than the other? I don't really think so, and neither does President Obama, whose Affordable Care Act provides the same remedy to both.

And until Tuesday, neither did conservatives. But thanks to a new CBO report that's easily spun into an Obamacare attack, conservatives now believe that only the second worker is worthy of assistance. Suddenly, job lock concerns them only inasmuch as it prevents people from switching jobs or careers, not when it prevents people from working less or leaving the workforce altogether.

For instance: [embedtweet id=431190631642587136]

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One could go too far in this direction. If Congress gave me $100,000 a year for nothing, I'd probably never hold down a job again. But we're not talking about that kind of money and we're not talking about cash compensation. We're talking about insurance. And this position amounts to supporting a form of indenture for all working-age people irrespective of their self-sufficiency outside of the medical system.

Moreover, a healthcare reform plan that only eased job lock for people who intended to continue working just as hard as they did before would be perverse in design. Subsidies and the coverage guarantee would become dependent on maintaining stable hours or productivity. Somehow I don't think anyone actually thinks that's a good idea.

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Avik Roy, who's better equipped to marshal a policy argument than Cooke, characterized the Affordable Care Act's income effect like so: "Bored with your job? No worries—now you can quit, thanks to the generosity of other taxpayers. Want to retire early? No worries—now you can, thanks to the generosity of other taxpayers." He adds that, "giving people the opportunity to switch jobs is quite a different goal from encouraging them to drop out of the work force altogether." But he ultimately acknowledged that the argument here must be over degree rather than kind.

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Writing at the New York Times, Ross Douthat made a similar point.

2 million is a much, much uglier number than the 800,000 figure the C.B.O. cited in its last report. Maybe the early estimate was right and this one is wrong, or (just as likely) maybe both are off in one direction or the other. But it does seem like we may be dealing here with something that isn’t just a consequence of rejiggering the employer-provided model, and that actually reflects a more universal dilemma of welfare-state liberalism: Namely, that when the government moves to help people at the bottom of the income distribution, its assistance often creates perverse incentives, both by making it easier for the beneficiaries not to work at all and (when the assistance is means-tested) by imposing a steep marginal tax rate on upward mobility of any kind.

Douthat hasn't explained where along the line from 800,000 to 2 million workers (or about 1 to 1.5 percent of the workforce) this phenomenon turns into a serious problem, but the good news is that once we've agreed upon the actual issue, identifying remedies is easy. If you don't like the steep marginal tax brackets Obamacare's sliding-scale benefit formula creates, we could smooth the formula or universalize the benefit. If you're conservative, you might propose reducing the income effect by making benefits less generous and stretching the age band, so that older individual market beneficiaries considering early retirement pay higher premiums than the ACA allows.

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But conservatives aren't particularly interested in discussing ACA modifications -- only in using the CBO report to attack the law. For instance, a new healthcare reform white paper authored by Sens. Tom Coburn, R-Okla., Orrin Hatch, R-Utah, and Richard Burr, R-N.C., proposes to both reduce benefits and stretch the age band relative to ACA, as described above. When they first unveiled it, Douthat praised it pretty effusively. Upon closer inspection, though, it turns out the Coburn, Hatch, Burr plan creates the same basic incentives for the job-locked as Obamacare does.

And if you can't simultaneously use CBO to attack Obamacare and support the new Senate GOP plan, then it's back to the drawing board.

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Brian Beutler

Brian Beutler is Salon's political writer. Email him at bbeutler@salon.com and follow him on Twitter at @brianbeutler.

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