• A libertarian case for Obamacare

    Mike Godwin has a post up at Reason.com making a libertarian case for Obama over Romney. I’m really interested in the parts concerning Obamacare. First, he acknowledges the “true” libertarian position:

    Yes, a truly libertarian system would allow everyone to opt out, including emergency rooms that could opt out of caring for an insurance-free deadbeat who crawls in after a car crash.

    I appreciate the honesty. Given that this is the kind of thing that almost always only holds up under the veil of ignorance, I appreciate his continued forthrightness:

    Given that health care in the U.S. doesn’t work that way – we require virtually all American emergency rooms to provide care regardless of ability to pay – a truly universal system is the best option for maximizing health-care efficiencies. And if we can preserve some aspects of competition among insurers (which Obamacare, mimicking the health-care plan proposed by the GOP to counter Bill Clinton’s efforts at health-care reform, attempts to do), that’s all to the good.

    I’ve made this point before, but it’s worth repeating. EMTALA may guarantee care, but it’s not free. People are still on the hook, and they do suffer financially and sometimes go bankrupt. This is especially true since people without insurance often pay higher prices. Moreover, there are a host of issues you can’t get care for in an emergency room. As for the rest, Austin made the externality argument before over at the JAMA Forum. Here’s more:

    But there’s an even stronger libertarian argument for Obamacare. Namely, it frees more Americans to take better jobs without worrying about losing the health care plan they had in their old jobs. Worker mobility is one of the things that reliably fuels free enterprise, and workers will be more mobile under Obamacare than they would be under Romney’s semi-dismantled version of it.

    Interestingly, these are all points that I make regularly. I’ve just never pitched them as “libertarian”.

    (h/t Bruce Bartlett)



    • Godwin is not the only libertarian realist to say this. Mike Munger says likewise:



      Sound arguments.

    • Well, I’m a nobody, but a classical liberal that supports conditionally the ObamaCare mandate given the framework laid out above: http://theunbrokenwindow.com/2011/01/31/in-which-my-credential-is-going-to-be-pulled/

      The full corpus of the ObamaCare law is a different story entirely from the mandate.

      Just one comment on your good post, I am not entirely sure that people behind the veil, when actually placed behind the veil, actually vote that way. I know Rawls says we vote that way, but isn’t there a body of research to the contrary?

    • These are not Libertarian arguments for Obamacare. I’ve read all of the posts cited in the comments and in Aaron’s post. Generally, what they say is that a single-payer system is better in terms of cost and convenience than the current system, an argument Aaron has made many, many times. I’m not going to dispute that. What I dispute is that this is a libertarian argument, it’s not. It’s an efficiency argument; it’s a cost argument. Additionally, even in those Munger posts, he says that though he thinks single payer would be better than what we have, Obamacare makes things worse, so he’s not supporting Obama because of it.

      The “increasing mobility” argument is also not a libertarian argument. By this logic, libertarians should be in favor of welfare, social security, all kinds of government programs because they “free people from worrying about losing their job, retiring, etc.” No libertarian I know would argue thus.

      That being said, the other arguments made by Godwin are good ones–immigration, abortion rights, and gay rights. All are libertarian issues in Obama’s favor.

      • It is definitely not a libertarian argument; it is a transparent attempt to wiggle out of the box of blind libertarianism.

        It is really just an “economies of scale” argument, to support the principle that basic health care should be a right. But in order to get to “scale”, large numbers of people – preferably 100% of them – have to agree. And that is anathema to libertarianism.

    • -It’s worth parsing the “worker mobility” argument for the ACA in more detail. There are indeed many hypothetical conditions under which a hypothetical, generic “worker” would enjoy more mobility under a hypothetical single payer regime.

      The problem is – the American labor market is not composed of perfectly identical workers who toil in identical jobs churning out identical bits of GDP. The actual labor market is a wildly heterogeneous and dynamic mix of workers with vastly different skill-sets and compensation levels, and the *actual* ACA will have different effects on different segments of the labor pool. Folks at the higher end who produce outputs worth many times the value of their insurance benefits will scarcely be affected at all. As you descend from that apex, the ACA will have a significant effect on the incentives that both the employer and the employed face – not all of which will enhance employment options and labor mobility.

      “The most important provisions of ObamaCare are scheduled to take effect in 2014. I have been researching ObamaCare and assisting with its implementation, and have come to this realization: Without further reforms, the law will create unnecessary costs for working-class Americans.

      Consider a low-income American supporting a family of four deciding whether to take a part-time job that pays $36,000 a year or a full-time job that pays $42,000 a year. According to my research, accepting the higher-paying job could result in the family losing over $10,000 a year in health-care subsidies.

      Moreover, by switching low-income employees to part-time positions, rather than offering them health insurance, an employer will be able to save over $3,000 a year by avoiding ObamaCare’s employer-mandate penalties. Without further reforms, many employers and employees will jointly benefit if employers make low-income employees part-timers rather than offering them health insurance. The losers will be taxpayers, who will need to fund the subsidies that these employees will be eligible for….


      -It’s also worth examining the data comparing US labor market mobility, pre-ACA, with the OECD average, and asking the extent to which tethering insurance to employers actually impeded mobility relative to other real societies. If the US was at or near the top pre-ACA, what’s the magnitude of the increase that we are talking about and how do the benefits associated with it compare with the costs?

      -If the goal is to divorce health insurance and employment, there are much simpler, targeted means of achieving this end.