JD Kleinke, the 20-year health economics veteran and resident fellow at the American Enterprise Institute (AEI) who caused a stir with his Sept. 28 New York Times editorial, “The Conservative Case for Obamacare,” tells Inside Health Policy he stands by his view that the health law is built largely on Republican tenets and predicts the law won't be repealed as doing so would leave the insurance industry exposed. While Kleinke believes the final reform law is the most reasonable approach that could have emerged, he admits he dislikes a couple of its “ornaments,' chiefly the Medical Loss Ratio and Independent Payment Advisory Board provisions.
Democratic strategist Chris Jennings says he hopes the op-ed will open the door to eventual bipartisan acceptance and a more collaborative approach to the inevitable fixing of the legislation.
Kleinke tells IHP he has been “shocked” by the amount of animosity and venom of some people's reaction, but stands by the article which equates Obamacare to “Romneycare across state lines.” He characterizes the final reform law as an “elegant hybrid” of a number of public elements, exchanges and mandates that leaves intact what works in the market. It preserves the insurance market, the drug market and does not interfere with the physician-patient relationship, he says.
His op-ed piece sparked strong criticism from conservatives by stating that the “core drivers of the health care act are market principles formulated by conservative economists, designed to correct structural flaws in our health insurance system -- principles originally embraced by Republicans a a market alternative to the Clinton plan in the early 1990s.” He further argues that the law's controversial mandate is “an idea forged not by liberal social engineers at the Brookings Institution but by conservative economists at the Heritage Foundation.” The op-ed continues: “The only thing wrong with the mandate? Mr. Obama also thought it was a good idea.”
Asked about the prospects of an Affordable Care Act repeal, Kleinke tells IHP it would take “a tremendous planetary alignment” for that to happen. The biggest fear for the insurance industry was that the Supreme Court would strike down the individual mandate, keep the other market reforms, such as guarantee issue, and remove the spending caps which would cause the industry to spiral, he says. Kleinke says he can't imagine that Gov. Mitt Romney, if elected, would require the insurers to cover people without a mandate. In his op-ed, he wrote that the health insurance industry has been quietly supporting the law all along because it levels the playing field and expands the potential market by tens of millions of new customers.
Kleinke said that there was no politically motivated timing for the op-ed, which was published days before Wednesday' presidential debate during which health care will take up a 15-minute segment. He says he's been struggling with the issues for decades. He opposed the health care plan put forth by Clinton in the 90s - “too much top down central planning” - and was supportive of ideas presented by people in the Bush administration. When the Obama plan came along, he says, he spent hours and hours reading it and picking it apart, and while there are several things that he was not pleased with, he says he could not imagine how it could have come out any better.
On the strong GOP reaction to the op-ed, he says: “I have never seen the level of acrimony and polemic.It's completely over the top.”
Kleinke concedes that he “put it out there” and is therefore willing to take the hits, but was clearly jarred by the ferocity of the verbal assaults lobbed his way -- mostly by people that he's never met.
In addition to the reactions landing in Kleinke's in-box, several conservative blogs and think tanks -- including a colleague at AEI -- have blasted his argument.
Interestingly, Kleinke says that many of the reactions have come from people on the left, who say that his opinion piece corroborated their belief that the Affordable Care Act is a “give-away” to the insurance industry. If people on the left are as angry as those on the right about the ACA, it basically confirms that this is a “centrist, reasonable” plan, he says.
“I struggled. I wanted not to like it,” he says. However, he said that, at the end of the day, while he disapproved of a few of the “ornaments” on the bill, it was the most reasonable approach.
Kleinke also downplays the push-back from many of the right who say that they don't want the health exchanges to be managed by the government. “It's a trivial distinction,” he says . The are people on the far right who just don't like the concept of government being involved at all, they have an ideological knee-jerk reaction.
One of the provisions that he does not like is the Medical Loss Ratio (MLR) provision which he says 'restricts” industry profits and is populist and ridiculous. The rule is “crude” and does not take into account the nature of the industry in which profit rises and falls on a yearly basis, he says. “It is a dangerous, onerous, populist provision that is killing innovation in health insurance and scaring away capital investment,” he adds.
He is also opposed to the independent Payment Advisory Board (IPAB). And, he also believes that many of the public health provisions should have been addressed in separate legislation.
Jennings tells IHP he hopes Kleinke's piece will open the door to bipartisan efforts to tweak the law. He says he found Kleinke's argument “very impressive” and says that if president is reelected the piece could really become the long-term view that becomes more accepted. That would open the door to an honest conversation on about how to reform the reforms, he suggested. Historically, that has been the case, he said, noting that Medicare and even Part D were partisan bills that became more bipartisan over time. “That's what I hope for.”
Additionally, he says, the op-ed piece could open the door to other internal discussions about deficit reduction.
Jennings agrees with Kleinke's characterization of the bill as one grounded on GOP principles. If you told me that there had been a health care debate and the final outcome was a state-based exchange that relied upon private insurers, I would have thought it was a GOP policy -- or at least a very, very bipartisan agreement, he says.
In 2009, Jennings worked with Mark McClellan -- CMS administrator under Bush -- to help develop a health reform plan for the Bipartisan Policy Center -- which was backed by former Senate Majority Leaders Tom Daschle (D-SD), Bob Dole (R-KS) and Howard Baker (R-TN). The plan that emerged was very similar to the one that was enacted, Jennings says.